Venture capital isn’t a career, say the pundits. It’s what you do after you’ve already had a career and want to share your knowledge with promising startups.
But what do you after you’ve been a VC, and haven’t had a remarkable career? These days, an increasing number of venture professionals are about to find out, whether they want to or not.
With venture returns at an all-time low and raising a new fund becoming increasingly more difficult, firms are quietly exiting the scene or pushing partners out the door.
“VCs are loose on the land,” says Paul Kedrosky, who blogs about venture capital and is a senior fellow at the Kauffman Foundation. “In the last six months, I’ve seen more resumes and emails from ex-VCs, or soon-to-be ex-VCs, than I have in the prior nine years.”
Kedrosky recently wrote a report called “Right-Sizing the U.S. Venture Capital Industry,” in which he predicts the number of funds in the market and the amount of capital they raise could shrink by as much as 50 percent.
“The venture industry is in free-fall right now,” he says.
The burning question for many VCs is: What’s next?
It can be hard to take another job—even a really good job—after you’ve enjoyed the power, prestige and money that come with being a venture capitalist.
To prove that there really is life after VC, we found five people who left the industry for dramatically different careers. Though the transition wasn’t always easy, they ultimately found fulfillment by following their hearts and doing what they loved. Here are their inspiring stories.
Switching Sides: Perry WuPerry Wu was born with venture capital in his blood.
He grew up in Sunnyvale, Calif., a stone’s throw away from one of the greatest venture-backed companies of all-time: Apple Computer. As he kid, he’d visit nearby Stanford University just to play with the mainframe computers on campus.
And, in the late 1980s, a year out of Stanford with an engineering degree, Wu got a call that few graduates ever get. Jim Breyer of Accel Partners was on the line offering him a job at the prestigious venture firm.
“I knew very early on that Silicon Valley was the place for me,” says Wu. “It’s one of the most dynamic and exciting places in the world.”
Wu took to venture capital like a duck takes to water, eventually leaving Accel and launching his own $100 million fund called Basis Ventures.
In 2000, he merged his firm with ComVentures to form a megafund that grew to $1.5 billion under management. But six years later, Wu was disillusioned with the venture business. It didn’t help that ComVentures was slowly coming apart at the seams and would later be folded into another firm called Fuse Capital.
“I guess I lost a little confidence in the [ComVentures’] team and strategy, and once you do that you’re just sitting there collecting a paycheck and that’s not how I wanted to spend my life,” says Wu.
He left ComVentures in 2006 with visions of starting a brand new fund. But he soon found himself pouring all of his energy into the development of a content delivery network that promised to deliver HD-quality video faster, cheaper and more efficiently than anything else on the market.
Starting his own company had always been his dream. Wu knew it was now or never. “Life is more fun when you get to do different things,” he says. He named his self-funded company BitGravity and took on the job of chairman and CEO. But going from high-powered, high-paid VC to founder of a garage startup was more difficult than Wu ever imagined.
“I have three young kids, so it was hard to walk away from a big paycheck,” he says. “Venture is a pretty cushy lifestyle. I mean, who in their right mind would want to leave a venture job?”
Wu was also scared of losing his identity. For the bulk of his professional career, he was a VC and nothing but a VC. This was his community, but he worried about losing touch—and credibility—with his peers in the venture world.
Even today, he looks back wistfully on his old life. “The great thing about being a VC is that, at the end of the day, it’s never your problem, it’s the CEO’s problem,” he says. “Sure, you can dish out some advice or tell the CEO what to do, but ultimately you don’t own that decision.”
Now, for better or worse, he owns it all. And these days, the news is all good for BitGravity. The company is on the verge of profitability and recently landed a huge strategic customer in Tata Communications. Wu is even entertaining the notion of raising institutional money, something he shunned early on because he didn’t want to relinquish control of the company.
Increasingly, he’s fielding calls from a variety of VCs. Some want to invest in his company. Others simply want his advice as they contemplate their own career change.
“I tell people that starting over isn’t such a bad thing,” he says. “Let’s face it: Venture capital hasn’t been very fun for the past 10 years.”
Finding Meaning: Catherine Rohr
For six years, Catherine Rohr had her “dream job,” hunting down the hottest venture deals, first for Summit Partners in Palo Alto, Calif., and then for American Securities Capital Partners in New York.
“I would cold-call like crazy,” she says. “I would go to every trade show, from poultry shows to pharma shows. I would drive by office parks and talk to people at the reception desk. I would check the want ads to see who was hiring and then phone up the CEO. I was really focused on the origination of the deal.”
