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Learn what makes General Catalyst special among venture firms and drives their top quartile returns.
Key Takeaways
- Hemant Taneja, managing partner at General Catalyst, describes what sets GC apart from other VC firms
- GC's strong values make founders want to work with the firm - even those who share failures with the team come back and work with them in some capacity again
- People are a cornerstone of their investment strategy. A great team, assessed by the choices they've made to get to where they are, is the key to a great investment
- They also invest thematically, concentrating on sectors they believe will be disruptive and life-changing in the long term. Despite their size, they take concentrated bets in these areas (like healthcare and fintech).
Transcript
Hi, I'm Hemant Tenaja and I'm the managing partner at General Catalyst. We want to do true venture capital, which is team up with folks that have the courage and conviction to take a problem on and go at it. Our mission is to invest in positive, powerful change that ensures our values, our diversity of thought, creativity of approach, depth of relationship, mindfulness of impact and generosity of spirit. Those are the things that define the work that we do, everybody at the firm, the growth mindset that we instill in the firm - it's all driven by those values. I think the value system I just laid out is the secret to what makes the firm succeed.
And I will say one thing I take a lot of pride in is the firm really does right by its founders and in this business to sort of do this for 20 years, you can't pretend to do that. You either are that and your reputation compounds that way or you're not that and your reputation compounds the other way. And so I think sort of the fact that our founders come back and work with us, the fact that even the ones that we shared failures with are working with us, usually in some capacity - that echoes in the echo chamber of the sort of founder diaspora. And for us, it's all about great founders choosing to work with us.
I think the greatest signal is in the people that are building the company. And the way you assess that signal is by seeing what they've learned, why they're doing, what they're doing and the choices they've made to get to to you. So the signal isn't in the presentation that they give you. It's in the right order to get there. I think the rationale behind those choices is really important, how they learn from the customers, how this sequence which risks they want to mitigate their ability to be convicted and yet flexible in their thought process. You can challenge them and they process everything, but they ultimately do what they're convicted about. Those are the kinds of things we really want to assess.
So I have an appetite for risk. What I don't take a risk on is, again, the people. I think beyond that, I'll go take on anything almost as long as the principles on which that company is being built are aligned with our values. And what I think is in the interests of society long term from a day to day execution perspective. One of the reasons we have been able to invest in so many market leaders in the firm has been because we do approach each sector thematically. In health care we've got a thesis, we've got a similar thesis, similar approach and a thematic mindset to fintech and what's going on and civic infrastructure or sort of traditional enterprise and consumer. And so I think that important point of view and the fact that we deeply sort of think through which companies will be on the right side of history versus being a very high volume investor has worked for us.
We're a very large investment platform at this point, but we do very concentrated work. We don't go invest in everything. We really focus on what are the types of companies that can truly be category winners. We measure ourselves on that. I think ultimately that's the driver of returns.
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