We need principles in our crafts. They give us direction and define our style. In the craft of venture investing, my first principle is this: Bet on the most talented founders I can find. Of course I have to balance fast growth, large markets, best-in-class products—all critical factors. In the end though, talent is my lodestone.
Well then. So what does talent even mean? It's fair to say it's a complex quality. But that's doesn't help. We need a definition we can act on. The way I like to frame talent is the Ability to do Something Well. It's as simple as that.
With startup founders, I would break it down a little further:
Smarts. Do they have the brains, insight, and resourcefulness to rewrite the rules of their industry?
Skills. What can they actually do that others cannot? Are they industry experts, technically adept, or natural leaders?
Drive. Do they have big ambitions, the need to prove something, and the energy to overcome enormous challenges?
Investing in talent pays off. My analyses show that high-talent founders are much more likely to have an exit than other VC investments. Even more impressive, high-talent founders are dramatically more likely to achieve unicorn valuations greater than $1 billion. Returns on talent are especially big at the earliest stages, where it is far less clear who the eventual winners will be.
The opportunity costs to start a company is greater for high-talent founders. They would excel at whatever else they could have chosen to do. For them to start something demonstrates an incredible conviction that what they are building is right.
Good investors know how to find these kinds of entrepreneurs. Talented founders, of course, can be found anywhere. But they also have a tendency to cluster in well-known networks—think YCombinator, Stanford, MIT, PayPal, or Yammer. McKinsey is another incredible pool of top-tier founders—I feel fortunate to have that network and to work with so many of them.
So with that...
A Team to Bet on: Investing in Koru
I first met Josh while he was at the Bill & Melinda Gates Foundation and I was at McKinsey. Josh is also a McKinsey alum. I knew he had cofounded Koru and called him this winter to catch up about a few things. As luck would have it, he mentioned they were closing a round and asked if I would be interested in joining. He introduced me to his cofounder Kristen, who immediately struck me as a very dynamic leader. Their traction in the market was impressive. Rob Hayes of First Round was a big supporter of the company. It soon became clear that this was an all-star team, which matched my commitment to investing in the best talent.
Koru helps college grads find jobs by putting them through an intensive business bootcamp. Its four-week program gives graduates the practical skills employers seek. Graduates get some real-world experience working inside companies like LinkedIn, Zillow, and Amazon. The result: 87 percent of alumni find a "career job" within six months of completing the program.
Koru prepares students to enter the workforce. Most college seniors are simply not ready for professional jobs. Even students with practical degrees are struggling to find employment. Employers expect graduates to move fast, manage projects, develop plans, and have grit. They need tenacity in the face of ambiguity and who understand what it means to take ownership.
We are investing in an $8 million Series A round led by existing investor Maveron, with participation from Battery Ventures, City Light Capital, Trilogy Equity Partners, and First Round Capital. Koru will use its new funding to scale its program and launch an online job marketplace for employers to find talent based on the competencies. Read what others have to say at the Washington Post.