As an investor in private companies, aka venture capitalist or equivalent, I have one of those jobs that seems highly mysterious to many people. It is not the kind of job that you can easily explain to your grandparents or in one line to a stranger at a cocktail party (if said party occurs more than 75 miles from Silicon Valley).
I usually solve the problem by saying, “I invest in young companies and help them grow,” although most people who aren’t connected to the business in some way still find that fairly opaque. Often you get something like, “oh, like a stockbroker?” or “you’re a consultant?” or, “yeah, ok, whatever.”
For this, and other reasons, I just love it when venture capital collides with popular culture, as it helps give the world context and me explain what the heck I do all day (to the extent I am clear on that myself).
A month or so ago I was in Belgium and found myself at a communal table with a bunch of recent MBA graduates from the University of Brussels (Go Fighting Pomme Frites!) who asked me what I do for a living. Now, this was a particularly challenging conversation because their side took place in French and mine in English, but when I gave a simple answer (“Venture capital”) to the simple question (“What is your job?”) I got a collective very blank stare (“regard vide”).
Now I know slightly more French than Steve Martin admits to knowing in his best-ever skit about how “those French have a different word for everything!” but not enough French, or even English, to explain venture capital to most people. And the discussion, or pathetic display of French-ish on my part, was not going well until suddenly one of the guys got that light bulb overhead look and said, “Oh, you mean like Shark Tank!” Well, what he said actually sounded to me like “blah blah blah Shark Tank,” but I got the idea. “Yes,” I said, “just like Shark Tank, only with healthcare companies.” Suddenly we were on the same playing field. Hilarious. Pop culture to the rescue once again.
I love Shark Tank and watch it religiously. Total busman’s holiday. While it is obviously somewhat unrealistic that these very smart and successful people make a snap investment decision in a 5 minute pitch session, the basic issues, concepts, debates and decisions are pretty much exactly like what I and my colleagues in the field do, at least in the new investment side of our job and on a slightly longer timeframe.
If you go onto the Shark Tank TV show website and read the Q&As with the “sharks” (requins—see I know some French…Yoplait!), they are full of very smart, very thoughtful advice and commentary that resonates pretty well with my own general thoughts on how to evaluate an investment. They talk about the importance of leadership/the entrepreneur, of knowing your numbers, of being able to deliver a great pitch, of getting customers. They emphasize the importance of making a return on capital over financing vanity projects. They spend time considering how they personally can help the companies succeed.
I think that the “sharks” approach on the show is quite sound and it is no wonder these people are so successful in real life. I would say many of the same things they say to entrepreneurs and, in fact, I often do just that. I think Shark Tank actually represents our industry quite well, despite the fact that its 6 venture capitalists include 2 women and 1 black man. Clearly the show isn’t entirely non-fiction. But, after all, it is TV and you gotta collect an audience bigger than 40-year old white guys who are flipping through on their way to American Ninja Warrior.
And speaking of a wide TV audience, you may or may not know that The Simpsons is the longest running primetime scripted show in TV history (24 years) and thus a key influencer of pop culture. As I sat down last Sunday night to watch The Simpsons, which I don’t see much anymore but always love when I do, I was delighted to find that the episode was going to include two of my favorite subjects: venture capital and small batch bourbon. Wow, they have got my personal pop culture demographic down pat over there at Simpsons central.
The Simpsons episode du jour was called Whiskey Business, and the characterization of the two VCs who were featured in the show was both funny and a little too real. Matt Groening and crew really captured in a humorous way the stereotypically negative way some people view VCs. In other words, Ken and Glen, the two VC protagonists, were shallow and arrogant and downright hilarious, except for the fact that there are actually some people just like this in real life. As someone once said, truth is stranger than fiction.
Here’s how it goes down in the Simpson’s Whiskey Business. (for those of you who are deficient in Simpson’s facts and characters, go HERE and shame on you).
Marge takes bartender Moe for a fancy new suit to make him feel better about himself. He is wearing it when he is tending bar on the day Ken and Glen show up and get a taste of Moe’s home-brew bourbon. More importantly, Ken and Glen are impressed by Moe’s fashionable suit. And here is the dialogue that follows:
Ken/Glen: We’re venture capitalists. We turn dreams into money that mostly goes to us, but you get a little.
Moe: Tell me more!
Ken/Glen: How many bottles of this Kentucky Kool-Aid do you have?
Moe (oversimplifying like typical entrepreneur): Just the one, but I could whip up 200-300 thousand more!
Ken/Glen: You’ve got a great product and a fantastic suit. We’re going to give you everything you need; startup money, branding specialist, corporate jets, private drivers. If you’re feet touch the ground, we’ve failed!*
Mo: This is all so sudden. No it’s not, I’m in!
Ken/Glen: Only one more thing we need to do—check this out with our focus group.
A hilarious focus group scene ensues that includes a soccer mom, Latina granny, NASCAR dad, gay man with disposable income, return-to-the-nester post-college student, cop with a secret, single mom with 19 kids, and some lady who doesn’t like anything. They all love the bourbon and the VC’s smile at each other knowing they have a live deal. They take Moe to a super hipster rooftop bar and say, “We have a special surprise…do you like chicks with nose clips?” at which point a bunch of female synchronized swimmers form an image of Moe’s face in the pool.
And then Ken and Glen say, “It’s not decadent because you can ask interns to do anything.”
They immediately take the company public of course, telling Moe, “We love your whiskey, we love your back story and we love that suit that hangs off you like silk on a skeleton. Starting tomorrow we are going to sell shares in your company. All you have to do is show up at the stock exchange and ring the bell and you leave a rich man. See you tomorrow. Enjoy your last night as a Democrat.”
Of course what happens next is Moe’s suit gets ruined causing Ken and Glen to lose faith in his ability to run the company and the stock plummets. Ken/Glen dump him like a…bad suit. Moe goes back to bartending.
I have learned in my 15 year VC career that there are plenty of real live people who believe this is exactly how VC’s treat entrepreneurs: butter ‘em up, shake ‘em down, dump ‘em and run when it doesn’t go well. Sadly there is occasional truth to this, but I do think it is the exception, not the rule. While Whiskey Business was a hilarious Simpsons episode, it is a little worrisome to think that more people probably watch The Simpsons than Shark Tank and thus the “bad” pop culture image of VCs is more widely reinforced. But then again, as they say, any PR is good PR. Getting visibility on The Simpsons, can only make it easier to explain what I do when I am next surrounded by a table of inquisitive foreigners wondering why I am yelling out, “Barkeep, bring us another round of Yoplait!“
*best line ever, in my opinion—gotta start saying this to entrepreneurs!