So, what exactly is a venture capitalist (aka “VC”) and what do they do?

I’ve had a couple of realizations over the past few weeks that culminated in a conversation with my father during the Easter weekend and I think are worth posting on here.

My first realization is that, unlike in the Bay Area / Silicon Valley, most folks in Orange County still don’t know what a venture capitalist is. From a macroeconomic perspective, Orange County is predominately real estate oriented with tourism (think Disneyland, Knott’s Berry Farm, the beaches, etc.) and action sports apparel (think Quiksilver, Oakley, etc.) following close behind… so I suppose it is somewhat understandable. This belief hasn’t been quite as strong with respect to folks in L.A., but I still have to analogize to being a “producer for start-up tech companies” to see true understanding in many of their faces. For those of you that don’t know what a venture capitalist actually is, you can simply click here rather than suffer through my more verbose explanation. For locals that like “comps”, a venture capitalist is similar to a commercial real estate developer. Now that I’ve addressed my first realization, I’d like to turn to my second.

My second realization is that (even among folks that actually know what a venture capitalist is) most don’t know what a venture capitalist actually does. This realization is the result of the frequency of questions I’ve been asked by family, friends, and others over the past couple of years as to what it is a VC actually does on a daily basis. While my short answers have been along the lines of: “it depends on the day… no two days are the same”, etc., I get the feeling my answers were insufficient to satisfy their curiosity so I’ll try to explain here for the masses by way of example. First, let me preface my explanation with a little context. I’ve been a VC for two years and have yet to encounter two identical work-days in terms of my time allocation. Other VCs may feel differently, but I’m only sharing my own sentiments on the matter so feel free to ask others or Ask the VC (full disclosure: I’m a VC blogger for Ask the VC but have not responded to any questions yet). To put things further into perspective, my thoughts here are those of a Managing Director who has raised his own fund (along with co-founder and partner, Sharon Stevenson), made investments, and has been co-managing the fund for two years now. I’ll start by listing my schedule from yesterday and then explain a bit more at the end.

5:45am – 7:00am: Wake up and swim;

7:00am – 8:00am: Breakfast with family while reading the paper;

8:00am – 9:30am: Read several on-line publications… respond to emails… and shower, etc;

9:30am – 10:00am: Drive to office while checking voice-mails;

10:00am – 11:00am: Meet with CEO of start-up to discuss his idea/company;

11:00am – 12:00pm: Speak with CEO of start-up regarding off-shore manufacturing in China;

12:00pm – 1:00pm: Lunch with an entrepreneur looking for his next gig;

1:00pm – 2:00pm: Email and respond to voice-mails;

2:00pm – 3:00pm: Speak with attorney regarding fund matters;

3:00pm – 4:00pm: Coffee with a fellow VC to discuss a deal;

4:00pm – 5:00pm: Drive home while speaking with the CEO of one of my portfolio companies;

5:00pm – 6:30pm: Family time with wife and son;

6:30pm – 7:15pm: Speak with the COO of one of my portfolio companies;

7:15pm – 8:00pm: Dinner with family;

8:00pm – 9:00pm: Email and respond to voice-mails;

9:00pm – 11:00pm: Read and retire for the day.

I generally begin every day with either a swim or a run (when not on the road) to clear my head and “bake in” some quality family time either at the beginning and/or end of the day, but my schedule for the remainder of any given work-day can arguably be broken down into two primary and interdependent activities: “deal making” and “fund administration matters”. I occasionally work through weekends but also will take a random week day off to spend time with family or run errands so my schedule is very fluid to say the least. I’m also trying to post to this blog once a week but find it a challenge to do so. In fact, it is often said that the biggest challenge VCs face is how to allocate their time (the only scarce commodity for most VCs) given the dynamic work environment in which they operate. So, since time is wasting, I need to go…