Embracing Learning: From Venture Capitalist to Venture Builder
If you only have a minute:
- I transitioned from a Venture Capitalist (VC) role to a Venture Builder (VB) at Wright Partners, driven by my desire for hands-on operational experience and Wright’s unique venture-centric methodology.
- As a VB, I’ve faced real-world operational challenges, such as understanding the complexities of farming and negotiating pilot projects, contrasting the more analytical and hands-off role of a VC.
- I gained a deeper understanding of the importance of cash flows in startups, realizing the urgency and stress entrepreneurs face in managing finances and meeting commitments.
- The emotional toll of venture building is significant, with constant questions and doubts about venture success, customer satisfaction, competition, and investment decisions.
- Early hiring decisions in startups have a profound impact on the venture’s direction, emphasizing the importance of team dynamics and the ripple effect of early choices.
In my recent article, I outlined my journey from being a Venture Capitalist (VC) to embarking on a fresh role in Venture Building (VB) at Wright Partners. This change was motivated by the opportunity to get my hands operationally dirty and Wright’s unique venture-centric methodology, which includes having our upside as equity.
As we examined the promise held by VC-VB collaboration in Southeast Asia’s tech ecosystem, it dawned on me that my transition was more than a mere title change; it brought about a profound paradigm shift and many, many learnings. Today, I’m excited to shed light on the critical learnings I’ve accumulated as a Venture Builder (VB).
The last 14 months have included:
- Fun successes — early venture in a saturated area being built towards early leadership in its industry
- Some inevitable failures — realizing that supporting an existing founder in a certain case did not work, leading to the liquidation of the venture
- Lots of learning — all about the intricacies of farming from a farmer to having boardroom discussions with Fortune 500 companies about cold chain solutions
As I completed my first year and started leading multiple teams, I recognized even more changes from how I used to do things to now. While I’m not a prolific writer like our ComeBy founder, Arjun, (shoutout to his articles), I would like to share my thoughts with you.
Unraveling Operational Complexity
Venture building means confronting the real, on-ground operational challenges of building a startup. Take farming, for instance, which isn’t merely about sowing and reaping. It’s a complex dance of understanding soil intricacies, communicating with farmers, building a business model, and much more.
Looking beyond agritech (yes, we do more than agritech), our latest pilot, a B2B F&B platform, has moved commercially three times as we could not immediately nail down the two parties to pilot our new solution with — this means that someone from our team has to be both on the phone or in person, or in last week’s case, both, making sure things happen. Or it’s flying last minute to Manila to negotiate five different pilots with two different stakeholders within the span of 36 hours.
This varies pretty greatly from my experience as a VC where our focus was on analyzing an industry, identifying founders we thought could execute, aligning their vision with ours, and then giving them the capital and support (but mostly capital) they needed to get to where they wanted to go.
What becomes clear when you’re the operator is that decisions, tactical ones on a daily basis, have a lot more impact than you think. It makes me see being a founder (and I recognize that as a builder I am not fully one) is way, way, way harder than I thought. Managing all the different stakeholders — customers, team, suppliers, investors, in this order — is super tough, not forgetting about dealing with on-the-ground issues.
As a VC, my perspective was panoramic. Now, as a VB, I am knee-deep in the daily challenges that come with innovation, refining my problem-solving acumen and nurturing a more profound appreciation for operational dexterity.
The Real Essence of Cash Flows
At Wright, our margin is in the equity we get in the venture. As a result, we run tight cashflow operations — much like a startup. We also run pilots on each one of our builds out of our own pocket, mostly for speed of operations as it is difficult at times to approve additional money with our corporate partners in a timely manner.
As a VC, it was easy to remain oblivious to the pressing immediacy cash flow concerns can pose to an entrepreneur. It’s a different ball game when there’s a very real worry of, “I have employees to pay in two days” or “I need to order ice packs for my pilot which is launching in 3 weeks and it will take 2 weeks and 4 days to get here from China.”
Having these discussions makes me realize that if a founder says “I need the money in the bank for X, Y, or Z,” they’re not desperate because they want to be, they’re desperate because they have to be. They’re dealing with the stress of not being able to move forward on time or even worse, facing the risk of losing credibility with their customers and team.
Emotional Toll: The Silent Challenge
Here’s a sample list of questions that I ask myself at least three times a week, at any and all times of day:
- Will this venture work or not? Do customers really love what we’re building? Will the product even work?
- Are my suppliers in X going to follow through on their shipping commitment? What if they don’t? How should I hedge that risk? Should I find suppliers in Y instead?
- I only hired one recruit because I only had the money for one. Will they fit in? Can they do the work? How can I best set them up for success?
- Will the investors we’ve brought to the table really follow through? Should I follow up with my friend at the fund to see if her team is actually interested?
- There are a few competitors in the space who are approaching this problem from a different angle. What if they’re right and I’m wrong?
And many more…
In what I do now, I feel a deep sense of ownership and pride in the ventures I build — I’ve built as many ventures in the last 14 months as I invested in within a frothy 2-month span in 2021 — which is a testament to the depth of our approach. As a VC, I often spoke to my peers about empathizing with our founders — this experience has both made me realize how wrong I was but has also given me an opportunity to better appreciate that the entrepreneurial journey isn’t just a business challenge; it’s a deeply emotional one with oscillating highs and lows, from the exhilaration of a new client deal to the apprehension of a potential setback.
Customer Challenges: Beyond the Startup Glamour
The startup world isn’t just about innovative products, groundbreaking ideas, and sitting on panels telling the world how amazing you are. It’s also about addressing genuine customer issues — handling complaints, managing returns, and addressing service glitches can be operationally burdensome and emotionally taxing.
Taking that role initially during what we call the Design phase and then the Build phase (before the venture is ready to tackle its challenges on its own) is eye-opening. There are clearly so many more things that can go wrong than right. The key thing is to understand what pain point you are solving, and for who. This is often misexplained or misinterpreted as what friction are you solving for the customer but it is much more about what value you are providing to the customer and how much can be extracted for the venture. As mentioned earlier, the customer (not the VC) is the most important stakeholder, something I think many VCs sometimes forget.
The Ripple Effect of Early Hiring Choices (and really any other early choices)
The path a startup takes can be considerably swayed by its initial team members — I kind of knew this coming in but in the last 14 months I have hired and have had to let go of early employees in a venture, once within a week, and even had to make a call to let go of a venture where the founders were not the right ones.
As a VC I often interacted with founders and it was the best part of my job. However, I rarely interacted with other team members beyond that, particularly because I was managing a portfolio of 20+ companies while executing 3–4 deals at a time. I couldn’t properly appreciate the impact of how a hire could so significantly change things.
My journey from investor to builder has been challenging, fun, tiring, energizing, and fantastic. As I transitioned from the panoramic view of a Venture Capitalist to the trenches of Venture Building, I’ve come to appreciate grappling with operational complexities, understanding the essence of cash flows, navigating the emotional rollercoaster, and addressing genuine customer concerns. While the world of VC offered insights from a distance, being a Venture Builder has given me a front-row seat to the highs and lows of building a venture from the ground up.
We are pleased to be an appointed venture studio of EDB’s Corporate Venture Launchpad 2.0. CVL 2.0 is an expanded S$20m programme by EDB New Ventures, designed to enable companies to incubate and launch a new venture from Singapore, supported by venture studios experienced in corporate venture building. You can also find out more on our website.
Interested to learn more about investable ventures? Drop us a line: contact@wright.partners
Author:
Ajay Taunk, Venture Lead at Wright Partners
Enjoyed this article? Read Ajay’s previous article here: Embracing Change: From Venture Capitalist to Venture Builder
