![[Investor Q&A] Kent Bennett of Bessemer Venture Partners: From Hollywood to VC banner image](https://venturefizz.com/sites/default/files/kent_bennett_masthead.png)
I bet it would be hard to find another venture capitalist who previously spent time as a script writer in Hollywood. It's a true story and a career that Kent Bennett was pursuing for three years in tinseltown. Kent is a Partner at Bessemer Venture Partners and he is a very active investor having led investments in a number of Boston companies: InsightSquared, Infinio, Scratch, nToggle, Intigua, OneCloud, & Parlai. His most recent investment in Toast was announced last month.
Tell us about your background.
I grew up in Richmond, Virginia. My Dad was an attorney and my mom was a homemaker for most of my life but went back to work when I was in high school - my mom is the type of genius who can take apart any broken gadget and figure out how to fix it just by looking at it, so I had some early exposure to machines that stuck with me - the main lesson being that technology isn’t magic, you can break it down to component parts and figure out how it works as long as you don’t get electrocuted.
Growing up I always figured I’d go out of state for college, but finally my senior year, I visited the University of Virginia and realized there was an incredible and affordable school right up the road. I studied Systems Engineering because I knew I wanted to be an engineer, but that’s about as much as I knew. Systems gave me the chance to dabble in different areas of engineering like computer science, design, thermodynamics, pocket protecting, etc.
What did you do after college?
I really didn’t know what I wanted to do as graduation approached and so ended up joining Bain & Company as a Management Consultant. It was a fun place to work as a young person and exposed me to lots of different industries including some tech. Most importantly it gave me the capability to solve complex problems despite messy or missing information - basically taught me how to think in the real world. I should note that I also met my wife at Bain, so maybe “problem solving” is the second most important thing that Bain did for me...although I guess it solved the problem of me being single for most of my life until then.
Tell us about your stint in Hollywood.
I didn’t know anything about the film industry and so when I saw bad movies I always thought that I could write something better...and I had a friend who was equally naive and we just decided one day to hop in a car and drive to LA. To give you a sense of just how little we knew, when we were 200 miles away from LA we saw the sky filled with what looked like a bunch of smoke and we turned on the radio to see if there has been some sort of natural disaster. Turns out it was just smog.
We moved into a dirt cheap apartment and ate peanut butter sandwiches until we sold our first script to an independent film company. That script led to meetings and lots of other near misses, and ultimately the sale of a TV pilot to a network buyer. It was fun to get paid and not to starve, but unfortunately nothing we sold was ever produced.
I spent three years in LA and made some great friends, but the risk was undeniable and my talent was very deniable...so when my wife headed to business school I decided to tag along. My last memory of LA was a call from an agent who told me our latest script was being read by an A-list celebrity and was likely to sell for seven figures...I haven’t checked the mail today, but I’m pretty sure like most LA promises that one is still in development...
How did you get into venture capital?
I never had an interest in finance, but have always had a really strong interest in startups and new technology. One of my friends in business school had worked in VC, and as he described the job to me it sounded like the equivalent of being a Hollywood producer, only for startups where the buyer was a bit more rational than the head of a movie studio. I remember thinking it could be a good fit for my tech and creative interest, but as I did some research it became clear that VC was a very small industry with limited opportunities.
This is the part of the story that gets annoying to the many people who are more qualified than I was at the time for a job in VC and are slamming their heads against the wall on a job hunt. But just as I was starting to think about finding a job a friend from Bain who had gone on to work at BVP (my current firm) called up as they were looking to hire someone with a consumer media background. I faked my way through the interview and have been here ever since.
This was in 2008 and a few months into the job the economy was in full meltdown and we certainly weren’t doing any new consumer media investing. It felt like terrible timing, but it actually let me see what it looks like when things don’t go perfectly which every investor needs to know...and because the world stopped investing for a few months it also gave me time to figure out what venture capital actually was as I knew next to nothing when I joined.
What stage of investments do you primarily target?
At Bessemer, we are roadmap driven investors. We each find our own themes which excite us. We don’t focus on a particular stage or geography, it’s more about getting involved in an exciting market that is ripe for disruption or aggressive growth, finding the best companies who fit that theme, and then investing wherever or whenever they are.
What are the top traits that you look for in terms of investing in a founder or company?
- I like to invest in people who are obsessed with their business and are really competent. But the only way you know if they’re really competent is to look at how they have built their business. I don’t believe in “descriptive” stereotypes about the age or origin story or number of founders or any other silly pattern that may have described one success. You can tell good founders by how they’re building their companies.
- I’m always looking for some defensible edge that a company has, like a product / IP advantage or a network effect. I’m not interested in fair fights with competitors. I like unfair fights.
