I’m a Venture Optimist

Yet again an article in the New York Times bemoaning the demise of venture capital – this one is titled Maybe We Should Call Them Venture Pessimists.Optimism is in short supply”, “the quarterly Silicon Valley Venture Capital Confidence Index has reached its fifth consecutive quarterly low”, “there is understandable concern over the pressures on the VC business model”, and “the venture community should expect substantial structural changes to occur” are some of the snippets.

Whatever.  I’m not going to put any energy into debating the structural dynamics of the VC industry.  I’ll leave that to other people as that’s not my thing. 

Several years ago I decided to spend the rest of my professional life (I’m 43 – so let’s say 20 years) dedicated to advancing innovation in the domain of software / Internet.  I do that by being a VC – investing early in new technologies and markets that have long and broad arcs and creating market leading companies that transform the way we use this stuff.  My “job” – in its most crass form – is simple – take a box of money and turn it into a much bigger box of money.  The essence of my job is much more complex, extraordinarily challenging, and extremely satisfying.

The basic fuel for all of this is entrepreneurs.  Period.  VCs are an small piece of the overall ecosystem.  A highly visible piece, but just a piece.

So the contrarian in me is delighted by the spreading pessimism.  Fewer VCs?  Fine – that just means that the people that stay with the business believe in it, are good at it (since if they aren’t they won’t be able to raise the capital they need to participate), and all the people that become VCs to simply “manage assets and make money” will disappear over time.  Or evolve into something else that maybe someday isn’t called a VC anymore.

I think the next 20 years of innovation around software and the Internet will make the last 20 years look like child’s play.  And while the vector of negativity and pessimism continues to follow a steep upward slope, it’ll eventually crest.  In the mean time I don’t see an endpoint to the human animal’s desire to innovate.

I wake up each day delighted to be alive.  Delighted to be involved in creating new things.  Thankful that I’m an American and – in Warren Buffett’s words – drew a great ticket in the ovarian lottery.  And I’m optimistic.  Very optimistic.