A Young VC on How Young Entrepreneurs Can Land Cash for Their Young Companies Early-stage venture capital investor Mo Koyfman of Spark Capital talks dollar bills and IPOs, among other weighty topics.
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At 35 years old, Mo Koyfman may be one of the younger money-men in New York City's vibrant tech scene, but he's hardly inexperienced.
The Wharton graduate is a general partner at Spark Capital, a Boston-based venture-capital firm that's invested in the likes of Twitter, Tumblr and Foursquare. Since being promoted last year to general partner, he has spearheaded early-stage investments in startups such as Skillshare, Work Market, Svpply and Warby Parker, among others. And before landing at Spark, Koyfman cut his teeth in tech at IAC and Connected Ventures, which operates CollegeHumor and Vimeo.
Koyfman sat down with YoungEntrepreneur to discuss what it's like being a young VC, and how young founders might go about finding VC:
Q: From hiring you, it looks like Spark is attempting to make a bigger play in the Big Apple. Why NYC and why now?
A: We've been big in NYC for more than five years and this is just further confirmation of it. We're looking to NY for great entrepreneurs building game-changing companies -- the same thing we look for everywhere else. Industry-wise, we see a lot more ecommerce, advertising services, financial services and marketplace opportunities in NYC vs. other markets.
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Q: What's been the biggest challenge as a young VC?
A: Getting access to the best companies and deals.
Q: How are VCs and startups reconsidering their exit strategies, as the public markets cool to new showings?
A: Exits are either IPOs or M&A. That never changes in any market. The good companies hopefully will have one or both of those opportunities. If not, they should be self-sufficient enough to keep growing and performing without worry about when that exit will come.
Q: How should startups go about picking the right investor?
A: You go about picking the right investor the same way you go about recruiting. You meet with people, you spend meaningful time with them, and you do reference checks on them with other people that have worked with them.
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It's fundamentally important to do due diligence on investors the same way they check on you, and I think that's how you can prevent making mistakes. Ultimately, personalities don't always match and things don't work and you can't predict how things are going to go. That's why you have to meet with people. It consistently shocks me how many people don't do that.
Q: What are the most important aspects of creating a great company and why?
A: It's people and execution. There are a lot of great ideas out there and you certainly have to start with one, then you pivot it into another. You have to be passionate about something, care about something and put the right people around it, so you can execute. That's what makes or breaks or creates great one.
Q: Other than ideas, how important is communication or presentation in selling an idea to a VC firm?
A: Communication for entrepreneurs is fundamentally important, but not just for raising capital. If you can't communicate, then how can you articulate your purpose or give people a reason to care? How are you going to recruit and hire the best talent? That's how you create a culture and that's how you inspire people.
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Q: For those startup founders or young entrepreneurs that might not be successful, what can they take away from failing?
A: Everything. You learn your greatest life lessons from failure. Don't let it get you down; don't let it stop you. Just let it make you smarter. Trying and failing at a startup is a university education. You are so much better for it the next time around.
-This interview was edited for clarity and brevity.
