Taylor Greene joined Collaborative Fund earlier this year. He was previously a partner at Lerer Hippeau Ventures. We recently asked him six questions:
1. What aren’t we talking enough about?
I think we should be talking more about rising student debt. The average student debt climbed 6% last year alone to $39K. In aggregate, that’s $1.5T in loans that has grown 4x over the past 10 years, with 1 in 10 borrowers defaulting within the first three years! So we’ve been looking to invest in companies that help solve this problem - our very first of them being NextGenVest, which helps students tap into scholarships in a scalable way.
2. What have you changed your mind about in the last few years?
Cryptocurrencies. I’d like to say that I was on the crypto train from day zero, but admittedly I was a bitcoin skeptic at first. I first learned about it in 2013 and thought it was intriguing, but it took me two and a half years to begin to understand its potential and become a believer.
3. You use to work on the operations side of businesses. What do operators not get about VC, and what does VC not get about operators?
I think there are a lot of operators who take a while to realize that once a VC invests in their company, all parties are very much aligned. Those that realize this alignment early on end up having a fluid and transparent relationship with their investors, which enables the investors to be more helpful board members and advocates. For those founders that hold back, it can make life a little more difficult down the road in future financings if existing investors don’t feel there is a high level of transparency with the founder. That said, I do think the onus is on the investor to establish trust with founders early on, so in no way do I think this is solely a founder issue.
4. What’s a common piece of investing wisdom you disagree with?
I don’t think markets are actually efficient. While modern portfolio theory suggests you can’t outperform the market because markets are perfectly efficient, I think the reality is that not everyone has access to the same relevant information (which enables some investors to systematically outperform the market) and implicit, deeply ingrained behavioral biases exist (which causes many investors to underperform). It’s a little bit of a skeptical point of view, so I like to think a lot about whether it’s possible to correct for these two issues and how that would happen.
5. What do entrepreneurs put in pitch decks, or say at meetings, that they think impresses you but you shake your head at?
One common thing I see founders latching on to is using analogies to explain their business rather than just explaining what their business does. For example, some describe their business as “This” for “That”, think “Uber for Dry Cleaning” instead of “On Demand Dry Cleaning.”
I think analogies can be helpful if an investor is not immediately grasping the business concept. But it’s even more helpful to strip the company down to its simplest form and spell it out that way first.
6. What would you be doing if you weren’t in VC?
Easy. I would be back on the operating side at a startup. I love startups that have the ability to transform large markets, and I’m a bit addicted to the adrenaline rush those provide.