Heidi Roizen, Entrepreneur and Venture Capitalist
Today, my guest is Heidi Roizen, an Operating Partner with the venture capital firm Draper Fisher Jurvetson (DFJ) where she provides strategic advice to the firm's portfolio companies, manages the internal services team and helps to identify new investment opportunities.
Heidi was the co-founder and CEO of T/Maker Company, a developer and publisher of consumer software, which was acquired by Deluxe Corporation in 1994. Heidi has also been the VP of World Wide Developer Relations for Apple Computer and Managing Director of Mobius Venture Capital.
She currently co-leads the Entrepreneurial Leaders Fellowship program in the Stanford Technology Ventures Group and is on the board of DMGT (LSE:DMGT), Zoox and ShareThis. Heidi holds an undergraduate degree from Stanford University (1980) and an MBA from the Stanford Graduate School of Business (1983).
In this candid conversation, Heidi shared the real stories behind the crucial traits of successful founders, the intense realities of venture capital relationships, and the two biggest mistakes entrepreneurs constantly make.
1. The Tenacity and Flexibility Balance. Heidi revealed that the most vital trait for any entrepreneur is tenacity, as they must be able to endure massive stress and constantly pick themselves up after inevitable failures. However, she noted this must be carefully balanced with flexibility—the ability to act like a sponge for feedback and accurately decide which data should prompt a pivot and which should be ignored.
2. The Eight-Year Marriage. Comparing the relationship between a founder and a venture capitalist to a marriage, Heidi pointed out that both average about eight years in length, but unlike a marriage, it is incredibly difficult to divorce your VC. Because of this long-term commitment, she strongly advises founders to conduct thorough reference checks on their potential investors, specifically asking to speak with entrepreneurs whose companies actually failed under that VC's guidance.
3. Grandparents vs. Parents. Having spent roughly equal amounts of time as both a CEO and a VC, Heidi definitively stated that being an entrepreneur is a vastly harder job, noting that a VC's absolute hardest day is equivalent to a founder's average day. She likened her current venture capital role to being a grandparent rather than a parent; while she helps manage a portfolio of companies and rushes to aid whichever one is currently "bleeding," she ultimately understands it is the entrepreneur's "baby" to raise and drive forward.
4. The Delusion of Time and Perfection. When identifying the two biggest mistakes founders consistently make, Heidi stated that entrepreneurs inherently assume everything in their business plan will go perfectly right, even though every financial model is guaranteed to be wrong in some direction. Secondly, she noted that naturally optimistic founders always believe they have far more time than they actually do, frequently "playing out the clock" and running completely out of runway before securing their next round of funding.