She was 28 and making more than $200,000 a year. But suddenly, it wasn’t enough. A spiritual conversion and a two-week trip to an orphanage in Romania made her wonder why some people have so much but others so little.
“I started to feel this great dissatisfaction,” she says. “I wondered if this was all there was to life: doing one deal to do a bigger deal to do an even bigger deal, until you end up with a big, fat pile of money. If I died today, why would my life even matter?”
Rohr searched for an answer, enrolling in a philanthropy program at New York University at night. Then, one day in 2005, a friend invited her to tour a maximum security prison in Texas. “I hated criminals,” she admits. “I thought they were wild animals who should be burned alive.”
But what she discovered took her breath away. “Prison is America’s most overlooked talent pool,” she says. “Many gang members are proven entrepreneurs who built highly successful drug operations. The thing they were bad at was risk management.”
A few months after that first visit, Rohr quit her venture job, moved to Texas, and established the Prison Entrepreneurship Program (PEP) to teach inmates how to be legitimate business leaders when they leave prison.
Her family, friends and colleagues thought she had lost her mind. She emptied out her savings account and dumped every last penny into PEP. She also tapped her venture associates for funding. Rohr raised $230,000 for the program her first year. This year she expects to raise $2.5 million.
The skills she learned as a venture capitalist come in handy every day. “As a VC, I learned early on that what you’re really investing in is people,” she says. Similarly, PEP, which recruits from 65 prisons across Texas, accepts only the most promising candidates. “We’re looking for leaders,” says Rohr. “If you weren’t good at selling crack on the street corner, you’re probably not right for PEP. We want the guys who know how to run an organization and get stuff done.”
The program has been remarkably successful. It has graduated some 500 inmates who have gone on to launch 59 companies upon their release. PEP says the recidivism rate among its graduates is less than 10%, dramatically better than the national average of about 65 percent.
Besides teaching business skills, such as business plan writing and financial terminology, PEP is bolstering its post-release program to include access to financing. One former inmate secured $150,000 for his real estate investment business from PEP’s network of accredited angel investors. PEP is even hiring an entrepreneur-in-residence to help former inmates grow their companies.
“The work that I do now is difficult and gut-wrenching and tear-jerking, but it is also the most rewarding and fulfilling thing I have ever done,” says Rohr. “There is no way I could return to the venture world just for the sake of doing another deal.”
Building Something Real: Richard Oedel
It’s a long way from venture capitalist to furniture maker, but Richard Oedel has successfully carved a path from one career to the other.
Of course, there were lots of people who thought he had flipped his lid for leaving a lucrative job in finance for the life of a starving artisan. “The typical response was, ‘You’re nuts!’” admits Oedel. “But there were others who thought it was great that I was starting a whole new life and doing something I really loved.”
After many years running his own manufacturing firm, Spir-IT Inc., and nearly a decade more with venture capital firm Brookwood Partners in Salem, Mass., Oedel took a hard look at his life and wondered what he wanted to do next.
Oedel had sold Spir-IT in 1999 and was concentrating full-time on Brookwood, a $15 million fund he had started with several other partners a few years earlier.
Instead of focusing on dot-com or software deals, like most other firms in the late 1990s and early 2000s, Brookwood zeroed in on unheralded technologies targeted at the manufacturing sector.
The firm made dozens of deals over its lifespan. A typical investment was MicroE, a maker of miniature rotary encoders for things like medical equipment and data storage devices. The company, which raised a seed round from Brookwood, was acquired in 2004 by GSI Lumonics for $55 million.
Despite these kinds of exits, the Brookwood partners asked themselves whether they wanted to put all their energies into growing the fund or focus on other pursuits. “None of our deals really had Google-like home run potential,” says Oedel. “We decided to scale back and, a few years ago, we decided not to make any new investments.”
That left the question of what to do next. Oedel had always been fascinated with historical preservation and he loved working with his hands. In fact, his very first job was as a machinist’s apprentice. While still at Brookwood, he had actually enrolled in a two-year furniture making program in Boston and loved every minute of it.
But the idea of becoming a full-time furniture maker was a daunting prospect. Oedel was full of doubt. “For a long time I wondered if this was really the right thing to do,” he says. “Will anyone really care about what I make, and do I really care enough to do this as well as I need to?”
Oedel understood that he had to be very, very good to make a living at furniture making. Eventually, he discovered that he had a knack, and that people were actually willing to pay him for his creations.
