An infamous VC used to say…

Happiness Is positive cash flow

Back in the early days of venture capital, Fred Adler was an opinionated “character” whose successes helped pave the way for today’s far different equity investment world.

I know just a bit about him because the co-founders of Accel Partners, where I worked for 11 years, helped him grow Adler & Company. I was reminded of all of this yesterday because I had coffee with an entrepreneur who was a James R. Swartz Entrepreneurship Fellow at Carnegie Mellon University.

Jim Swartz was my mentor at Accel. And among many other things he told me a bit about Fred Adler.

While I never learned all of Adler’s 10 Rules for Venture Capital Companies, I do remember this one (which is #4 on the list). Probably that’s because it was a riff on the Peanuts “Happiness is…” series.

Happiness is having a best friend

I grew up reading Peanuts in the comic pages. It was a great way for a kid to learn simple wisdom.

Happiness is family

The simple wisdom from Fred Adler is that happiness for entrepreneurs comes from positive cash flow. More cash comes into the business every month from operations than goes out. Simple to measure. Not simple to achieve!

Don Gooding


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