That’s not something I take lightly.

For the past four and a half years, I have worked at the family office of one of the most iconic entrepreneurs on the planet: Sir Richard Branson (“SRB” for short).

Here are some refletions.

A good stint

It is true that SRB can be a divisive figure, particularly in the UK. But while I have only met ‘the man himself’ on a couple of occasions, and he certainly would not know who I am if asked, based on several years working at the Branson family office, I can say:

• SRB is a quintessential entrepreneur with an unbelievable risk appetite (c.f. Virgin Galactic) and ability to pull rabbits out of hats (again, c.f. Virgin Galactic)

• The British press has a habit of misrepresenting what he says and does, often unfairly and inaccurately, mostly taking a pop at him to get cheap clicks

• The Branson family genuinely have an ambition to do the right thing and strongly believe in the power entrepreneurial energy to solve big problems

I can also say it has been a truly extraordinary place to spend four and a half years.

I watched the Virgin Group invest hundreds of millions of dollars in Space companies pre-pandemic, and hundreds of millions more in Aviation mid-pandemic. I saw Virgin and SRB arguably legitimise SPACs as investment vehicles and catalyse the explosion in the space - and Space - that we have seen over the past couple of years. I visited shipyards building billion-dollar ships, and sailed on one once it launched. I witnessed the Virgin machine mobilise to help in the midst of tragedy: Grenfell, Hurricane Irma, Covid-19. Oh, and I livestreamed SRB flying to space, watching from my Grandma’s kitchen table as she described it - and him - as “marvellous” over and over.

That’s some of the stuff Virgin Group did while I was there. And personally, I got involved in all sorts, too.

I spent more than two years trying to get a Virgin-branded financial services company off the ground in North America, which included a lot of flying around and frog-kissing in various parts of the U.S. and Canada. We had more than a few false starts: several months on an opportunity in Dallas, several more on one in Quebec, and over a year on a third in New York (the hardest and the most painful to lose). We met truly phenomenal teams and got intimately familiar with the scaly underbelly of capitalism: the U.S. banking regulators. But it wasn’t meant to be. Not yet ;)

On top of financial services and FinTech, I spent time looking into all manner of other weird and wonderful sectors: flying cars (“EVTOL”), smart home, co-living, out-of-home entertainment, podcasts, fitness streaming, telco, EdTech, loyalty and a tonne more. I said “no”, politely, to would-be Virgin founders literally hundreds of times - and at least five times turned down the idea of branded ‘Extra Virgin Olive Oil’. I helped negotiate and renegotiate several Trademark License Agreements (“TMLAs”) for the Virgin brand across different sectors and countries. More than once, I helped design the Virgin Group’s strategy for the Virgin Brand and the operating model to deliver against it.

Alongside my ‘day job’ of corporate strategy and development for the Virgin brand, I wiggled my way into a role within our venture capital investing, supporting direct investments in Sofar Sounds, Loansnap, Speechify, Printify and Wayve, and a fund investment in Lowercarbon Capital. The opportunity to meet some of the world’s most impressive entrepreneurs was incomparable to any other professional experience I have ever had.

I made good use of the generous ‘unlimited leave’ policy to study for and pass the CFA program, alongside lots of time in wonderful places on holiday. I got loads of ‘stuff’ to make working at Virgin an awesome experience: hampers, vouchers, discounts and other perks. I received nothing but compassion and unconditional support when I started to struggle mentally during the pandemic. I found some great friends and mentors along the way. And I learnt a massive amount from some deeply impressive operators.

But now I have decided to quit.

To understand why, even for myself, I have to go back to first principles and unpeel the layers of who I am and what I want to accomplish in life.

Why work?

Why even bother working?

Well, first and foremost, money matters.

My fiancée and I live in London - that’s an expensive place to be. We live in a flat in Newington Green that we bought back in 2019 - that’s an expensive place to buy a flat, even if it is a bit of a shoebox. We like to go out and have fun and do things like eat in nice places with friends - that’s an expensive thing to do. I would like to think of myself as relatively non-materialistic, but I have an iPhone, an Apple Watch, a MacBook Air, a Peloton, an Oura ring (temporarily misplaced), a Sonos speaker, etc. - those are all expensive things to own. We are planning a wedding in 2023 - that’s an expensive thing to do.

