We sat down with Charles Birnbaum, Senior Associate at Bessemer Venture Partners, to discuss investment philosophy, due diligence, and portfolio diversification.
What is your investment philosophy?
- Be thorough in investigating companies before investing
- Don’t invest in competitors
- Support companies through multiple rounds of funding
What do you look for in a team?
- A team must be doing it for the right reasons
- They should know how to build a culture
- Look for a team that knows how to sell
- A group should complement each other
- Look for a team that has worked together in the past
What do you think about competition in a given sector?
- A market is often big enough for multiple competitors
- Understand the competition before investing in a company
“The hardest thing about investing is you can only make a few bets. It’s more of a time constraint than it is a capital constraint.”
How do you perform due diligence?
- Complete due diligence before extending a term sheet
- Do reference checks on team members
- Talk to customers
- Look for positive market signals
How do you diversify your portfolio?
- Invest in different sectors
- Invest in different stages
What advice do you have for those in VC?
- You can only make a few bets
- Be direct with entrepreneur
- Look for opportunities in an area you’re passionate about
Charles Birnbaum joined Bessemer in 2013 and is a Senior Associate in the New York office. He focuses on investments in the mobile & communications, financial services, and consumer web sectors. Prior to joining Bessemer, Charles spent three years at Foursquare, a location-based mobile application company based in NYC. As an early member of the Foursquare team, Charles helped create and bring to market some of Foursquare’s first merchant-facing tools. He then became Director of Mobile & International Business Development focusing on carrier, OEM, and strategic partnerships and led the company’s business development efforts in key growth markets such as Brazil, Russia and Turkey.
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This post was written by Alexandra Tynion on December 19, 2014