Patrick Mathieson: Venture Capital

“I was a golf caddy in the summers back in Illinois, and one day this guy came in. He was a start-up CEO.  The next day I gave him a call and told him I would get to California.”

Patrick Mathieson is a venture capitalist at Toba Capital. He writes about technology, companies, investing, and many other things.

There is no one direct route to becoming a venture capitalist. Patrick told me about his mindset for leaving a job at Dell to join Toba Capital. “I wasn’t thinking about compensation in terms of dollars. I was thinking, this guy is a mentor. When I follow this guy, good things happen. I spent a lot more time thinking about how much time I would get with him, and with executives.”

He wore several hats at Dell. As in that position, his current role is fluid, varietal, and based largely in communication. “I probably meet five new people a day at this job,” which is a big perk. “You have a pretense to be talking to people–a wider breadth than you would otherwise.”

“It leads to a lot of interesting conversations, which add on to one another.”

Investors sometimes talk about too many of their interactions feeling subtly transactional when people they talk to–even on a casual basis–are looking for money. Patrick has not had much trouble with this. “When I meet people and they have business ideas, if you take the approach of ‘that’s cool, tell me about it’, it doesn’t set the expectation that you are doing deals constantly.”

The popular image of the venture capitalist is something like the investors on Shark Tank: wealthy people who sit in front of an endless stream of enterpreneurs seeking money. But much of the trench work sounded more like the job of a researcher or reporter. “You try to cram as much emails and reading and conversations into your day as possible and hope you are going in the right direction…the whole thing isn’t a loose operation, but much of it is very unstructured.”

Patrick cited Quora as a crucial tool for improving his workflow. “Quora is one of the best things, one of the most exciting things that’s happening to my career. It’s feeding the things that I do at Toba Capital, and the things I do at Toba are going back into my writing.”

Venture capital is an investment vehicle that I don’t understand very well. I wanted to know some important metrics to measure success–is volume of deal flow meaningful? “I think a more important metric is what are the transactions we are doing. Over time, what deals got done? How many of them did you touch? The deal flow is a little imperfect, what is less imperfect is what deals actually got done.”

He highlighted a focus on communication and connection moreso than any particular tricks or tactics. “I think if you ask me that in a year, I would have better tactics and tricks. But right now, if I have any trick it’s just answering and giving people feedback when I can…I just try to respond to everything.”

I asked Patrick about the shift in investment dollars from consumer internet to enterprise. He gave a good reason for why there is such an opportunity for new enterprise software. “Everything partakes in the API economy now, which makes it easier to swap out old stuff. This makes it incumbent on people to keep making good software.” There is less lock-in.

In reflecting on his time at school, he said “I’m generally skeptical of anybody that’s following a path that seems to be safe. When I was at Michigan, quite a few of my classmates wanted to go to Wall Street and become an investment banker. And on the West Coast I guess the equivalent is you go to Google. I’m kinda bearish on both of these. It implies that these plans are worth anything. People underestimate how much breadth and creativity they can have.”

To conclude, I asked him for a broadly applicable piece of wisdom.

“Something I have had on my mind lately is process-oriented goals. If you base your goals on outcomes, you are setting yourself up for failure. You can’t control the outcomes, you can only control the inputs. How this applies to Quora is, all you can control is writing answers–you can’t control how they are received. The more answers I write, the more people are reading them. I try not to get hung up on the outcome.”

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