What makes a great VC?

I get asked this all the time.

Let me start by giving my definition of a great venture capitalist.

At the end of the day it’s someone who generates significant (actual) returns on invested capital, treats founders with care and respect, learns from their mistakes and is a pleasure to work with (works hard, committed to a portfolio company) and can do this work at this level over a long period of time.

My partner Santo is a good example. He led a number of Series A investments resulting in outsized winners (i.e. over 9 figures in proceeds) in each of our first three funds. The fourth fund is still early but I’ve seen his work and I have little doubt he will keep the streak going. And he treats founders directly and fairly. He has now backed 4 founders in this fund that he backed previously. And we are talking to another one right now.

There are plenty of great VCs by my definition above in other firms worth highlighting. Without a doubt that list includes Fred Wilson, Brad Feld, Josh Kopelman, Bill Gurley, and Mary Meeker. I should probably stop naming names because I’ll inevitably forget someone (but one thing for sure: any list that doesn’t factor in actual returns or cost basis isn’t useful).

So what are the common characteristics of these VCs?

Well here’s my take: it’s not necessarily someone with direct startup experience. Its not gender. It’s not where you went to school. It’s not pre-venture success. It’s not operating experience. It’s not where you were born and it’s not where you live.

My own observation is its more about endless curiosity, a passion for learning, a rigorous work ethic, an ability to connect and inspire, empathy, patience, and a natural ability to believe what others don’t – and of course some good luck along the way.