The two most powerful things you can have in the startup world are a checkbook, or a byline.
I’ve been saying that for the better part of three years, as I got up close and personal with the latter as a member of the team at PandoDaily. Now that I’m preparing to trade one weapon of choice for the other, I’ve been thinking a lot about the skillsets required to be successful in each role, where there is overlap and where there are gaps.
Since I announced my plans to join Upfront Ventures nearly a month ago, I’ve had countless discussions on this very topic, which have helped to develop my own thinking on the matter and only furthered my belief that – self-serving as it may be – in the right circumstances, journalism is a highly-effective precursor to a successful investing career. It’s hard to argue with the evidence.
It’s a discussion that could begin, and end, with Mike Moritz. Arguably one of the most successful VCs in history, at the helm of one of Silicon Valley’s seminal firms, Moritz and his team at Sequoia have backed Oracle, Cisco, Yahoo, Google, LinkedIn, and YouTube, among other mega-winners. But before arriving at Sequoia, Moritz wasn’t in finance or even a founder. He was a journalist with Time Magazine, and the author of several books, including ones on Apple and Chrysler. Moritz’s operating experience at that point was limited to his brief time as the head of a small publisher that he founded upon leaving Time. But his relentless curiosity, his innate ability to dissect and evaluate new industries, and his self-described competitiveness and fear of failure combined to foster one of the best careers venture capital has ever seen.
It’s not just Moritz, however, who offers an archetype for what a successful journalist turned investor looks like. Former Inc reporter Stuart Alsop was a successful partner at NEA before heading off to launch his own firm, Alsop Louie Partners. Between the two roles, Alsop has invested in Tivo, Glu Mobile, Twitch (Justin.tv), and Gowalla, among other companies. And perhaps the most underrecognized journalist turned star investor is a former CNet Editor-at-Large and creator of the widely-read Release 1.0 newsletter, Esther Dyson. As a full-time angel investor, Dyson has backed, XCOR Aerospace, Factual, Square, GoodData, Fancy, HealthTap, and Visible Path, among other companies.
More recently, prominent technology bloggers Michael Arrington, MG Siegler, and Om Malik have left the business of journalism to become full-time investors – with Arrington’s launch of Crunchfund* almost killing Techcrunch and serving, in part, as the impetus for PandoDaily’s creation, and Malik’s departure from GigaOm the subject of great debate after that publication’s unexpected recent demise. It’s still too early in the investment horizons of these three ex-pro bloggers to fairly grade their performance, but their portfolios include stakes (acquired at at early and late stages) in standouts like Uber, AirBnB, Mailbox, Tilt, Rover, Silvercar, Codeacademy, Zaarly, and OpenDoor, among others.
Outside of the world of venture capital, a number of former journalists at venerable old media institutions like WSJ, NYT, and Fortune have transitioned with great success to the worlds of investment banking and hedge funds. This list includes the likes of Steven Rattner (NYT/Lazzard), Andy Kilpatrick (Buffett biographer/Wells Fargo Advisors), John Sevior (Sydney Morning Herald/Airlie Funds), Neil Barsky (WSJ/Alson Capital), and hedge fund pioneer Alfred Winslow Jones (Fortune/A.W. Jones & Co). Similarly, Millenium Technology Ventures co-founder Dan Burstein, who has invested in Facebook, Twitter, Alibaba, Tumblr, Zappos, Chegg, and others, may not be a journalist but he’s a New York Times bestselling author of 14 books on technology trends, global economic issues, and popular culture. Even Wall Street analysts, whose day-to-day is not too dissimilar from that of journalists, have found great success as venture investors – see Gurley and Green.
But it hasn’t always worked out. Former Mashable editor Ben Parr’s hubristically named #DominateFund barely got off the ground, failing to attract enough capital to make a real go as a seed stage investor. Barsky famously published an op-ed in the WSJ in 2005 under the headline, “What Housing Bubble?” After nearly a decade in existence, his $ 3.5 billion hedge fund shut its doors in 2009. And even Crunchfund, for all the high profile logos within its portfolio, has been late to get into many of its best deals or, when it has bet right, has written small checks resulting in modest returns.
Before going much further, it’s probably necessary to stop here and make a distinction between journalists – that is, those doing real reporting and writing investigative and often adversarial content – and bloggers – who too often act more like external PR and cheerleaders for unproven companies. (It’s a line that is blurring over time, but like the supreme court said about porn, “you know it when you see it.”) When these transitions fail, it’s often individuals from the latter camp who struggle to say no, an unpleasant but unavoidable necessity in venture investing. By the same token, those who are publishing glorified press releases rather than truly investigative or analytical pieces, may lack the breadth of network and relationship-building experience necessary to source and win deals once in the role of investor. Put simply, there’s a difference between Moritz writing one of the definitive early works on Apple, and someone sitting at home in sweats firing off a few hundred words on the latest photo-filter app.
