The Twenty Minute VC: Emily Melton, Partner @ DFJ

Why investors should be ary of investing from patterns

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Adam Marx@adammarx13 · Freelance writer/editor and music addict
Love hearing @DFJvc Emily Melton on @twentyminutevc with @HarryStebbings as a follow-up to the episode with @dfjjosh. Part of what struck me from the beginning is her story of how she ended up in venture capital in the first place; without giving too much away, suffice to say that her concept of being a "reluctant venture capitalist" is equal parts entertaining and disarming. It's this sort of ease of character which founders really look for (or should be looking for) when assessing possible VC partnerships. Particularly important discussion on pattern matching, and how founders sometimes go overboard in their simplification (i.e. "Uber for X"). It's important to rethink opportunities, and address the argument of "why now?" with an answer or vision which may articulate changes in the market or new trends in an industry. Rather, the pattern matching is much more useful when examining how a company is building within to capture a new opportunity. Perhaps one of the most important discussion points Emily touches on is how VC's identify new founder talent. Her identification of what diversity means is especially compelling as she touches on the notion of pedigree and what's considered "safe" in terms of founder funding. This also rolls over into the "why" of a founder's drive, not just the "what" of what they're building. Fantastic episode, great way to open the weekend. :)
Harry Stebbings
Maker
@harrystebbings · Podcast Host @ The Twenty Minute VC
Emily Melton is partner at @DFJvc, where she focuses on consumer and mobile technology, as well as healthcare technologies and marketplaces. Emily has made investments in the likes of BetterUp, Elation Health, Livongo, Redfin, Shift, and Wellframe. Early in Emily's career, she sourced investments in Box (NYSE: BOX), Meebo (Google), Kudo (Google), RichRelevance, and Flux (MTV Networks). She was also an advisor to Pulse Network (LinkedIn), Healthtap, and @Poshmark. Huge thanks to @jennylefcourt and @karanortman for the intro to Emily today! In Today’s Episode You Will Learn: 1.) How Emily made her way into the wonderful world of VC following her meeting with Tim Draper? 2.) How does Emily view the importance of pattern recognition? Why does Emily believe that you should not invest from patterns? What is the difference between a pattern and an investing fad? 3.) Why does Emily hate analogies? Why does she believe it is simplistic thinking? How can this be mitigated for startup founders in describing their company? 4.) How does Emily view the portfolio approach to risk in venture? What questions need to be asked to determine the potential outcome of the business? 5.) Why does Emily get concerned by the rise of the 'celebrity investor'? How can investors build their brand in the proliferated world of early stage startup investing? Items Mentioned In Today’s Show: Emily’s Fave Book: Mindset by Carol Dweck, A Theory of Justice by John Rawls Emily’s Most Recent Investment: @BetterUp