This past week on May 7th, we were fortunate enough to have Jeff Jordan come in as a guest speaker for the Stanford InSITE fellows. Jeff has been a partner at Andreessen Horowitz since 2011 and serves on the boards of AirBnB, Belly, Circle, Crowdtilt, Fab.com, and Pinterest among others. He was the former President and CEO of OpenTable and joined the company in 2007 where he helped take the company public in 2009. Prior to that Jeff was also the President of PayPal and SVP at eBay and he received his MBA from the Stanford GSB.
The meeting was an opportunity for the Stanford fellows to ask Jeff questions about startups and VC in a casual setting. He talked about how the greatest lesson he learned on how to manage others was how necessary it is to know yourself well in order to understand how others perceive you. He mentioned that the reason he transitioned from the operating roles at OpenTable, PayPal and eBay to being a VC at a16z was because he found the operating experience to be all consuming and enjoyed working hard but found it to be very stressful. He also found, after a while, that he was repeating a lot of what he had done previously and finding it less challenging. On the side, he would often meet with entrepreneurs to provide them advice and hear about their new ideas and he discovered that he would really look forward to those meetings, so he figured he would look into doing it full time as a VC.
Jeff also discussed how the a16z model is very disruptive to the VC industry because the firm employees over 100 employees, the majority of which are focused on helping the companies in the portfolio with everything from marketing, recruiting, corporate strategy to operations. All the partners at a16z have experience either operating companies at a senior level or founding their own companies and he finds it more helpful to the entrepreneur when the VC has gone through the same experience before in terms of providing advice and guiding them on the Board.
Since joining a16z, Jeff has found that the hardest aspect of being a VC is time allocation. He is actually working 2 to 3 hours longer each day than he typically worked at OpenTable since he is covering 12 investments focused on the consumer space. Most VCs typically only have capacity to sit on the boards of 10-14 companies, which is why they typically ask for 15-25% ownership in term sheets. He has also found that a good chunk of his time is spent on writing blog posts, which a16z requires all partners to do. He has found that the blog is a great way for the partners to get their thoughts out there and provide additional guidance to entrepreneurs.
We ended the meeting talking about what Jeff finds to be the most difficult part of the diligence process for investments. He mentioned that one of the most important factors is to get a good grasp of the team and people. He often does this by focusing on learning about their story and how they came up with the idea. However this is becoming more coachable these days, since many startup accelerators like YC are training their entrepreneurs to get their story down early in the process. It can be really difficult to understand the intangibles of the team, but he often looks for conviction and courage in the founders and entrepreneurs who are passionate about the company because they are doing it for a greater purpose or mission instead of making a lot of money and selling to Facebook or Google.