Masterspeak 2017

"You want to see a business model that makes sense now; it is hard to change later on"

Former fighter pilot Paul Madera of Meritech Capital Partners on what works and what doesn’t when it comes to start-ups

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Published 4 years ago on Sep 01, 2017 23 minutes Read
Photographs by N Mahalakshmi

Palo Alto/ July 12, 2017

Coming from a military family, it was clear to Paul Madera in the 8th grade that he wanted to become an Air Force pilot — he has flying high ever since. In the world of venture capital, Madera is the quintessential outsider and Meritech Capital of which he is a co-founder must be the leanest firm in Silicon Valley despite its multi-billion dollar book. Till recently it had only six partners and it just hired its first non-partner. When Madera entered the business in 1999, it was a great time to raise money but a terrible time to invest as the events unfolding in 2000 would prove. Madera has put the learning to good use and has made many successful investments, the most famous being that in Salesforce and Facebook. He is still a big believer in Facebook and holds it in his personal portfolio. The sage-like Madera is a regular on the Forbes Midas List but has deliberately stayed low profile in his quest to find great late-stage investments.

Let’s begin with your career switch — from being a fighter pilot to eventually becoming a venture capitalist.

It’s been an interesting journey. During my stint in the Air Force, I did some really interesting things, like being one of the earliest guys to fly the F-16. Though I did everything right through the Air Force, I saw myself doing much of the same thing over the next ten years. Since I was single, it was easier to make big decisions. So, I decided to apply to Business School, though I didn’t really know what a B-School was. Since my family had been in the military, I didn’t really know much about people in business either. But I thought, if I get into a good B-School, I will go for it. One night, I wrote applications to three B-Schools and my application got accepted by Stanford. I learnt a lot about business at Stanford. Then, of course, I headed to New York to start out with an investment bank. At the time, investment banking was, perhaps, the most prestigious thing a B-School grad could do. It’s certainly not that way today! Investment banking turned out to be very interesting for me, particularly engaging with smaller companies. And then that one little window gave me a chance to move out into the venture world. 

Are there any personal attributes and characteristics that you imbibe

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