Also, there’s a distinction to be made between journalists (or bloggers) joining the investment teams at VC firms, and those taking content, marketing, and operations roles within these firms. For example, Techcrunch’s Leena Rao spent just over a year at Google Ventures as an operating partner, focused on content and marketing. She recently left that role to return to journalism at Fortune. Rao’s not alone. Former Wired editor Michael Copeland joined Andreessen Horowitz in 2013 to “lead the firm’s content strategy,” while former Journal reporter Camille Ricketts is First Round Capital’s* Head of Content and Marketing. Even the historically shy Sequoia got in on the trend, hiring former WSJ scribe Ben Worthen as Head of Content. This is certainly another trend emerging at the intersection of venture capital and journalism (or at least content), but is very different from what we’re discussing here.
But back to Moritz, et al. These above examples, if nothing else, establish that it’s possible to go from being a successful journalist to finding similar success as an investor. The deeper question is what do those who succeed in this transition share in common and what, if anything, is it about the two roles that makes such a seemingly non-sequential transition possible?
I think there’s a lot to be said for the common skillsets required to succeed in both industries. Venture capital is, if nothing else, a task of pattern matching, and quickly and decisively evaluating new businesses, founding teams, and market opportunities. For every 1,000 or so pitches a VC firm receives, it will make between one and ten investments, on average. You know who sees a similar number of pitches and evaluates an equally disparate set of businesses? Journalists, particularly those focused on early-stage technology.
That doesn’t mean that every app reviewer and keyboard warrior should be given a seven figure fund with which to spray investments around the Internet. But it does mean that those who have the right complementary skill-sets like analytical reasoning and strong judge of character, may be better equipped to identify winning startups than say a former investment banker or big-four consultant with little experience in the early stage. This can even be a weakness of even hallowed founders-turned-investors who, for all their individual success, have often only ever experienced a small handful of businesses and can be prone to over-extrapolation.
Beyond a propensity for high volume filtering and pattern matching, the best journalists excel at building relationships – in their case with sources – a skill that can end up being crucial to fundraising, sourcing deals, recruiting, facilitating partnership and exits, and all manner of other roles truly value-added VCs need to perform. Another trend that has distinguished many of the most successful VCs in the modern era, is the ability to create content and build a brand through transparency and thought leadership – think Wilson, Feld, Suster, Dixon, and Horowitz. Journalists, if nothing else, often bring with them to their new roles an existing audience and are comfortable being public figures and regularly creating content. Lastly, and not to be overlooked, is the fact that great journalists have a highly developed bullshit detector. Sure, many of the best VCs may be described as optimists, but they also are ruthless in dismissing bad ideas or weak teams.
Though rare but not unheard of, the subject of journalists transitioning into venture capital is one that, for whatever reason, generates a disproportionate level controversy whenever its raised. Particularly inside the hallowed halls of (capital J) Journalism, piercing the veil that separates media from business to become either an operator or an investor in the industry you once covered is often met with great cynicism. Ben Rooney writes in the WSJ, for example: “When journalists give up their penny-a-line trade and think they are financiers and business executives, you are in a bubble.”
Sure, a mass exodus from any one industry to another may be a sign of the type of bandwagonning that follows a period great success and often signals the peak of a cycle. But – again, forgive the self-serving perspective – history dictates that at least in a few select cases, it’s a natural evolution of a career and can be the beginning of continued success.
There’s no silver bullet or can’t miss prototype for becoming a great venture investor. Otherwise successful individuals from all backgrounds – including journalism – have struggled to find similar success within venture.
Personally, I’m going into this next chapter with eyes wide open, eager to learn, eager to test many of the above filters and theses developed during my time at Pando, and with as few preconceived notions as possible about what will come next. It’s been three years, nearly 1,600 blog posts, and roughly 1.43 million published words since I began this journey. If nothing else, it has been an eye opening and transformative experience, and one that leaves me feeling better equipped than ever before to tackle the task of venture investing.
Don’t worry, I will continue to write, both on Upfront.com and as a guest poster here on Pando, albeit with less frequency and through the slightly different lens of a venture investor. If I could hope for just one thing, it would be that the next chapter, different as it’s sure to be, be even remotely as rewarding and fulfilling as the last.
And with that, and with admittedly misty eyes, I bid you Pando readers farewell. Thank you for reading, for commenting, and for sharing my work. It has been an honor. I hope we can continue the conversation on Twitter @mcarney.
[*Disclosure: Crunchfund and First Round Capital are investors in Pando, as are Andreessen Horowitz partners Marc Andreessen, Jeff Jordan, and Chris Dixon.]
[Disclosure: Michael Carney has accepted a position as an associate at Upfront Ventures that begins in April. This post went through Pando’s usual editorial process.]