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I've sometimes wondered if transitioning from CTO to VC makes sense/is possible, has anyone tried that?

tiborsaas 7y ago
You can transition to VC any time if you have cash to burn or have connections that help you convince others to burn their money :) In the first case you are rather an angel investor.
xky 7y ago
I have not tried it but I have seen it done. Some VCs like to have in-house technical expertise to better assess candidate companies. I'm not sure if it would be a clean transition but there definitely seems to be a pathway for it.
superhuzza 7y ago
Paul Graham essentially went this route, no?
- harveyesq 7y ago
  I don't think Paul was ever much of a fan of VCs, particularly early on. See http://www.paulgraham.com/venturecapital.html http://www.paulgraham.com/venturecapital.html
- sjg007 7y ago
  YC, effectively, owns the whole stack (i.e. vertical). Their main selling point is the YC network and being founder friendly to derisk creating startups. YC also created the continuity fund that is where the typical VC comparison would be. I am not sure what the terms on it are but I imagine it is geared only to their companies. This means YC is willing to assume more risk and gives a vote of confidence for their products. It's amazing really to see this grow as big as it has in 15 years give or take.
zkid18 7y ago
I enjoy reading Adrian Colyer‘s blog https://blog.acolyer.org/ https://blog.acolyer.org/ He is a Venture Partner with Accel in London. Prior to this position he spent 20+ years of the career in technical roles. I think VCs can only benefit from professional diversity. AFAIK, some of the funds even for associate positions they are looking for CS people
harveyesq 7y ago
The TL;DR here is that it's possible to transition into a VC role as a former CTO but it's not a common pathway. Many VCs have followed a standard pathway from Harvard/Stanford/Whartonn MBA into a fund (because it checks the boxes of LP due diligence) , but if you are looking to shortcut that process, then you have to consider how other VCs got their start. The great debate in VC is whether Operator VCs (those who have founded or operated a business) are better suited to VC than Investor VCs (those who haven't founded or operated a business, like most Wall Street types)? The data indicates there is no clearcut answer. You can read the CB Insights analysis here: https://www.cbinsights.com/research/founders-best-venture-capitalist-investors/ https://www.cbinsights.com/research/founders-best-venture-ca... Also, Fred Wilson (@AVC) wrote an article that indicated investor VCs make the best kind of VC more often (which of course can be analyzed otherwise): https://avc.com/2017/05/investor-vcs-and-operator-vcs/ https://avc.com/2017/05/investor-vcs-and-operator-vcs/ The important things to note are that 1) VC is not monolithic and 2) VC is multi disciplinary. The best VC fund managers need to be great at raising capital, have excellent deal flow/selection, know how to communicate, negotiate and close deals, be valuable board members, manage a fund portfolio and exit portfolio companies to return capital to the fund's LPs. Finally, here are the top three reasons why Fred Wilson thinks many of the best VCs, at least of his generation, were not entrepreneurs and operators before becoming VCs: 1. Manage People. Avoiding the temptation to operate and instead managing well from a distance. 2. Strategic Mindset. Understanding where value is going to be in an emerging market, how to get to the best strategically positioned companies first, and how to guide those companies toward a strategy that wins the market. 3. Being a portfolio team player by wearing many hats and ultimately doing whatever it takes to help solve the startup founder's biggest problems. Also see, “Investor vs. Operator VC” by Rory Stirling https://link.medium.com/nIPkvG31z1 https://link.medium.com/nIPkvG31z1
- Roritharr 7y ago
  Thank you very much, very helpful!
paulddraper 7y ago
There are plenty of examples. The other day I talked to one of the PagerDuty founders, who is a VC now. IMO it's a hard transition to make. VCs need networking and salesmanship more than they need technology insights. It's possible in the same way that engineer -> product manager happens. You'll benefit from your understanding, but the biggest job requirements are ones you didn't have before.

You can transition to VC any time if you have cash to burn or have connections that help you convince others to burn their money :) In the first case you are rather an angel investor.

xky 7y ago

I have not tried it but I have seen it done. Some VCs like to have in-house technical expertise to better assess candidate companies. I'm not sure if it would be a clean transition but there definitely seems to be a pathway for it.

superhuzza 7y ago

Paul Graham essentially went this route, no?

harveyesq 7y ago
I don't think Paul was ever much of a fan of VCs, particularly early on. See http://www.paulgraham.com/venturecapital.html http://www.paulgraham.com/venturecapital.html
sjg007 7y ago
YC, effectively, owns the whole stack (i.e. vertical). Their main selling point is the YC network and being founder friendly to derisk creating startups. YC also created the continuity fund that is where the typical VC comparison would be. I am not sure what the terms on it are but I imagine it is geared only to their companies. This means YC is willing to assume more risk and gives a vote of confidence for their products. It's amazing really to see this grow as big as it has in 15 years give or take.

zkid18 7y ago

I enjoy reading Adrian Colyer‘s blog https://blog.acolyer.org/ https://blog.acolyer.org/ He is a Venture Partner with Accel in London. Prior to this position he spent 20+ years of the career in technical roles. I think VCs can only benefit from professional diversity. AFAIK, some of the funds even for associate positions they are looking for CS people

harveyesq 7y ago

The TL;DR here is that it's possible to transition into a VC role as a former CTO but it's not a common pathway. Many VCs have followed a standard pathway from Harvard/Stanford/Whartonn MBA into a fund (because it checks the boxes of LP due diligence) , but if you are looking to shortcut that process, then you have to consider how other VCs got their start. The great debate in VC is whether Operator VCs (those who have founded or operated a business) are better suited to VC than Investor VCs (those who haven't founded or operated a business, like most Wall Street types)? The data indicates there is no clearcut answer. You can read the CB Insights analysis here: https://www.cbinsights.com/research/founders-best-venture-capitalist-investors/ https://www.cbinsights.com/research/founders-best-venture-ca... Also, Fred Wilson (@AVC) wrote an article that indicated investor VCs make the best kind of VC more often (which of course can be analyzed otherwise): https://avc.com/2017/05/investor-vcs-and-operator-vcs/ https://avc.com/2017/05/investor-vcs-and-operator-vcs/ The important things to note are that 1) VC is not monolithic and 2) VC is multi disciplinary. The best VC fund managers need to be great at raising capital, have excellent deal flow/selection, know how to communicate, negotiate and close deals, be valuable board members, manage a fund portfolio and exit portfolio companies to return capital to the fund's LPs. Finally, here are the top three reasons why Fred Wilson thinks many of the best VCs, at least of his generation, were not entrepreneurs and operators before becoming VCs: 1. Manage People. Avoiding the temptation to operate and instead managing well from a distance. 2. Strategic Mindset. Understanding where value is going to be in an emerging market, how to get to the best strategically positioned companies first, and how to guide those companies toward a strategy that wins the market. 3. Being a portfolio team player by wearing many hats and ultimately doing whatever it takes to help solve the startup founder's biggest problems. Also see, “Investor vs. Operator VC” by Rory Stirling https://link.medium.com/nIPkvG31z1 https://link.medium.com/nIPkvG31z1

Roritharr 7y ago
Thank you very much, very helpful!

paulddraper 7y ago

There are plenty of examples. The other day I talked to one of the PagerDuty founders, who is a VC now. IMO it's a hard transition to make. VCs need networking and salesmanship more than they need technology insights. It's possible in the same way that engineer -> product manager happens. You'll benefit from your understanding, but the biggest job requirements are ones you didn't have before.