We could of course cut back to the bare bones and drastically reduce our spending, and we often go through periods of doing just that, to make sure we don’t fall victim to ‘lifestyle creep’. But assuming we want to carry on living the way we are living most of the time, all of those things need to be paid for somehow, right?

So we work.

But we don’t work just to keep living how we are living. If it were just about earning enough money to ‘keep going’, we could (and would) work less. We are in the lucky situation where we can pay for our lifestyles and still have some money left over at the end of the month to save and invest. But we don’t stop working on a Wednesday afternoon just because we can.

Why not?

Part of it is about building a ‘rainy day’ fund. Sure, we are earning enough money at the moment to fund our lifestyle, but what about those unexpected expenses that have a habit of cropping up at the worst possible time? It makes sense to save and invest some of our money to build up resilience from a financial standpoint so that we don’t have to rely on others to bail us out if things take a turn for the worse. I vividly remember the moment, in a cheap hotel in France in 2013 mid-way through the bruising experience of starting a company with no money and having just asked my brother for yet another loan, that I vowed to never rely on others for money again.

Part of it is also about building towards a ‘better’ life. What if we have a family? That seems like a pretty expensive thing to do anywhere in the UK, let alone if we want to stay in London. And what about that dog that Carole keeps campaigning for? And what about the house with some extra space - including some outside space - that both of those things would likely need?

So we work.

But it can’t just be about those things, either. If it were just about having money to fund our lifestyles today plus plenty more for savings and investments for rainy days and bigger houses, then why wouldn’t we both just go and earn as much money as we possibly could? But that just doesn’t appeal. Who knows if they would even take me, but would I go and work for a cut-throat private equity or hedge fund, or an investment bank, or a big corporate behemoth, if I knew it would boost my salary? No, I would not.

So we work for money, but not just for money. So what else?

What else?

Over the past 24 months the world has been turned upside down by Covid-19, which has given me - like millions of others - plenty of time to think deeply about what it is that I want to do with my life’s work.

After lots of endless ‘thinking’ and circular reasoning, the exercise I found most helpful was this.

Imagine there was no way of knowing what a job paid. You have just arrived in a brand new country where you are going to settle for the rest of your life. You have no frame of reference whatsoever about who gets paid more in this country - for all you know, a butcher gets paid the same as a barrister. The only thing you do know is that everyone gets paid at minimum enough to fulfil their basic needs and live a pretty good life.

In that scenario, what would you choose to do with your life’s work?

For me I landed on a few different features to look for - not in order of priority, because that would be too tormenting to try and do and isn’t the point. Here they are:

1/ I want - no, I need - it to be intellectually interesting. I am a very curious person and I love learning about new things, new ideas, new concepts, etc. I get bored very easily and get uneasy at the thought of ‘missing something’. Learning new stuff stretches my brain and my horizons upwards and outwards, like blowing air into a balloon and watching it expand in all directions. I love that feeling, even if it can be uncomfortable at times to realise you don’t understand something - and even more so when you realise you don’t really understand anything.

2/ I want it to change up every now and again. I hate repetitive tasks like weekly or monthly reports and I just could not imagine being happy shuffling the same papers all day even if I were paid a fortune to do it. Even if that same thing were intellectually stimulating, I would need a break from it every now and again to focus on something else. There are a lot of reasons I am not a PhD or an academic, and that’s one of them.

3/ I want it to be something where I can work towards mastery. Even though I don’t like repetition, I love the feeling of getting the knack of something. That burst of liberating satisfaction when you realise you are capable of something is one of the best feelings. I want my experience and expertise to compound over time. Part of that is about building and maintaining a competitive advantage over others who want to do the same thing as me, but a bigger part of it is about having pride in my work.

