THERE is an old parable about the concept of commitment when
it comes to breakfast. The story goes that when looking at a plate of the
traditional fare of ham and eggs, it's obvious that the chicken is an
interested party, but the pig is truly committed.
When I tell this story to entrepreneurs, my point is usually
to contrast the approach venture capitalists have to startups as compared to
entrepreneurs. The VC is an interested party, but at the end of the day if
their startups live or die they typically still have their job, their office
and their portfolio of other investments.
The entrepreneur, on the other hand, is the pig - truly
committed to the outcome, with no fallback.
But lately I've been thinking about the parable of the pig
and the chicken in the context of the characteristics that make a great
entrepreneur - and the kind of entrepreneur that we VCs in general, and my firm
Flybridge Capital in particular, like to back.
In short, we like to back pigs - entrepreneurs who are truly
and completely committed to the outcome of their venture, have a lot of stake,
and no fallback.
Too chicken to go all out
How do we discern the difference between the two
entrepreneurial archetypes? It's usually relatively easy, but sometimes subtle.
Here are a few of the top characteristics we see in entrepreneurs who appear to
be exhibiting behaviour that suggests they're more like "chickens"
when it comes to their startup:
- Prefer to wait to
start their venture only after they receive funding. ("We are ready to go,
as soon as you give us your money." Um, does that mean you won't start the
company if I don't give you my money?)
- Don't quit their
day jobs before receiving funding. ("This has been a side project for a
year, and I can't wait to focus on it full-time." Um, if you can't wait –
why are you waiting?)
- Don't physically
move themselves or their teammates to be in the same geography when starting
their venture (think Eduardo Saverin in the Social Network spending his summer
- Prefer to play a
hands-off chairperson role or look to quickly hire a chief operating
officer/president in the early days rather than operate as the hands-on
CEO/president. (I'll leave out the numerous examples to protect the innocent,
but as a rule of thumb companies with fewer than 40 employees don't typically
need a COO.)
- Are unwilling to
fully leverage their own personal and professional networks to drive
recruiting, fundraising and business development.
Bringing home the bacon
On the other hand, the top five characteristics we see in
"pig" entrepreneurs include:
- Commit to the new
company everything they have - even if that means moving their families,
quitting their jobs, or even dropping out of their schools (as much as I don't
want to condone or encourage this).
- Put themselves
"out there" publicly and visibly with the industry, their
relationships, family and friends. If the company is a failure, it will not be
a quiet one.
- Have not yet achieved a mega success already
and/or yet achieved wealth beyond the point of needing to work again. (I
remember my mentor and boss at Open Market, CEO Gary Eichhorn, congratulating
me when I became a first-time homeowner in the mid-1990s and observing: "I
hope you got a large mortgage so that you are locked in and highly motivated to
- Participate in a
minimal set of outside interests and hobbies that aren't directly related to
their business. Starting a company is a consuming, obsessive, 24-7 endeavour.
Raising a family and remaining healthy is enough of a battle. When we see
entrepreneurs with long lists of hobbies and outside interests, it's a red
One of my partners went so far as to look up the number of
times an entrepreneur played golf one summer (which apparently is public
information somehow, although I'm not a golfer so still don't know how he
figured this out) as a barometer for how hard they were applying themselves to
their new venture.
- There exists a rare
breed of entrepreneur that have already had mega success but are so special and
driven that they remain obviously hungry and scrappy. For these entrepreneurs,
the key is to watch and see if they're still as hands-on as they ever were (eg,
obsessed with the product, knee-deep in the financial model, out in front of
the organisation in selling). Again, these entrepreneurs are very special.
So what are you - the chicken or the pig? Investors clearly
prefer one model over the other, not just in the founder, but in the entire
team. As a result, as you are assembling your startup team, be careful not to
In the eyes of prospective investors, you may find it's even
less kosher than hiring pigs.
*Jeff Bussgang is a former entrepreneur and partner at
Flybridge Capital Partners. This article originally appeared on his blog Seeing
Both Sides. The views expressed are his own.