Last weekend, my daughter, 7 years old, had to prepare an interview with one of her parents about their job. She chose me, lucky her - I am a venture capitalist. Explaining what a venture capitalist does to most people is not an easy task to start with...imagine what it's like for a 7 years old.
It would have been much easier with my husband who is in the retail business. You buy things and you sell them and make money in between. So for the first time, I really tried to explain in simple terms what we do. Here is what her transcript looked like:
"My mother is a venture capitalist. She meets people that have ideas for software, like Word and games and Barbie.com. She then chooses the one she thinks are good and gives them money (I don’t like the give part, but invest seems to be a very strange concept for her). Then those people work on their idea, mostly writing on the computer. When they sell their idea and receive money, they give it to my mother. That’s it."
Sounds very simple, doesn’t it? Of course, we did not get into details like ownership, Limited Partnerships, value creation, liquidity constraints and patents etc. But she got the basis of it. It is all about great ideas and great people.