The Deal
The author dealing up a big day in the North Fork of the Jordan River, CMH Revelstoke. Photo by Topher Donahue
At Boulder Ventures, we love the Grateful Dead and listen to them all the time. Jerry Garcia was a great entrepreneur who understood the economics of the music business in the digital age long before anyone else.
Like most great entrepreneurs we’ve known, Jerry didn’t give a shit about money and status. He cared about his band and their music, and he was motivated by the creative process. Jerry didn’t care about being a Rock Star either, but more than any other group of his era, the Grateful Dead made its audience part of the act.
As a result, Jerry created a strong following among his fans, who then organized themselves into a community, which then enabled the Grateful Dead to play dozens of shows a year to sold-out audiences largely comprised of the same people. As the CEO of the Dead, Jerry recognized that this recurring revenue model was more fun and far more profitable than selling a single studio album a single time to a single fan.
Impressively, Jerry Garcia also understood how to conduct himself in a transaction once he had a seat at the table:
Since it cost a lot to win
And even more to lose
You and me bound to spend some time
Wondering what to choose
It goes to show you don't ever know
Watch each card you play
And play it slow
Wait until your deal come round
Don't you let that deal go down
I been gambling hereabouts
For ten good solid years
If I told you all that went down
It would burn off both your ears
A seat at the venture capital table is expensive, but it’s nothing compared to the cost of getting schooled in a high-flying, capital intensive startup. The streets of Boulder are littered with guys that thought they had a winner, only to get crushed by luck, timing, bad management, or all three.
No one ever lost their VC job because of the deal they didn’t do - it pays to take your time, ask a lot of questions, and work hard on your authentic relationships before committing capital. Even then, the big winners leave you shaking your head - you don’t ever know for sure what’s going to work.
It takes a minimum of a decade of effort before you find out if you’re any good, as a founder or as a VC. Jerry was good, and went for thirty five years with the Grateful Dead before he died of too much fun in 1995.
I’ve been gambling hereabouts for thirty five years also, working on The Deal. I’m not even close to done…