David Hornik (@davidhornik) is General Partner at August Capital, a venture capital investment firm based in Menlo Park. He invests broadly in information technology companies, with a focus on enterprise application and infrastructure software and consumer facing software and services.
Premoney SF is around the corner (June 12th) and 500 caught up with speaker and August Capital General Partner, David Hornik.
Looking back on your last fund, what are your plans for going forward?
We just recently closed our latest fund, August VII. Unlike many funds going out to raise capital these days, we decided to keep the amount of money we raised relatively small. Our new fund is $450 Million and will be focused across the information technology spectrum. We will continue to search for amazing entrepreneurs who are building businesses that aim to transform a giant market or, better yet, create a giant market.
Do you think the venture capital industry today is innovative? Is there anything that needs or can be changed for us to keep momentum?
I don’t think that my investors are looking for us to be innovative. They are looking for us to invest in innovation.
What are the top value-adds that VCs provide?
I believe that my role is to provide my portfolio companies with whatever help they need. Sometimes they need help recruiting great people to join them. Sometimes they need help raising capital. Sometimes they need help thinking through organizational structures or strategy or product. Sometimes they need us to be true believers and continue to back them even when others will not. Whatever my portfolio CEOs need, I’m there to help!
How are you building a different kind of VC firm?
We are building a different kind of VC firm at August Capital by not building a different kind of VC firm. We don’t think that entrepreneurs are looking for different. They are looking for engaged and thoughtful and helpful. They are looking for personalized attention and a deep knowledge of company building. We have always provided that and will continue to do so.
Are there common characteristics of someone who is a successful VC? Do you have any examples of people who you think are really pushing the envelope in the industry?
There are a million traits of a great VC, but the one I think is often times the most compelling is to be intellectual curious. If you aren’t naturally curious, you will have a hard time finding the motivation to sift through thousands of companies in order to find the one amazing company you are excited to fund.
How has the VC business changed since you joined August Capital?
There has been a lot of noise in the 15 years that I’ve been in the venture business. But, fundamentally, the VC business hasn’t changed at all.
You called your fund August Capital because at the time no one would fund anyone in August. Does that still hold true today or is the funding environment so hot there’s currently no “off-season”?
That is definitely not why we called the firm August Capital but I think that’s a great piece of lore. That said, I don’t think that there has ever truly been a down time in the venture business. Great VCs are always looking for amazing companies and that doesn’t stop in August.
Recently you commented on Twitter that today some companies are trading big valuations for not so great terms. Can you elaborate more on that or tell us how founders can balance the two?
There have been a number of high priced rounds of late in which VCs are willing to pay extremely high prices in exchange for having a multiple preference or some sort of ratchet that readjusts ownership if things don’t continue up and to the right, etc. I think the best way that companies can balance these sorts of financings is to just say “no.” Companies are way better off taking a reasonable valuation without the structure, than taking the highest possible bid with a ton of preference, etc.
What advice would you offer to founder who is looking to raise capital for their new startup?
Recruit great people. Surround yourself by great people. Get introduced to the VCs by someone they know.
You’re one of the few VCs in Silicon Valley who doesn’t dress horribly boring. Can you tell us about some of your style and favorite loud shirts?
For the longest time I wore a different bowling shirt every day. I’m a fan of the bowling shirt and had fun with it. Then one day my wife informed me that the era of the bowling shirt had passed and that I had to move on. I was at a bit of a loss for a while there but have migrated my way to lots of paisley and bright colors.
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To hear more insights from August Capital & others, join us at the PreMoney conference on Jun. 12, 2015. Visit PreMoney.co and enter promo code ‘AugustCapital’ to score an additional $150 off the registration price.