4/ I want it to be something that makes a difference. I need to feel like my life’s work is in some way contributing to the world at large. I want to nudge the world forward, even if only a bit, otherwise literally what is the point? To be clear, for me that doesn’t mean working in the third sector. The opposite, in fact: my personal belief is that the best path to changing things for the better is unleashing entrepreneurial fire, and creating the right support, rewards and incentives for those who do.

5/ I want it to be something I can build. Similar to the compounding effect I want to feel in my own mastery, I want something that builds in scale and quality over time. Most importantly, I want that thing to eventually exist without me, whilst perpetuating my values and beliefs. I do not subscribe to the trade of just swapping my time for money. When that stops, the music stops. I would rather spend my time working towards something that can endure and continue to create value - both financial and non-financial - in my absence.

6/ I want it to create opportunities to meet incredible people. Sometimes you come across people who change your perception of the world, a bit like when the optician is switching lenses during an eye test and asking you over and over, “Better or worse?” And it’s the most incredible experience when things come into a sharper focus than they ever have before, and you wonder how you ever managed to stumble through the world with such blurred vision. Increasing the velocity of interactions with that sort of person can only lead to good things.

7/ I want to be independent and autonomous, but guided. I have been told on multiple occasions that I can be a nightmare to ‘manage’. I don’t like being told what to do, nor how to do it, without being able to first try a few things and make a few errors. That does not mean I don’t want or listen to guidance. I want to be able to learn from others and avoid making the same mistakes they did. But I need some creative freedom, particularly when it comes to solving problems and coming up with ideas.

8/ Finally, I want it to be rewarding. Yes, I want to make money, for all the reasons I covered before, and yes, the more the better, all else equal. But I don’t want to be given stuff in life: I want to be rewarded. I want alignment between the risk I take on and the reward I get back; between what I put in and what I get out. I want to put skin in the game, and if I create value, I want to share in that value. To be clear… do I want to win the lottery? Absolutely. But if my job gave me all - or even half - the things in #1-7 above, would I stop ‘working’ if I did? Absolutely not.

That’s a lot of “I wants” and is probably (definitely) a bit idealistic. It is also very clearly written by someone who is privileged enough to not need to worry how to pay the mortgage this month, at least not for now. To be fair, that is kind of the point of assuming that even in this strange new world where you don’t know the financial pay-off of a given career, you know you won’t be on the bread line.

The point is this: “money” has a habit of being pretty reductionist, and so not particularly useful as a decision-making criteria for non-financial choices.

In fact, reductionism is one of the fundamental roles money plays for society: to distil a kaleidoscope of stuff into a common ‘unit of account’ - a commonly defined language - to allow comparability and ease of communication. It is an abstract representation of how a thing - any thing - relates to any other thing in terms of its financial value. But that’s all it is - a representation of something else, rather than a thing in and of itself.

That works a charm in helping us avoid having to price haircuts in terms of loaves of bread, or buildings in terms of bicycles. But it’s less apt for matters of motivation and purpose. So taking it out of the equation entirely forces you to think beyond it to the underlying ‘thing’ that you are really looking for.

OK, #8 in my list is cheating a bit because it is at least related to money, but it’s less about having buckets of the stuff and more about how those buckets got filled. A purely rational economic being wouldn’t give a toss, but nothing is more perfectly irrational than assuming perfect rationality.

Different folks, different strokes

There might be quite a lot on my list that others agree with. Similarly, there are probably quite a few that people disagree with.

Work may not matter that much to many: some people want to just clock-in, clock-out, and get a paycheque at the end of the month. They find fulfiment from other areas of their lives, and see work as a means to and end, rather than an end unto itself. “Work to live, don’t live to work” and all that. I respect, envy and pity that mindset, all at the same time.

Perhaps I put too much of myself into what I do for a living (note: it’s called a “living”, not a “working”). Perhaps I let it - or perhaps need it to - define more of who I am than the average person. Perhaps that’s a revealing character flaw in and of itself.

But I am who I am, and I don’t see that changing any time soon.

Aligned

So what is the point of long lists of things to be looking for from work?

