Still Working in Your PJs at 11 A.M.? You Could Be Managing a Satellite Venture Office

According to a February survey from Telework Trendlines, the number of Americans who work from home jumped nearly 75 percent between 2005 and 2008, from 9.9 million to 17.2 million. The trend owes to a variety of factors, from technological innovations to some companies’ greater focus on their employees’ work-life balances. 

Yet working remotely has distinct advantages and disadvantages, especially if the mother ship is thousands of miles away, as is the case for a wide number of VCs who represent their far-flung firms in California. Polaris Ventures’ GP Mike Hirshland, sent to San Francisco monthly, is but one investor who falls into the category of satellite VC.  Basil Horangic, hired in 2007 from Austin Ventures to open a San Mateo office for North Bridge Venture Partners, is another. (Both Polaris and North Bridge are based in Waltham, Mass.)

For an in-depth look at what life is like for members of this exclusive but growing community of investors, check out a story I’ve written for the September issue of Venture Capital Journal. (It reaches subscribers the first week of next month.) In the meantime, among the numerous things I learned from VCs who represent their firms in the Valley are that:

* It can be tricky not having an office. Richard Yen of LA-based Saban Ventures, for example, spends 75 percent of his time meeting with startups in the Bay Area, yet he says that with his input, the firm decided against renting a second office. “I find it more productive to go out and meet with startups and it gives me a lot of flexibility,” he says.

That flexibility comes at some cost, however. Specifically, Yen says that “even though I explain that I’m mostly [in Northern California], because my business cards list an L.A. address, I still get emails from local entrepreneurs, saying, “Hey, I’ll be visiting L.A. next week; would you like to get together?”

* You have to do far more storytelling. Amy Errett is a partner with Seattle-based Maveron, and like Yen, she represents her firm in the Bay Area. (She’s on the lookout for office space in San Francisco right now.)

But while Maveron is considered a top-tier venture firm in the Pacific Northwest, not everyone in Northern California  — particularly entrepreneurs — know its story, forcing Errett at times to provide the kind of context that locally based firms needn’t bother with.

“It’s rare that people don’t know the Maveron name, “ says Errett. “or that [Starbucks CEO] Howard Schultz [Maveron’s cofounder] is associated with it, or that it’s consumer-focused.”

That said, continues Errett, the firm is “not top of mind [in San Francisco], so you’ve got to create an ecosystem to establish better and proprietary deal flow. I go and introduce myself to a lot of other people,” she says.

* In the plus box, satellite VCs may have a better appreciation of what it’s like on the other side of the table.

“It was a little lonely at the beginning,” says George Ugras, who left Apax Partners a decade ago to open a Palo Alto office for Pittsburgh-based Adams Capital Management. “There’s no support group for [remote VCs], we don’t get together to commiserate,” he laughs.

Still, Ugras calls the last ten years a “very good experience for me. I basically showed up with little other than an idea of what types of investments I had in mind and had to build piece by piece.” And while there’s a pride in having done it, more, he says, “I also think there’s a greater appreciation of what it takes to build something from scratch.”

*You get to ditch the uniform more often than you might otherwise. When asked if he ever finds himself in his pajamas in late morning, Yen good-humoredly concedes that on the occasional days he works from home, because he’s mostly on the phone, “what room I’m in and what I’m wearing is highly variable.”