It’s a great pleasure for me to be here this morning and a special honor to begin my new role as Chair of the Board of Directors of this amazing organization with all of you here today.
By all measures, the past 12 months have been productive and successful for the NVCA, culminating in the passage of the JOBS Act, which will have a huge impact on our mission of fostering innovation and entrepreneur. It’s quite possible this might be the ’34 Act of the 21st Century. Time will tell.
There are a lot of people who worked hard on the JOBS Act over the past 12 months. But there is one person I especially want to thank for his leadership, and that is Paul Maeder the outgoing Chair. Paul’s leadership of the NVCA stands out – as he does –for its unique blend of powerful ideas touched with a great sense of humor. We will certainly miss Paul in the coming year, but hope he remembers us when he finds his next big deal!
I’d also like to acknowledge our outgoing directors, who were instrumental in our recent successes. And of course Mark Heesen and the rest of the staff at the NVCA deserve a huge shout out for their strategy, commitment, tenaciousness and good old hard work that makes the job of being an NVCA director look easy.
Thank you one and all.
I’ve been part of the venture capital industry for the last 24 years. During that time, the industry has grown and changed so much. We’ve had our ups and downs, but through everything I can honestly say that there has never been a day in the last 24 years that I wasn’t proud to be doing this work. Reconnecting with many of you is wonderful.
That’s because at the end of the day, our mission as venture capitalists is to discover the very best entrepreneurs with the very best ideas, and help them build and grow companies. The capital and sponsorship we provide help eliminate barriers and reduce friction that might otherwise impede their growth. And when they are successful, our limited partners and we share in their success.
Even more important, the American people benefit from the success of innovation and entrepreneurs – through great new life changing products and services, through outsized contributions to the American economy and its global competitiveness, and through jobs. This is the American story.
History has shown us that when bright entrepreneurs are given a chance and the capital, they can create great companies and in many cases great industries. Semiconductors, personal computing, local area networking, wide area networking, bio pharmaceuticals, medical devices, overnight delivery, ecommerce, social networking – the list of industries that came into being because of the partnership between entrepreneurs and venture capitalists goes on and on.
Now, most of the people in this room are painfully aware that the venture industry is coming out of a relatively bleak decade, perhaps an understatement. I’m sure we’re all happy to put it behind us. And while our economy is improving after the Great Recession of 2008, its global aftermath persists, creating a lingering uncertainty.
Through this entire gloomy decade, I’ve been continually amazed at how entrepreneurs just don’t seem to read the newspaper, watch TV or the news. And if they do, that just doesn’t seem to stop them. They keep on looking for opportunities to bring great ideas to life. Their ideas, their belief in a better future and their unflagging optimism is inspiring.
This year, we are seeing a renewal of the IPO and the public market in general. Frank Quattrone’s remarks yesterday show this to be the case. The renewal is stoked in part by companies reaching the scale to go public, but also by the buy side seeing these young companies up close, and having enough confidence in them to buy their stock and watch them grow.
The public market is so very important to venture. I don’t think we fully grokked its impact until it went away a decade ago. Besides liquidity for our startup dollars, you may already know that 92% of all job creation from successful venture backed companies comes after the IPO. Further – and I’ve said this many times – the public markets keep the M&A process honest and active. When growing companies have choices, everyone wins.
So in this next year – as the JOBS Act takes hold, as the public markets pay more attention to our startups, as our limited partners start to get a return on their invested capital – we all need to keep in mind that the company creation process is an essential element of the growth and prosperity of our economy and our way of life. This industry matters for the nation, and for the world. We must keep it strong.
This process is uniquely American. The industry is changing, yes. We’ll talk about some of that today in our sessions. But these changes are good. And just as entrepreneurs invent new products and industries, as venture capitalists we must reinvent ourselves to better partner with them.
Let me wrap up with one short story.
When I started at Venrock in 1988, we were backed 100% by the Rockefellers. Every year, like all good venture capitalists, we would give our annual report to our investors. In the room were David Rockefeller, Laurance Rockefeller, their aides, and many other family members. And every year we would go through our successes and our failures, giving a completely transparent report. Mr. Crisp, our CEO, held nothing back.
Our founder, Laurance Rockefeller, would sit patiently in the front row taking notes. There would be questions sprinkled all through out the presentation, mostly details about this or that company. But every year he would ask the same questions at the end of the report:
How many people does the portfolio employ?
How much wealth for the companies and their shareholders was realized?
What incremental tax basis did we create?
What impact to the American economic landscape did we have?
That’s because for Mr. Rockefeller, venture capital was not just about the return on investment. It was also about the impact that entrepreneurs and their companies could have on people’s lives and on their well-being. It was in his DNA as investor and visionary. It’s what drove him to found Venrock and start what today is a 74 year tradition.
It may sound a little corny, but it was real. And for me, at that most impressionable time in my professional life, his view of why we are venture capitalists still resonates today.
In a few moments, we’ll hear from another superangel and statesman of our industry who also carries the highest regard for entrepreneurs and their impact on society: Arthur Rock. I hope it inspires you to remember that while our industry may grow and it may shrink, at the end of the day it’s about building great companies with great entrepreneurs.
Let’s Connect with them. Let’s Discover with them. And Let’s be Inspired by them. If we do this right, the all the rest will follow.
Thank you, and enjoy this meeting.