These days, Oedel is a partner at Fort Point Cabinetmakers in Boston and earns about $70,000 to $80,000 a year, a far cry from his venture salary. But it’s not the money that makes him happy—it’s doing what he loves and being appreciated by his customers.
Oedel makes everything from chairs to tables to cabinets. He specializes in modern adaptations of traditional design. For one client, he recently completed a set of hand-carved cabinets that could have been found in a 15th Century European castle. The thing he loves most is knowing that his creations will be around for hundreds of years and will likely be passed down from generation to generation.
“There’s no better feeling than making a piece for a client and seeing their eyes light up,” he says. “Talk about psychic satisfaction.”
Facing the Music: Heidi RoizenHeidi Roizen had a notable 10-year run in venture capital, investing in companies like iPrint.com and AuctionDrop. By 2007, however, her venture career came to a halt when her once-prominent firm, Mobius Venture Capital, opted not to raise another fund after a string of bold bets went bad.
Approaching her 50th birthday, Roizen was too young to ride off into the sunset. If she still wanted a productive career, she knew she’d have to face the music.
When she dropped out of the venture rat race, she focused on getting herself back in shape. But she couldn’t find a good soundtrack for her workout regimen. So she decided to create one herself.
The only problem was that she didn’t have a musical bone in her body. “I don’t sing well, haven’t played an instrument since college, and know nothing about the music industry,” she says.
But like all good VCs, she leveraged her network. She called on good friend Thomas Dolby, who wrote the 1980s hit “She Blinded Me with Science.” “Thomas gave me great advice about creating an entire thematic album, and also about recruiting the great talent I needed to get this to fly,” she says.
As a VC, Roizen had to convince hot startups to take her money. She used similar skills to sign up renowned music producer George Daly of About Records and two-time Grammy-nominated songwriter David Malloy. She even penned lyrics herself for songs like “Skinny Jeans” and “I’m a Hottie Now.”
“It’s all about having a vision of what you want to accomplish, and then recruiting
people far better than you are to make it real,” says Roizen. “That’s a lot like venture!”
At first, friends and colleagues were convinced that Roizen had gone off the deep end. But they soon came to realize that this was more than “Heidi’s mid-life crisis.”
The end result was SkinnySongs, a collection of upbeat workout tunes that sold 10,000 copies and finished 2008 as a top 40 indie release. Roizen and her music have been featured in Redbook, on CNN and elsewhere. She also lost 40 pounds in the process, and inspired thousands of women to do the same.
“It was very gratifying to find how much people resonated with the idea,” says Roizen. The experience of creating and marketing SkinnySongs also reminded her “how hard it is be an entrepreneur.”
Selling 10,000 copies is nothing to sneeze at, but even Roizen admits her current income isn’t exactly on par with what a VC makes. Though SkinnySongs provided an amazing outlet for her “to do something personally meaningful and very creatively rewarding,” she’s ready to return to her traditional business roots.
“After taking this great break from the world of VC, I did find I missed working in a collegial environment on business issues,” explains Roizen, who decided to re-enter the business world in corporate governance. She was recently elected to the board of TiVo.
Roizen is also thinking about reigniting her romance with the venture world. “I still meet with entrepreneurs every week and still get deal flow that I try to send to the right places,” she says. She may even affiliate herself with a venture fund so she can work with startups again. “The sparks are still there,” she admits.
Hollywood Ending: Bob ComptonBob Compton is a professional filmmaker. And that still has him scratching his head.
“I never thought in a million years I’d ever become a filmmaker,” says the former VC. “Honestly, I never set out to become one, but all of a sudden that’s exactly what I am.”
Last month, Compton premiered his latest feature film: “Two Million Minutes: The 21st Century Solution.” The movie centers on the lives of low- to middle-income students who are attending what Compton calls “the best school in the world.”
The film is a follow-up to his first feature, called “Two Million Minutes,” a documentary that explores the lives of high school students in the United States, India and China and shows how the United States is falling behind its economic rivals because of its paltry emphasis on math and science. Two million minutes is the equivalent of four years: the span of a high school education.
The film, now available in DVD, has sold 20,000 copies and has even earned Compton an audience with President Barack Obama.
Compton is currently putting the finishing touches on a new documentary called “Sole of a Hustla,” which chronicles the trials and tribulations of a young, African-American entrepreneur, Checliss “Big C” Rice, who tries to make the big time with his urban footwear company.
From the day he graduated from Harvard Business School in 1984, Compton knew exactly what he wanted to be, and it had nothing to do with filmmaking. He wanted to invest in technology startups.
“I just loved the variety of seeing all these new, exciting companies,” he says. “These were startups that would one day change the world.”
