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.
Startup Investing 101 is a web series dedicated to educating investors about the world of startup investing.
This post was written by alexandratynion on December 19, 2014
Startup Investing 101 with Charles Birnbaum of Bessemer Venture Partners