20VC Special: Accel Founders Arthur Patterson and Jim Swartz on Building Accel Into One of the Most Prominent Venture Firms Over Four Decades, How Today’s Market Compares To The Dot Com Bubble and Why Accel Will Never Have a Sand Hill Road Office
Posted on 8th November 2021 by hstebbings1
Arthur Patterson and Jim Swartz founded Accel in 1983. Under their leadership, they have built Accel into one of the most prominent venture firms of the last 4 decades.
Starting with Arthur, as the lead investor, Arthur has helped management teams develop companies into market-defining leaders over an incredible four decades. Prior to co-founding Accel, Arthur was a General Partner of Adler & Company with his career in venture starting at Citicorp Venture Capital.
As for Jim, Jim has been a lead director of more than 50 successful companies. He was instrumental as a founder/mentor of Accel London and in the founding of Meritech Capital. Before Accel, Jim was the founding general partner of Adler & Company, which he started with Fred Adler in 1978 after his tenure as a vice president of Citicorp Venture Capital.
In Today’s Episode with Arthur Patterson and Jim Swartz You Will Learn:
1.) How Arthur and Jim made their first entry into the world of venture capital in the 70’s? What was the founding moment for them with Accel? Where did the first discussion happen? Did they align on strategy? Why did they decide to name the firm Accel?
2.) What did the venture ecosystem look like when Arthur and Jim founded Accel in 1983? Why does Arthur believe the specialist always beats the generalist? What was the hardest Accel fund to raise? Why was it the hardest to raise? When did the Accel brand hit an inflection point and fundraising became easier? Where do Arthur and Jim disagree on this?
3.) How do Jim and Arthur feel about the current frothiness of the venture market? Why does Jim believe we are entering a market correction? How do they feel about the inflation of asset value? Through what lens is now the same vs different to 1999/2000? What have been their biggest lessons from experiencing 5 macro booms and busts?
4.) How did Jim and Arthur think about when to expand with a new Accel product? What did Accel do specifically to make the expansion to London and India so successful? What is the key to doing generational transition well? Where do many go wrong here? Do Jim and Arthur agree with Doug Leone, “when you lose seed, you become private equity”?
5.) How do Jim and Arthur think about partner selection within the firm? How have they structured decision-making to ensure politics do not get introduced? How does one create a decision-making framework of accountability without fear to take big risks? What do Arthur and Jim mean when they speak of “the prepared mind”? How does it help them think and operate better?