This was evident when the pair of iconic investors shared the stage Thursday afternoon to share tips with a standing-room-only crowd at the 2013 ACA Summit. That’s right, Senkut, the mild mannered, go-his-own-way managing director of Felicis Ventures, and McClure, the often brash, globe-hopping pioneer of 500 Startups.
The exchange, while playful at times, testy at others, brought a thumping response for more.
That’s because it was full of substance. Like when Senkut urged investors to chart their own course in lieu of following the conventional wisdom. “One thing I try to do is think differently than my peers,” he said. Deals that spark disagreement are the ones with the greatest returns, and the best ideas are sometimes the ones that scare you the most, said Senkut.
McClure offered his own playbook. Make lots of little bets, he said, and be patient. When companies get traction, chase them and double or triple down, he advised.
So where was the agreement? It started with their assessment that initial due diligence is important, but overrated. More important is asking, “Do these people have a vision? Can they get things done?” noted Senkut.
What an investor learns by working with the company is in fact far more important, added McClure. “I’m a sh-t load smarter three years later than when I made the investment.” Not only will it be clear whether a company shipped its product on time, but investors will know whether the item generated revenue. Market insights will be far more astute.
Reserving capital will make you a smarter investor, added McClure.
Another point of agreement was the suggestion that investors need to be nice because good karma is the source of good deal flow. Take 49% instead of 51%, suggested McClure.
Finally came the observation that every investor, no matter how capable, misses deals. Senkut’s misses? Dropbox and Airbnb, where he had an opportunity to invest early. “I way overestimated the risk,” he says.
McClure’s misses include Uber and Fab, where he was asked by the founders to participate. He didn’t.
Photo of Aydin Senkut taken by Mark Boslet.