Last March Startup Grind Tel- Aviv hosted Rona Segev Gal, a successful entrepreneur that became a very successful venture capitalist. As a Founding Partner of TLV Partners, Rona has a unique investment philosophy which focuses on helping entrepreneurs in very tangible ways and focusing on building long-term partnerships and relationships.
Rona's Investment Philosophy:
Learn from entrepreneurs:
I am fortunate that the brightest entrepreneurs in Israel are willing to come and educate me on new markets and trends. I’ve found that the best way to remain up to speed with the latest technologies and market opportunities is from entrepreneurs themselves. So I make a point to ask a lot of questions in meetings, as I will never know as much about an industry as an entrepreneur who operates in it on a day-to-day basis.
Build long-term partnerships:
At the end of the day, the number one goal of both the entrepreneur and investor is that the company succeed. And the best way to achieve success is to align interests and create a healthy partnership. Any short-term optimization by either party may become destructive in the future.
Fund companies properly:
Several years ago after the completion of my most recent investment at the time, the entrepreneur told me that I had given him just enough money to hang himself. Since then I've made it a priority to properly fund entrepreneurs. There’s no way around it: sufficient capital is required in order to build long-standing, revenue-generating companies.
Don't tell them what they need:
Instead ask entrepreneurs how can you help them - the answer may surprise you. For example, at TLV Partners we have spent 20 percent of our time recruiting talent for our portfolio companies. We also spend a lot of time making introductions to potential partners and customers. There is no cookie-cutter template for assisting entrepreneurs. Each company has their own needs and it’s important that you take the time to understand their specific needs to be as helpful as possible.
Develop a culture of cooperation between portfolio companies:
Our portfolio companies often collaborate, consult and share knowledge with one another. This sense of community is very helpful for them.
Be transparent and work quickly:
At the root of every healthy relationship lies honesty and transparency. And just as we expect our entrepreneurs to be forthcoming and fully transparent with us, we strive to act accordingly towards our entrepreneurs. I try to be as to the point as possible, and often tell entrepreneurs whether I’m interested in continuing the discussion in the first meeting. We focus our DD only on issues that we believe the DD process will shed light on, we avoid asking questions that no one has the answer to.
Never compromise on people:
For us, every investment is the beginning of a journey with unexpected turns and obstacles, one that we would never set out to without feeling fully confident in our partners. We like working with outstandingly bright people, but as important, we like to work with people that we trust.
Entrepreneurs, not VCs, build great companies:
When we invest in a group of founders, our sole focus is to make sure that the group as a whole will grow and excel. We do not believe in replacing founders. Experience taught us that replacing founders dramatically reduce the chances of success.
A focused fund is better:
We believe that investing in 12-15 startups per fund as opposed to 20-25 is better. This allows us to give more of our attention to each company, as well as have a substantial amount of capital set aside for each company for follow-on financings.
Advice for Entrepreneurs:
Being afraid is ok:
I have made many brave decisions in my life but I was always afraid. Don’t let fear hold you back or drive your decisions.
VCs are not just sources of capital:
Agreeing to an investment from a VC is the beginning of a 7-10 year partnership. It is important that you know who you are partnering with and feel comfortable with them.
Before a meeting with an investor, do some homework. What investments have they made, what type of culture do they preach and what is their background.
- Stay away from buzzwords
- Scaling is always painful
- Always keep learning
- Don’t react bitterly to negative feedback
- What I value most in an entrepreneur: flexibility, focus, talent, and vision
Rona became a CEO at the age of 24 and sold her company at 27 while she was pregnant with twins. "As a former entrepreneur and a young mother, I felt I had no skill set and that no one would hire me." She shared with a big smile that she first took a job as a VC because it seemed like "a lazy job... a nice break from entrepreneurship."
In 2000 Rona became a partner at Evergreen Partners, moved to Pitango in 2005 and founded TLV Partners in 2015. She has invested in numerous successful companies, including Varonis (VRNS, Nasdaq), Skycure (Acquired by Symantec), Traiana (Acquired by Icap), Worklight (Acquired by IBM) and many more.
Rona Segev (TLV Partners)