America is home to some pretty amazing success stories. Here's one: an English major teaching journalism got discouraged when he realized he would not be able to make a living. Yada yada yada and now he's a big time Boston venture capitalist whose helped created companies worth nearly $9 billion. How could your startup win some of his money?
The English major is Larry Bohn who was an English teacher in the Boston area whose career took off when he got into business - both as a CEO and a venture capitalist - where he has helped generate about $6.9 billion in value for investors.
He progressed from a local minicomputer company, Data General, to become CEO of two startups that he took public and sold, then became a venture capitalist and made several successful investments in Boston-based and other companies.
As he said in a November 3 interview, "I grew up in the Boston area and my father died when I was 16. I got a scholarship to the University of Massachusetts and was an English major in the late 1960s and early 1970s. From there I got a Master's in English Linguistics at Clark University in Worcester and then got a job teaching at a Boston junior college. I was disheartened because I realized that I could not make a living as a professor. But in addition to writing, I liked computer programming (having taken a college course in Fortran). So I got a job as a technical writer at Data General and rose up the management ranks. I went on to be head of product at electronic workstation publishing company, Interleaf."
Bohn became a CEO and venture capitalist. As he said, "From there I ran PC Docs, a maker of software to handle word processing documents and email that went public on the Toronto Stock Exchange, later got a U.S. listing and was sold [in 1999 for $155 million to Canadian software company], Hummingbird."
"After that I wanted to get into the Internet so I took over as CEO at Netgenesis, a website analysis service founded by some MIT graduates. We took it public in [February 2000] - and its market capitalization peaked at $1 billion before sinking to $10 million after the dot-com crash. We sold Netgenesis to SPSS [in December 2001 for $44 million]," he said.
From there Bohn became a venture partner at Boston venture capital firm General Catalyst which was just getting started. He led General Catalyst's investments in marketing software provider HubSpot which went public in October 2014 and by November 3, 2017 was valued at $3.1 billion; e-commerce services provider DemandWare which went public in March 2012 and was acquired by Salesforce for $2.8 billion in July 2016; San Francisco-based merchant finder Locu which GoDaddy acquired for $70 million in August 2013; mobile payment service provider Paydiant which PayPal acquired for $280 million in March 2015; and Burlington, Mass.-based cybersecurity software maker Black Duck -- which announced in November 2017 that it will be acquired by California-based chip design software maker Synposys for $565 million.
From this experience, Mr. Bohn has distilled important insights about Boston's startup culture. He likes to invest in entrepreneurs who have talent, optimism, and resilience. And he reflects the common Boston preference for funding founders with a prior track record of successfully solving technical challenges facing businesses..
As he said, "America is a place where dreamers can do great. Someone with talent who is driven, resilient, and ambitious can do a lot."
In deciding where to place his bets Bohn focuses on founders with two key traits: enterprise expertise and resilience.
Bohn places a big emphasis on whether a founder can solve a business problem facing companies. As he said, "I look for entrepreneurs who focus on the enterprise market and have domain expertise, over-the-horizon radar; and the vision and charisma to attract and motivate a great team.
He continued, "To test an entrepreneur's domain expertise I ask 'Why did you come up with this idea? Why do you think it is big? Did you talk with people about it? Are competitors doing it?'
He also wants entrepreneurs who don't get discouraged and adapt in a positive way to obstacles. As he said, "Founders must be resilient because startups never have a straight path. I want people who can recover from failure and pivot. To test their resilience, I ask challenging questions. If they react sharply when challenged, I am concerned that this is how they'll be in front of investors, customers, and employees."
Often a single entrepreneur does not have all the skills needed. But that is not necessarily a deal-killer. After all, it can be ideal to have two cofounders who complement each other and act as one person. That's what happened at HubSpot. Brian Halligan is a great sales person. He smiles, shakes your hand, he's warm, he sees the future and is engaged in making it happen, Dharmesh Shah is a brilliant technologist who is a good tinkerer. He talks about technology in a facile way. They work together very well."
Even if you don't satisfy Bohn's two tests, you should now have a clearer idea of what Boston area venture capitalists look for.