- Obvious but true… huge and dynamic markets are better than small static markets and markets that are 1000X larger can lead to outcomes that are 1000X better.
What sectors of technology or industries are of interest to you?
There is still a lot of innovation happening within data infrastructure - new approaches to storage, databases, analytics. Often the businesses that come out of this “big data” innovation just look like new pieces of really good software and not like “big data” companies. It turns out the end customer doesn’t want to buy “big data”, they just want to buy awesome software.
On the consumer side, I like novel consumer products and services...as long as they don’t compete too directly with Amazon! To boil what I look for down into one question, I like consumer products and services that grow even without doing paid marketing - products and services that are so awesome that customers rave to their friends. If you pass that test, and that’s a really hard test, then good things will happen. I’ve been fortunate to work with Blue Apron where we have been investors in every round and they’re a good example of an incredible consumer story in this cycle that fundamentally is all about a great product that spreads the old fashioned way. Add an amazing marketing team on top of that core product engine and the growth can be stunning.
I also have an interest in combining tech with human service to deliver awesome product experiences where tech alone falls short. Here in town I invested in Scratch which combines mobile technology with human taste to deliver a personal shopper to anyone with a smartphone. I think we could see more tech-enabled concierge businesses help address consumer pain points affordably - home ownership strikes me as an area ripe for a better consumer service offering as does travel, financial advice, and several other consumer sectors where search alone falls short.
What is the current fund that you're investing from?
Our last fund (BVP IX) was announced in February of 2015 and was $1.6B.
You're a very active investor in Boston companies such as Toast, InsightSquared, Infinio, Scratch, nToggle, Intigua, OneCloud, Parlai. What excites you about the current market in Boston?
I get excited about great founders and great companies, and we have lots of both in Boston. And what I really like is that founders and people here are focused on their company, not the startup ecosystem, not the Unicorn list, but what they are doing today to make their company successful. It may make us a bit less adept at promoting our ecosystem at times which might be a fair criticism, but pound for pound we’re building some solid businesses here and most of our energy is going into that.
What experiences have you gained as a VC that have led to your success?
I was fortunate in my early days at BVP to be invited along for the ride to watch how a couple of our great investments like Endeca and Vertica led to an exit. Since the times were different, when the capital markets were stretched and capital financing was a challenge I saw how everyone kept a cool head and figured out a way around a tricky market.
What companies outside of your portfolio do you find interesting in Boston?
Too many to mention, but a few examples:
EverTrue - the donor management / non-profit industry has legacy software issues and this is an exciting growth area they are tackling.
HourlyNerd - consulting is a massive industry, yet highly inefficient and HourlyNerd’s marketplace model is highly disruptive to a huge fraction of enterprise knowledge work.
I mentioned Toast when we first spoke, but since then we closed on an investment in them. I guess that means the other companies on this list should be on notice...
What are your greatest misses, the companies that you passed on and regret?
Also too many to mention…
I woke up in the middle of the night a few weeks back and realized that I had met the founder of StitchFix, which I believe is en route to building a massive and incredible company, when she was a student at HBS with three users. I think I actually turned to my sleeping wife and yelled “RackHabit is StitchFix!”
I have a stomach ache...let’s move on.
Who do you admire or who has been the greatest mentor for you?
Felda Hardymon is BVP’s most “senior” investor and is one of the best VCs of all time and has also taught a significant fraction of the great VCs in the world in his years as an HBS professor. I was very lucky to land on his doorstep.
Outside of being a VC, what are your personal interests or activities?
Definitely not working out. I spent almost all of my free time with my wife and two little girls. We sing and play a lot of instruments around the house and generally goof off. I’ve been asked to do a lot of ballet dancing lately with my older daughter and it’s not my sweet spot, but I’m working on it. Plus, we cook a lot of Blue Apron. One of my three year old’s first sentences was “Fennel is delicious!”
Here's a photo of my latest startup with early indoctrination of Blue Apron... the picture at the top is me with my little ballerina.
Are you involved in any charitable organizations?
I’m actively involved in a couple of organizations:
- I’m a huge fan of Year Up. They bridge the opportunity divide. It is a very selective program where they admit students from challenged backgrounds who are working in tough jobs at or below the poverty line. Year Up gives them the professional training and soft skills that you need to learn to be in the workforce. Their success rate is amazing. I’ve been working with local Boston chapter to develop a track for the startup community where they could provide professional training for sales reps or junior developers.
- The Capital Network - I’m the Chair The Capital Network. Our goal is to help early stage entrepreneurs navigate the dangers of founding and funding a business.
Keith Cline is the founder of VentureFizz. Follow him on Twitter: @kcline6.