A year after Harvard, Compton landed a position at First Chicago Venture Capital. From there, he moved to Indiana where he served as a general partner at CID Equity Partners from 1987 to 1997. His signature deal was help-desk software developer Software Artistry, which went public in 1995 and then was acquired two years later by IBM for about $200 million.
“Back then you couldn’t get anyone from the coast to invest in a Midwest deal,” he says. “I had almost no competition for early stage technology deals.”
When Compton started at CID, the firm was managing a $27 million fund. By the time he left, it had grown to $350 million. The new partners wanted to transition from venture deals to leveraged buyouts.
Compton didn’t feel comfortable in the LBO world, so he left the firm and went to work for one his portfolio companies, medical device maker Sofamor Danek Group. He served as the company’s president until 1999, when Medtronic acquired the company for $3.7 billion.
Compton tried retirement, but still in his mid-40s, he was bored silly after just two weeks. He threw himself back into the venture world, investing in tech startups around the Memphis area, where he had settled with his family.
One of his portfolio companies had about 100 engineers in India, so in early 2005 he jumped a flight to Bangalore to see for himself why so many U.S. jobs were migrating overseas. He was amazed at what he saw. “These engineers were great in math and science, but they could also quote Shakespeare and Shaw and rattle off U.S. history,” he marvels. “They were incredibly well-rounded, and they learned it all in high school.”
That’s when Compton realized he had stumbled on a major untold story. He hired a director, went to the cities and remote villages where these engineers had grown up, interviewed their headmasters, and filmed everything he saw.
“Being a filmmaker is a little like being a VC,” he says. “You look for small bits of information that form a pattern. Everything is very faint at first, but as you collect and organize more information, the real story starts to emerge.”
Today, storytelling has emerged as Compton’s main passion. He recently formed his own production company, True South Studios, and is reading scripts and making plans for several new projects, including dramas, comedies and more documentaries.
Would he ever return to venture capital? “Nah, that’s hard work,” he jokes.
VENTURE CAREER: Spent 12 years as a VC, first at First Chicago Venture Capital, then as a GP for CID Equity Partners in Indianapolis, Ind., from 1987 to 1997. Signature deal was Software Artistry, a help desk software developer that completed a $26 million IPO in 1995 after raising $3.4 million from CID and Summit Partners. Software Artistry was acquired in 1997 by IBM for about $200 million.
NEW CAREER: Documentary filmmaker. Started his own production company, True South Studios, in 2008.
QUOTE: “Being a filmmaker is a little like being a VC: You look for small bits of information that form a pattern. Everything is very faint at first, but as you collect and organize more information, the real story starts to emerge.”
VENTURE CAREER: Co-founder and partner of Brookwood Partners in Salem, Mass., from 1994 to 2007. The seed stage firm focused on startups that made technologies focused on the manufacturing sector, such as MicroE, a maker of miniature rotary encoders for medical equipment.
NEW CAREER: Custom furniture maker at Boston’s Fort Point Cabinetmakers, 2005 to present.
QUOTE: “There’s no better feeling than making a piece for a client and seeing their eyes light up. Talk about psychic satisfaction.”
VENTURE CAREER: Associate for Summit Partners from 1999 to 2002; Director for American Securities Capital Partners from 2002 to 2005.
NEW CAREER: Founder of Prison Entrepreneurship Program (PEP), a nonprofit that teaches inmates how to be legitimate business leaders when they leave prison.
QUOTE: “I wondered if this was all there was to life: doing one deal to do a bigger deal to do an even bigger deal, until you end up with a big, fat pile of money. If I died today, why would my life even matter?”
VENTURE CAREER: Managing director of Mobius Venture Capital from 1999 to 2007.
NEW CAREER: Founder, CEO and “Chief Lyrical Officer” of SkinnySongs, 2007 to present. Member of TiVo board of directors, June 2009 to present.
QUOTE: “It’s all about having a vision of what you want to accomplish, and then recruiting people far better than you are to make it real. That’s a lot like venture!”
VENTURE CAREER: Associate for Accel Partners from 1989 to 1992; venture partner for Bedrock Capital from 1998 to 2000; founder/GP of Basis Ventures (later rolled into ComVentures) from January to October 2000; GP of ComVentures from 2000 to 2006.
NEW CAREER: Founder, chairman and CEO of BitGravity, a content delivery network for HD-quality video, from 2006 to present.
QUOTE: “I tell people that starting over isn’t such a bad thing. Let’s face it: Venture capital hasn’t been very fun for the past 10 years.”