Lessons from a not-so small time VC

3 years ago admin Comments Off on Lessons from a not-so small time VC

Australian angel investor Adrian Stone says the venture capital industry is like ‘gun slinging in the Wild West’, declaring that while one bets in 100 might be a winner that’s still a success.

“I learnt very early on that if you’re Billy the Kid, you might shoot 99 people, but that 100th person is going to be just that bit faster and luckier than you and is going to hit you with a bullet and you’re dead,” Mr Stone, the chairman of Investors’ Organsition, told Jordan Michaelides’s Uncommon podcast.

“It’s the same thing with chasing money for money’s sake. There’s no measure on it whatsoever because all you’re going to do is get jealous about the guy who has got more money than you, I promise you that.

“You look at the guy with a hundred thousand dollars, he looks at the guy with a million dollars, he looks at a guy with ten million dollars and it keeps going off until you’re Bill Gates. I promise you Bill Gates has no care about how much money is, at all.”

According to Mr Stone, who co-founded Melbourne’s AngelCube accelerator program and was the CEO of SurePlan for more than 20 years, for venture capitalists it’s “not about money it’s about what you do with your life.”

“Success for me is people who are living the life that they want to live and contributing in the way they want to contribute, and aren’t doing it as a slave to the system.”

The VC is a big advocate for ‘breaking your own rules for everything’, for example with AngelCube he’d decided he’d only invest in tech teams with multiple founders. Mr Stone founded AngelCube with Nathan Sampimon in 2011, and it invested in more than 20 start-ups before it was acquired by Slingshot in 2016.

“We have broken our own rules twice, single founders, no tech and they’re probably our two best start-ups but that’s not statistically valid for anything,” he said. “That doesn’t prove or disprove anything other than those two occasions that it happened, the universe happened to align but it does mean you have to be prepared to break your rules.

“The other thing I think is that there’s a logical reason why you need tech in your team. If I was going to open up a sausage factory, making premium sausages, I know I want the taste, wouldn’t it be nice to have somebody in my team that actually knows how to make a sausage and knows that even if I’m outsourcing it, that knows if the quality is good, knows if they’re being the right way, knows if it’s not going to blow up in my face and poison people when I sell it.

“Your business is technology and if your business is technology, then you have to have someone who knows about technology.”

As for what he looks for in a founder, Mr Stone said the number one thing is a personal connection. He regularly runs an ‘office hours’ session from Inspire9 in Richmond, offering free time with anyone who wants advice or just to chat. He encourages people to get in touch via his Twitter account, @smalltimevc.

“I want founders who are happy to talk to me and who I am happy to talk to and that we can have an open conversation like this and they can go ahead and do whatever they want after we talk because they know their business, I don’t know their business,” he said.

“They’re in it day-to-day and I’m not. I’m involved, they’re committed. The difference between involvement and commitment, it’s bacon and eggs on your plate in the morning, the chicken was involved, the pig was committed.

“So founders are pigs, I’m sorry, and I’m a chicken, I lay eggs and then I can walk away, so I give you some cash.”

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