Eric Quan MBA ’14 is Managing Director and Co-Founder of Telos Ventures Capital, an early-stage venture capital fund headquartered in Silicon Valley. Telos Ventures invests globally and primarily in software-technology enabled solutions in the healthcare, education and general lifestyle sectors.
Eric recently took time to share his experience with Berkeley Innovators, including how the Berkeley Haas defining principles inform his work in the startup world.
Q. What advice would you offer students just beginning their careers in the startup world, either as founders or as early team members?
Let me get this out of the way first, but the answer to every question is people and relationships, but in an effort to not repeat myself over and over, I’ll provide alternative responses.
One of our defining principles at Berkeley Haas is Students Always, it’s no different as a founder or early team member of a startup. Typically, first-time founders are accomplished subject matter or functional experts, but entrepreneurship is a multi-disciplinary role and you will be doing a lot of things you’ve never done before. While it’s okay and even necessary to hire into specific roles like sales, finance, product management, etc. when the startup grows, the initial team and in particular the CEO needs to be able to wear many different hats at the beginning. To be able to transition into your new roles effectively, you should build a learning and developmental culture into your startup early. If you are willing to learn and work on both things you are and aren’t good at, the rest of your team and eventual employees will take your lead, which will then perpetuate itself.
Q. What have you carried from your Berkeley experience to your work in innovation/entrepreneurship?
Although I’m going to sound like the Berkeley Haas marketing department (Dean Lyons would be proud), another one of our defining principles is Question the Status Quo. Good enough never is and just because something has been done the same way for forever, it doesn’t mean that it needs to be. Berkeley has been working on redefining the business school graduate and it rubs off on us. Many companies have R&D or skunk works type departments but the best and most consistent innovators are those who build it into their culture. And I’ll let you in on a little secret, it’s not the ping pong tables, post-it notes, sleep pods and white board paint. It starts with vision and purpose and continues with hiring and developing people and a culture that thinks differently. Innovation happens when people are encouraged to fail fast to succeed sooner and in more profound ways. Don’t limit what your people can do, unleash and support them, then watch in awe as they surprise you around every turn.
Q. What is the most rewarding thing about your work with your current company?
People and relationships. I know, I know, up top I said I wouldn’t use it to answer every question, but it really does fit for this question. Yet another Berkeley Haas defining principle is Beyond Yourself. Whether your startup is a social enterprise or not, the best companies have a sense of purpose that is beyond just shipping product to their customers. With the entrepreneurs that we work with and invest in, we partner with them to serve the world. We tend to have a broader view of serving than strict social enterprises, but the heart and vision behind the products must have a purpose behind the purpose. We also work closely with the entrepreneurs themselves to build into them as people as they build their startups.
Q. What would you share about venture capital that people don’t often think about?
At times it seems like venture capital happens behind closed doors with a good bit of magic fairy dust sprinkled on top, so let me shed some light. The truth behind why things seem so secretive is that venture capital is part science, part art and a lot of instinct; sometimes we aren’t even sure why we make the decisions we make, we just go with our gut. Relationships are also highly important to us; the vast majority of meetings we take and deals we invest are referrals from trusted sources so the best way to get to us is to come through someone we know who knows us well. Also we understand what you as entrepreneurs are going though, we raise money too (at least managing directors) so we understand how difficult it is and can empathize, even though we sit on the other side of the table in negotiations, we are all after the same thing, to work on something incredible together. And finally, you pick us the same way we pick you. Having the wrong investors is worse than not having one at all; make sure your vision and values align with theirs, it’s easier to do it before you take money than after so do your research and make your best discernment of which firm (and at most firms, which partner within the firm) you want to work with.
Q. Anything other advice you’d like to offer to our student entrepreneurs?
As long as I’ve already mentioned three of the four Berkeley Haas defining objectives, it only makes sense to mention the fourth, Confidence Without Attitude. Like I’ve said all along, we are in the people business, we invest not only in the company but also and more importantly in the person. We are betting that the entrepreneurs that we back have the smarts, grit and confidence to go after big dreams. However, mere confidence isn’t enough, in fact too much confidence without a good dose of humility leads to ego and an inflated sense of self value. Truth is as much as we invest in an entrepreneur, we realize there are a lot of other factors that contribute to their success so we want to partner with people who are humble enough to realize the same thing and confident enough in who they are to bring on the right people to get it done.