Meet the man who revolutionized venture capital through blogging

BY MATTHEW HUTCHINS

David Hornick

After graduating from Harvard Law School, David Hornik ’94 went on to work at Cravath, Swaine & Moore before clerking for Judge Altimori at the Second Circuit. He returned to Cravath before eventually leaving in 1997 to join Venture Law Group, a start-up boutique in Silicon Valley. From there he helped start Perkins Coie’s Bay Area practice and, a decade ago, Hornik joined August Capital to himself become a venture capitalist, financing start-ups as an investor. Hornik returned to HLS this spring to teach a course in Entrepreneurship and Company Creation, and he sat down with the Harvard Law Record to speak about his career and the tech industry.

What took you to Venture Law Group after having worked at Cravath, and how did the experience working with start-ups get you excited about venture capital?

Cravath is in many ways the epitome of the establishment, a firm that represents some of the biggest and most well established corporations in the world. It’s reflected in the attire: you wear — your dark suit, every day, even if it’s just to hang up your coat on the back of the door.

I went to Venture Law Group in 1997 when the internet was exploding. There was a huge amount of energy and activity in the start-up world, and Venture Law Group was only representing start-ups.

One of the reasons I left Cravath and went to VLG was that friends of mine from Stanford undergrad were the guys who started Yahoo!, and they were being represented by the lawyers at VLG. It seemed to me that what they were doing was incredibly interesting and that the opportunity to work with Yahoo as their counsel was also incredibly interesting. In retrospect, maybe the thing I should have done was go and work with them, but it worked out fine. I became corporate counsel to a number of really interesting start-ups, all in the Internet space, and that really got me addicted to this idea that company building and start-ups are fascinating and really fun.

What I discovered was that working with startups was exhilarating. I loved representing them and talking to them about their business and the ways I could be helpful to them — not just as a counselor and in their legal issues, but ways in which I could be helpful in company building. I had the opportunity to ask, “have you thought about these things?” and “maybe you should do this?” We would engage in this back and forth about how they were thinking about building their business.

Some of the fun was in answering questions about how do you structure a company if you are engaging in a certain relationship. I remember very clearly once when a client and I were negotiating with a guy who was essentially Steve Jobs’ right hand man at Apple. The conversation was fascinating, because when it came time to discuss what the “look and feel” of this particular joint venture was going to be, we were told that Apple would get final say, period. I argued that we had never agree with that and so on, but the answer came back that, “No, no, Steve gets final say on how these things look. Period.” That was an incredibly interesting moment. It was like, do you want to push this, or do you want to get a business relationship done. So we agreed to it. In our minds, it was the Steve Jobs clause.

What were your goals when you created Venture Blog?

When I started Venture Blog there were no other venture capital blogs. Now there are literally hundreds of VC’s who are blogging. You look at it now and you say, “I get it. There is this opportunity to discuss things that are interesting and hopefully engage in a conversation with other people who find these things interesting.” But when I started blogging there were no investors talking about the venture capital process, so it was an interesting challenge. To a certain extent, the venture business was seen as this black box, and you weren’t supposed to talk about the things that you did as a VC. You weren’t supposed to talk about your thought process, because it was viewed as this tightly kept secret.

As I sat there as a VC it struck me that none of what we were doing was particularly secretive. This wasn’t the recipe for Coke. It was, “I want to hear from really smart entrepreneurs about what they are working on, and if it is sufficiently compelling, then I want to give them money.” It struck me that there was no good reason why I wouldn’t start this discussion. There are certainly some things that I don’t discuss, things about the companies I have invested in and conversations with my partners that I would be silly to talk about. But that is only because those particular things are private; their value is in the fact that they aren’t shared.

I wrote about “what is it that Venture capitalists expect in a presentation?” It doesn’t seem like that should be a puzzle. I want to actually find out about your company, and so I should tell you the things that are important and interesting to me, so that when you present your company, you tell me about the things that matter.

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