David B. Lerner

Dave Lerner, 3x Entrepreneur, Angel Investor, Host of Venture Studio
Entrepreneur, Angel Investor, Director of Columbia University Venture Lab, Blogger, Community Organizer, Golfer-in-Exile.

The Ideal Venture Capitalist: Top Ten Reasons Sherlock Holmes Fits the Bill

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This is part of my Series on Venture Capital.

If you’re in the mood for a really enjoyable film I recommend you see Guy Ritchie's Sherlock Holmes. In it he uses the latest movie-making technologies to literally bring-to-life 19th century London in all its dark immensity and brooding menace- from the elegant halls of parliament to the ornate rooms of masonic temples to the labyrinthine sewers beneath the city. The sets and staging in and of themselves are a masterpiece and are simply breathtaking. I think the production designer should be nominated for yet another Academy Award.

For the Sherlock Holmes aficionados out there, I’ll also venture to say that Robert J. Downey, Jr. is terrific in this latest incarnation of the great sleuth. He brings an athleticism and playfulness to the role that is a fresh twist to any cinematic adaptation I have seen. I have an inkling that his performance would bring a smile to the face of the venerable Basil Rathbone and perhaps even to that of the great Holmesian master, Jeremy Brett himself, were they still living.

I too came to this film with a sensibility that I did not have when I first encountered Holmes as a young boy reading Conan Doyle. I was of course neither an entrepreneur or an early-stage investor back then. Not surprisingly, this time, soon after leaving the theater something I had never considered before really hit me. I was struck by the realization that Sherlock would have made an amazing venture capitalist! "What a perfectly silly notion my dear Watson!", he would no doubt have replied.  But I would have to insist and say that VC's and Angel Investors young and old would do well to emulate some of Sherlock’s best qualities. Here they are as I see them: 

1)    Complete and Utter Attention to his Clients:

When he meets with someone, his total absorption in their presence is legendary. (He would, for example, never dare distractedly glance through his mail when receiving a guest- as many a VC are criticized for doing via their blackberrys).  He also is incredibly respectful and courteous to his clients, always responding to their telegrams promptly. 

2)    Immensely Perceptive and Observant:

LP’s looking for capital efficient managers take heed! Forget about your GP’s spending money to perform diligence on entrepreneurs. With Sherlock as the Managing Director, he can tell you a person’s entire story and background after the first meeting! He takes the meaning of due diligence to another level entirely.

3)    He’s a World-Travelled, Experienced Entrepreneur Himself:

Worried (as Hoegaerden is) about “sub-prime VC’s”? Holmes is no newly-minted, blue-blazered-stiff-of-an-MBA just off the VC conveyor belt with no life-experience. He’s traveled the world, has enormous wisdom and runs the 19th century equivalent of a garage start-up consultancy with Dr. Watson.

4)    Massive Intellectual Curiosity, Great Erudition:

Here’s a VC who doesn’t rest on his laurels and past accomplishments. He is constantly learning, reading, studying and staying abreast of new trends, the news, the latest technologies. He is the first Western martial artist, a naturalist, an amateur chemist par-excellence and an early adopter of the newest technologies and techniques available.

5)    Loves the Big Idea, Huge Risk-Taker & Admires Disruption:

Here’s a true innovator not content with following the herd and investing in the latest incremental fad. He himself is disrupting the law enforcement industry with his own super-lean startup! The bungling bureaucracy of Scotland Yard and Inspector Lestrade are no match for Holmes’ home-grown operation with a staff of two, (three if you include his landlady, Mrs. Hudson).  He’s confident and capable enough to trust his own vision and therefore is ready to tackle the biggest, toughest, most elusive problems in the marketplace!

6)    Great Mentor, Coach and Board Member:

He leads by example, has intelligently advised innumerable clients and has helped Watson hone his now considerable skills as a crime-stopper. He anticipates events, predicts how people will react and has a keen sense of danger. Such a mentor could help any entrepreneur with the sales, marketing and hiring process, not to mention with the design of an effective strategic plan. He would make a great Board Member.

7)    Great Ear for the Customer:

When it comes to understanding the views of the man on the street, no one is better than Holmes. He’s as comfortable in the elegant drawing rooms of 221B Baker Street as he is on the vilest lanes of London, has roughed it in disguise many a time and is known to have eyes and ears throughout the city. He has no allegiance to class, no patience for pomposity and judges a person on their individual merits.

8)    Driven with Enormous Energy:

Here’s a guy who loves his job, pulls all-nighters regularly and will take almost any meeting. He’s relentless and ultra-determined when trying to solve a problem and this is infectious to the entrepreneurs he funds and advises.

9)    High Standards & Innate Sense of What is Right:

Holmes is always very exacting of Watson and those around him, but never more than he is on himself. He takes on each engagement with an enormous sense of purpose and sense of what is inherently right. As many have said, he has his own sense of justice that is at times distinct from the rather blunt and un-nuanced version often displayed by his lemming-like colleagues at Scotland Yard.  A loyal teammate with an unfailing moral compass, he is an enormous asset to the companies in which he invests.

10) Sense of Humor:

Lastly, as Robert Downey Jr. exemplifies so well in the film, Sherlock has a terrific sense of fun and playfulness and mischief- rarely taking himself too seriously. It is always disarming and endears him to Watson and many of his clients.  He is respectful and yet irreverent all at once.  


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Nice job. I especially like the second point about due diligence. No Canopy Financial fiascoes for Sherlock Holmes!

Thanks Mark. I'm re-reading the old Sherlock Holmes stories lately and the guy is super-talented...

I like it! If Sherlock = awesome VC; what does that make Watson?

David, really liked your article. How he solves a problem by noticing when a dog doesn't bark supports your second point. Look forward to following your blog in 2010. Cheers

He was a wounded vet recuperating from wounds suffered during the Afghan war when Holmes met him. He started with Holmes as an apprentice really- I guess we'd call the position "intern" nowadays. I think over time he became a full partner at the firm.

I can tell you're a real aficionado.... terrific point- sometimes he draws great feedback from what is not said...
thanks a lot Aled...

Definitely. Haven't read the stories in a while, although I do still remember some of the titles,like the Hound of the Baskervilles and the Red Headed League. Just added you to my blogroll as well!

red-headed league- now that sounds like a group that I could join! hey thanks a lot...

David, I appreciated your idea of Holmes moving from Baker Street to Sandy Hill Road. The solution to many a crime came from his ability to either avoid or overlook his own prejudices and preconceived notions and focus upon the facts. A good lesson for any VC.

Yes- excellent point- I had not considered that aspect. Bravo Andrew.

David, A good article and I like the way you compared Sherlock Holmes traits with a smart and an ideal VC, but as you know its always hard to find an "Ideal VC". However, their are some good and highly regarded ones like Vinod Khosla (Khosla Ventures), John Doerr (Kleiner Perkins), Bob Nelsen (Arch Venture Partners), Terry Mcguire (Polaris Venture Partners).

Thanks Aditya... yes, certainly it is a myth, but these are qualities that I admire greatly in investors... appreciate your thoughts...

Awesome article! Paints nice pictures – I think I will come here next time, it is really good!

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