One thing I learned during Cognitive Behavioural Therapy (during a pandemic-induced meltdown of sorts) is the importance of living in alignment with one’s values. Not doing so creates deep-seated mental pressure that builds up and can manifest itself in ugly and unpredictable ways.

The first step of living in alignment with one’s values is to define them. That’s what the above thinking and listing is intended to do - to list my values, at least in a professional context. As an aside, writing stuff down in long-form has the phenomenal ability to lay bare inconsistencies, half-thoughts and parts of your character you’d rather not admit you had. It’s hard work but it’s incredibly worthwhile.

The second step is to take those values and measure up your life choices against them, and make changes where necessary.

And that’s what I did in evaluating this potential change in career. Which path sees me living more in alignment with my values and what I want from life?

I won’t go blow-by-blow evaluating Virgin across each item in the list, largely because to be honest Virgin ticked many of these boxes. But having done the hard thinking and weighing-up of pros and cons, I have come to an inescapable conclusion that now is the right time for me to move on to this new adventure.

Closing thought

Only time will tell if that is the right decision to take. But I need to live up to my own commitment to be more values-led in how I make decisions and free myself from need to be - or at least, feel - objectively ‘right’. Decisions have to be evaluated in the context within which, and more importantly, the foundations upon which, they were made, regardless of the outcome after the fact. And I feel confident that I will not look back on this one with regret.

The investment of one’s human capital is one of the most profound decisions we take in life. Unlike financial capital, there is no diversification, no hedging, and a finite lifespan. It’s ‘all in’. Doing the right thing is more important than doing the thing right.

I’m mid-way through a book, VC: An American History by Tom Nicholas, which is providing a fantastic historical context of how the VC industry evolved in North America, from its philosophical origins in the whaling industry of New England in the 1800s, through the ‘First Industrial Revolution’, through the formalisation of the industry during the 1900s, first pioneered through family office vehicles (among them Venrock) and ultimately leading to the limited partnership of today as the chosen structure.

At the same time, I spent New Year in Zurich with a friend of mine, Nick, who is amongst the most talented and thoughtful people I have ever known. We were discussing our relative careers. He has spent the last few years working for an oil company in Singapore, and - having become a bit sick of the sheer profit incentive given exposure to the exorbitant world of oil trading - is now moving to a renewables-focused role back home in Australia.

I told him about my recent decision to move into the venture capital industry ‘full time’ and the underlying motives for my move, which he thoughtfully quizzed me on as a reliable Devil’s advocate. The core of his questioning was this: why is it right that early-stage investors should benefit from the hard slog of the entrepreneur(s), who don’t have the luxury of diversifying their human capital in the same way that the investors can diversify their financial capital? Aren’t VCs just leeching off other people’s ideas and efforts, whilst also playing in a casino with other people’s money?

Why risk capital matters

Early-stage funding is a peculiar beast.

Unlike funding a more mature and stable business, often there is not yet a proven ability to generate cash flows (the anchor of traditional company valuation). There might not yet be a product, customers, or even a proven market. Instead, it could come down to an investment thesis based solely on a strong belief in the founder(s), their vision and their ability to execute.

As a result, funding early-stage companies is fraught with risk, including but not limited to:

• Market risk: does or will the market exist for the product or service?

• Technology risk: can the technology do what it says it is going to do?

• Execution risk: can the founder(s) successfully execute against the vision?

• Regulatory risk: will the relevant government(s)/regulator(s) embrace the innovation, or seek to restrict it?

• Funding risk: can the founder(s) continue to raise the capital required to get the business to scale?

With all these different types of risk, early-stage investing is not for the faint-hearted. But it is critical to the forward progress of society. Entrepreneurship and the pursuit of profit has proven itself time and again to be the most scalable and reliable driver of human progress. By definition, innovation is about doing things that have not yet been done - about pushing boundaries more than anyone else has in the past. It’s about an individual or collection of individuals boldly driving into new territory to move the world forward. Riskless innovation is an oxymoron.

