This article is written by Genping Liu, Partner, Vertex Ventures, and was originally published on Medium. Reproduced with the author’s permission here.
One of the most fulfilling moments in my VC career was when Instarem’s founder, Prajit introduced me to his friends in a special, most heartfelt manner. He mentioned, “Vertex is our Series A round investor, but more than that he is also a co-founder of Instarem.”
One key value that our Vertex team stands to deliver is our value-addedness to our portfolio. In fact, a better way to describe my feeling is that we strive to embody a co-founder mentality. A co-founder is someone you can always bounce off ideas with openly, someone you can constantly nudge for business opportunities or introduction, someone constantly fighting with you at the front lines, but more importantly, someone you can feel safe being candid with- regardless if the news is good or bad. With a co-founder mentality, we pour our hearts into the business and are constantly thinking of ways to work with the management team to help push the business forward.
However, we also remain clear that we are an investor, and strictly do not behave as operators. We provide strategic directions and advice, business leads and opportunities, recruiting recommendations, foster and introduce follow-on investors relationships, and constantly find ourselves launched knee-deep into constructive intellectual debates on product features etc. However, we always respect and leave it to the management team to make the final call. In fact, we love the moments when founders challenge our ideas with well-founded rationales — as it only means that we have successfully stretched them hard enough to contemplate out-of-the-box. Hence, we exercise constant discipline on the importance of cultivating a cofounder mentality, but not a co-founder role.
As a result, our investment philosophy has hugely shaped our investment thesis and footprint. One of the sacrifices we have to make is to strictly restrict the number of investments we do and remain highly selective by only embarking on 1~2 investments per partner per year. This means that we have had to part ways with many great opportunities over the years. The byproduct of this is that Vertex tends not to be regarded as “an active investor” by deal count. However, while this is indeed the case, few realize that the fewer the number of portfolio companies we have, the more time we can invest in each of them. (For e.g. we are constantly on WhatsApp with our founders, catching over drinks to share ideas, making introductions, looking for talent, sitting through key meetings, pushing the innovation boundaries together etc.) Thus, we strive not to be “active” by the number of deals, but to be “active” by the amount of energy, time and contribution to each of our portfolio companies. And of course, the most heartening part is when we hear our portfolio founders telling others how Vertex believed in them when nobody else did.
Entrepreneurship is one of the most heroic and fulfilling career choices in my opinion, and I have always felt privileged and humbled to be given a front seat on our founders’ journeys. My only hope is that I will be able to keep on building such meaningful live-long relationships with more of you in time to come.
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