As a venture capitalist, I often find that a casual conversation with a friend or acquaintance morphs into a business pitch. After the inevitable question--"Is that the type of thing your company would fund?"--I habitually dive into the standard lecture about how VC firms invest in businesses, not ideas. After all, ideas are really the easy part of a startup; what we care about is the ability to execute.
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Knowing that the majority of people who make these impromptu pitches will never do anything with their ideas, my stock response is a convenient way to avoid saying that their dream stinks, and that I'd really rather talk about sports.
In retrospect, however, I've realized that some of these pitches were actually pretty good. So I began to ponder the wisdom of the quick blow-off. As I see it, my problem in these cases is not the idea itself, but the person making the pitch. I could be hearing about the next Google, but if it's coming from a guy I remember doing keg stands in college, it's hard to envision it succeeding.
So if the idea is 5 percent of the battle, and execution is the rest, the natural question is: Why do venture capitalists spend 95 percent of their time reviewing business plans rather than résumés?
I'll be honest: The notion that VCs can just sift through a stack of business plans and pick the best ones to fund is a pipe dream. Slowly, my industry is waking up to this reality. Venture capital is all about mitigating risk, and if the majority of that risk lies in execution--as I tell my lazy college buddies at the bar--it should come as no surprise that VCs are shifting to a more people-centric model. The team at the newly formed Redstar Ventures out of Cambridge, Mass., for instance, claims to have a completely top-down approach to investing: They identify major problems or opportunities in the market, then go out and find people to solve them, while providing capital along the way.
A hybrid of Redstar's approach is now common with many VC firms that have begun recruiting people to generate ideas or maintain a stable of proven talent who can cherry-pick pitches and deals and run with them.
Now, I'm not saying you need to work at a VC firm to land funding these days. What I mean is that you may have the greatest idea of the decade, but if you don't have the track record to build a company to execute it, consider partnering with someone who does. It could mean the difference between scoring a meeting with an investor or being shut down immediately and asked about last night's football game instead.
This post originally appeared at Entrepreneur. Copyright 2013.
Sam Hogg is a venture partner with Open Prairie Ventures, a Midwest-based venture-capital fund investing in agriculture, life-science and information technology.