The New York City cohort of MIT delta v enjoyed another talk last week this time from venture capitalist and Sloan MBA alum Bob Greene, who is a Managing Partner at Contour Venture Partners, an NYC-based, early stage venture capital firm. Bob provided an overview of the VC industry, valuable advice on how to build and navigate relationships with VCs, and his take on the unique New York City entrepreneurship landscape.
What do VCs look for? The “Big Gulp” Model
Bob succinctly summed up the key criteria that he and other VCs use to assess startups with an acronym, which he calls the “Big Gulp”: GULLLP. This stands for Great ideas, Uniqueness, Leadership, Large market opportunity, Location, and Pricing/valuation. Bob highlighted the fact that these criteria account for the product, company, and team. While of course it’s appealing to have a “smart idea” and “stay ahead of the pack,” it’s equally important to have “an emotional commitment to your business and strong insight into what you’re doing.”
Doing your research on VC partners: “We’re all picking partners”
In describing how his firm evaluates potential investments, Bob emphasized the importance of both parties performing their due diligence, not just the VC firm. “The relationship is two-sided; you should be asking questions of your investors, too,” he said. “Otherwise, it’s like getting married before you date!” He gave examples of the many items on which entrepreneurs should ensure they have clarity before entering into a partnership: “Have discussions about everything: expectations on both sides, how often you’ll have meetings, when and how you prefer to communicate…”
The power of proximity: Investing in New York City
Finally, Bob elaborated on one of the factors in his “Big Gulp” model that is unique to Contour Venture Partners’ philosophy: Location. His firm invests primarily in companies based in New York City, with about 90% in Manhattan and Brooklyn specifically. By “investing close to home,” he is able to understand these startups’ market and landscape extremely well. The proximity has also allowed him to advise these startups more closely and build deeper relationships with their founders. As a result, Bob is also able to partner with successful entrepreneurs on their follow-on ventures in the future. “There are many that we’ve backed 2 or 3 times.”
Beyond the strategic benefits, Bob was also quick to point out that New York is a great hub of entrepreneurship. “All of your customers and potential employees for so many industries are here,” he said. “The area is booming!”