But starting a new company from scratch is expensive. Not only must the founder(s) absorb the opportunity cost of working on other things (e.g. foregoing a salary), there are real cash costs to be paid like hiring talented people, buying equipment (e.g. computers), contracting for services (e.g. software licences), engaging professionals (e.g. laywers and accountants) and renting premises (e.g. office space). For all of those, and the ten other things not listed, capital is needed. And that capital has to come from a source that is willing and able to take on the extreme risk of failure for the potential upside of things going well.

If early-stage risk capital were not available, imagine all of the products and services that would not have been invented and brought to market by the entrepreneurs of history. The device I’m typing this article on (Apple Macbook), the platform I am publishing it to (Mirror.xyz), the browser that helped me navigate to the website (Google Chrome), the internet service that connects everything. Essentially everything around us at one stage required someone, somewhere, to take on an outsized risk and commit capital to building the future.

Risk capital is therefore not only desirable but critical; it is the spark plug that gets the entrepreneurial engine firing and moves the world forward.

Returns

The unfortunate reality is most early-stage ventures fall victim to one or several of the risks mentioned above and end up losing money for investors.

Early-stage returns are ‘non-normally’ distributed, meaning they do not follow the typical bell curve shape of a normally distributed dataset like the height of a population. Instead, they have positive skewness, with most outcomes clustered around zero but with some extremely successful investments in the ‘long tail’.

A similar way of expressing the same point is using the example of the statistic concept of a ‘Power Law’, which in this context can be used to describe how a precious few early-stage investments succeed wildly whilst the vast majority fail. The bet for the early-stage investor is that by diversifying their investments across multiple early-stage bets, the ones that do well will ‘pay for’ the ones that fail.

Unfortunately, that doesn’t always seem to quite work out either, because the same ‘Power Law’ plays out at the fund level. The top funds generate outsized returns while the majority of funds underperform. Indeed, data on the U.S. VC industry from Cambridge Associates shows that some ‘vintages’ (i.e. the year the fund was raised), particularly during/near market ‘tops’, saw more than 50% of VC funds lose money, as occurred in 1998, 1999, 2000, 2002.

Even where funds don’t lose money, underperformance vs. a benchmark - which, in the case of VC, is typically publicly-listed equity indices - is the cardinal sin of investment capital allocation and is common in the VC industry.

The data below shows that on an IRR basis you would have been better off passively investing in the Russell 3,000 index, a ‘dumb’ basket' of publicly-listed companies, than investing in an index of early-stage venture funds in each of 1999-2002, 2005-06 and 2008-09. And that’s before adjusting for risk (volatility of returns), illiquidity (slow or expensive realisation of investment value) and survivorship bias (poor data and reporting for worst-performing funds, skewing reported returns upwards).

Making the numbers work

All this implies that the ‘winners’ are what keeps the early-stage show on the road.

The winners are the shiny penny that serves as the alluring prize to induce capital mobilisation towards early-stage ventures. Without that, the wheels grind to a halt on the funding of new ventures, and innovation - and society - suffers as a result.

By definition, then, when an early-stage investor makes an investment, there has to be potential for an outsized outcome, to pay for all the bets that turned out to be losers and deliver an acceptable financial return to the limited partners in those funds. That means that when the winners win, there is indeed a substantial value transfer away from the entrepreneur who is ‘doing the work’ and towards the investor - and their investors, the limited partners - who are benefiting from the entrepreneur’s effort.

But that has to be the way it works for the ecosystem to be able to support entrepreneurs with early-stage risk capital in the first place. By generating outsized returns for investors, the successful entrepreneurs are helping to propagate the ecosystem that enabled them to become successful. It’s not unlike a university alumnus donating money to the school that helped them get to the position where they have enough money to give away. Or a form of ‘winners’ tax’ that redistributes capital back into entrepreneurial ‘society’, the same way income tax is - or at least should be - invested by governments back into public goods like education, healthcare and infrastructure.

All of that means that seeing investors of risk capital as ‘greedy’ or ‘leeches’ is myopic at best and actively detrimental to societal progress at worst. The logic is simple: to move the world forward, we need innovation, which needs entrepreneurs, who need risk capital. That simplifies neatly: to move the world forward, we need innovation, which needs entrepreneurs, who need risk capital.