I recently attended the NVCA Annual Meeting in Boston, and I am really pleased to be joining the organization’s Board of Directors. I joined because I believe NVCA can be a powerful force in fulfilling one of my missions which is to make the world a better place for entrepreneurs.
The Board consists of leaders of the venture industry, including GPs of venture firms large and small focused on IT, cleantech, healthcare, and bio/medical technology. Association President Mark Heesen and his team are exceptional. It’s an exciting group to engage behind any effort, and there are some significant issues facing innovation at this moment including patent reform, immigration, US tax policy, healthcare legislation, visa reform and US competitiveness. And make no mistake, innovation is the key to prosperity and wellness for the world of tomorrow. The stakes have rarely been higher.
The NVCA is important because venture capital matters to the global economy.
Venture capital investment fuels innovation, and its impact is by far the biggest bang for the buck of the modern economy. Consider the often-quoted statistic that VC investment accounts for just 0.02% GDP but VC-company revenues accounts for 18% of GDP. Seven of the top twenty US companies by value were venture backed. Two of the top four most valuable companies in the world, (Apple and Microsoft) were started by great entrepreneurs with some venture capital.
But it’s not just the dollars of impact that change the economy: venture-backed companies employ about 10% of the US workforce. The Kaufman Foundation study reveals that all net new job creation in the US comes from startups. At Startup America Partnership, the White House stated that 40% of the US GDP comes from companies that didn’t exist in 1980. The future of employment in America can be seen in the innovative startups re-defining massive industries like healthcare, energy, and technology.
There is also the social aspect of our industry that can’t be underestimated. Venture capital provides the funding required for brilliant researchers to experiment with new biotech treatments and new medical devices that can save millions of lives. Venture capital fuels the world’s quest for clean energy, and closer to my world, venture capital powers the brilliant creators of products that touch literally millions of people every second through the internet.
The NVCA is large and diverse: there are VCs with tens of millions under management as well as some groups with billions. Members spend their time doing seed deals in the Valley, while others explore India, China, Jordan, or Brazil. As many in the Association know the ins and outs of Facebook as do the ins and outs of the FDA. Despite this diversity, the group shares a passion and reverence for entrepreneurship, which I love. The two main theme’s from this year’s meeting were the importance of innovation for the world’s future, and honoring the incredible power of collaboration between entrepreneur and investor.
These themes resonated with me at a deeply personal level, because as a Founder and VC over the years, I have seen firsthand how the creative power of a startup can improve the lives of those around it, and none of my successes in either realm could have occurred without intense collaboration.
The Asssociation directly impacts entrepreneurs, Founders, and employees in a more subtle way. Company culture is often set day one, when usually only Founders and VCs are around the table. Later on, Boards of Directors, including VCs, have big impacts on high growth companies. Our industry can use its considerable resources to create supportive, innovative portfolio company cultures that impact employees across the US.
Company culture gets brought home by employees at the end of the work day. Good company cultures make for happier, more creative, and satisfied employees, all of which go home at night to friends, family, and their local communities. By example, the 120 Founders of the 65 True portfolio companies now employ over 700 employees with over 3000 family members. We view our impact with this lens, and we seek to inspire and support our entrepreneurs to become leaders in their communities.
If one small firm like ours can strive to positively impact the lives of our employees’ families, imagine what the entire venture industry could do.