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When I set out a of couple months ago to buy a new car, I never thought it would pan out similarly to a venture capital deal, but it did..

It started when I made my mind up that I wanted to lease a car, so I spoke to a few dealers and browsed through the different car sites. I came across a site where you can take over existing leases from people who, for whatever reason, needed to get out of their lease without incurring penalties. After a month or so of searching the site incessantly, I found exactly the car I was looking for and was ecstatic. Then came the hard part.

The car was leased in California by a guy who currently lived in the Bronx and the car was located in Connecticut at his family’s house. Alright, no big deal, let’s get the paperwork started.

Unfortunately, the following six weeks were by no means as cut and dry as I thought they would be. The short version is that I had to juggle a leasing company, a regional bank, a major insurance company, and, my favorite, the Massachusetts RMV. I was getting different guidelines from each of them and they all had their own processes that I had to work through. In the end, after countless phone calls and three trips to the RMV, the car is mine and I’m picking it up this weekend. So how does this remind me of a VC deal?

I was short on details, but several parts of my experience were very similar to the process it takes when investing in privately held technology companies. Nick Hammerschlag does a great job describing the process behind putting a venture deal together in this post. Put simply, there are a lot of moving parts that need to be aligned and many different people need to come together to make it work.

Here are four more specific ties between the two processes:

Finding the right vehicle

Similar to speaking with dealers and searching different websites, I go through the same sort of process daily to find interesting deals for our firm. In talking to companies and keeping a pulse on what we are looking to invest in, there are a lot of hours that go into finding the perfect fit between company and investor.

Going through the application process

Getting my credit checked, confirming my employment, and checking proof of insurance are akin to the customer calls, reference checks, and sifting through the data we are provided in the diligence process. Making sure what has been discussed in previous calls and meetings matches up with the facts is crucial and may seem time consuming, but it ensures everyone comes out on the other side of the deal in great shape.

Managing each party

This may be the most difficult part of the process. In the example of my car, each company involved had different internal processes and a slightly different take on how to get things done. It is no different in a venture deal, when you have management teams, investment teams, accountants, lawyers, and consultants to help polish the details. It is glorious when everyone works in harmony, but one disruption in the layer can cause a ripple effect that slows down the process. Usually this gets ironed out quickly and everyone gets on the same page.

Turning the ignition

This part of my story is yet to be written, but when it happens I will be thrilled. Similarly, when a venture deal is completed and a partnership is formed, everyone is happy and ultimately drives off toward even greater successes.

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In my postion at OpenView, a major role I undertake is to explore every corner of the software landscape to find interesting investment opportunities for the firm. From this lens, I am witness to what a deal looks like from the first conversation to when the actual check gets written, as well as how the company performs post investment. So from that perspective, it becomes easier to see how and where to find businesses that we are most likely to invest in.

OpenView operates in a very unique and differentiated way, from the incredible work that our operational value add team in OpenView Labs offers, to the way our investment team operates and executes deals. We are different and that is distilled into how we search for interesting companies to join our portfolio. Granted, when there is a rising tide in a sector, our interest is peaked. But what really gets our blood pumping are businesses that are off the outside of the magnifying glass and that are probably not getting their door beaten down by the entire VC investing community.

To set the scene, take a look at the numbers from last year here. As you would imagine, California leads the charge with the Massachusetts and New York coming in behind them. Washington and Texas round out the top 5, and the report does a nice job to delineate between number of deals and actual dollars invested. Healthcare and Internet were the hottest sectors and ate up a big chunk of the funding.

Looking at this report, it is clear where the interest is, and we have thoroughly explored and invested in some of those geographies and sectors. But for me, I want to talk to the guys who aren’t necessarily on everyone’s radar. A lot of times, these are the companies that are a great cultural fit for us and can really use the support of our Labs team to scale their business. With that said, it is worth mentioning a couple of the commonalities I see in these types of companies.

Proximity to Talent. Whether there is a university nearby that produces strong engineering talent or a major technology company headquartered in the area, companies can pick off great talent from resources such as these. It is hard to recruit talent to places that aren’t your standard tech hubs, so when you have access to pools of experienced or promising engineers, developers, sales people, etc., you have a much better chance of building a great company.

Desire to Be Big. Many times when I’m talking to people in the Midwest, up in Canada, or other lesser penetrated locales, they often question our comfort level in investing outside of the standard markets. Although they know they have a great product and an excellent team, the incumbents in the market or competitors might be based in more sought-after cities. This fosters a competitive streak that can be great for building a large and successful business and is the recipe for a great partnership with OpenView.

Bottom Line. This can be as easily overlooked as it can be easily considered the most compelling factor. Simply put, your overall cost of doing business is drastically less. You may travel a bit more but what you save in overhead will be much greater.

The key takeaway for me is that while there are always going to be great companies coming out of the traditional hot spots, setting up shop in a less saturated geography can be very beneficial for everyone involved. Founders, employees, investors, customers, and even local economy — everyone — benefits when you step off the beaten path.

Day 1 for yours truly

As my first year as a VC comes to a close, I thought it would be great to share some perspective on how to make a smooth transition. In my past life, I was investing in the public markets which is a completely different ballgame than investing in private companies. So clearly, my mindset needed to change and I was quickly forced to adapt to a different approach. Here are key takeaways from this transition.

Sift through the noise

Information on publicly traded companies is much more readily available, as is the coverage and most times the breadth of information available. So whether you get it right or wrong, there is plenty of information to make investment decisions. In the private markets, you really need to do the leg work and have an ever evolving opinion about markets that you invest in (software and technology enabled businesses in our case). So when you are talking to companies that say they are big data, e-commerce, social collaboration, and so on — you better be able to distinguish who is telling the truth and who might be tweaking it slightly. Understanding what businesses are really providing their customers is essential.

Get up to speed

In my last gig, investments often times were made for a few months or quarters. At OpenView, we strive to build great companies that will take time to build and ultimately become winners in their market. So from the initial contact pre-investment through exit, it takes much, much longer, therefore adjusting my sense of investment horizon was crucial.

Manage people well

Clearly this is not limited to venture capital and investing, but it is a crucial part of my job. Building relationships with entrepreneurs and CEOs is number one on the list for obvious reasons, but also within our team. Understanding the strengths and interests of everyone (partners especially) and qualifying prospective investments is crucial. We invest in fewer companies than most VCs and spend an incredible amount of time with them post-investment, so it is very important to make sure I am connecting the right people together.

Take everything in stride

You will make mistakes, you won’t know the answer to certain things, and you will have conflicts with people. But addressing them right away and calmly finding a solution will leave everyone better off. We invest within extremely disciplined metrics so we often pass on a company who is actively raising and will probably do very well, but they just aren’t at the right stage. Other times we might miss a deal that seems like it would have been perfect for us. But if you are honest in real time and proactively try to figure out why you missed that deal, you will be less likely to sour a relationship with an interesting company and you probably won’t miss the next deal.

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In my last post - The Deck: Pitching VC’s and Looking Under Rocks, I talked about putting together a few meaningful slides that can frame a productive discussion about your business. Thinking more about the topic, I wanted to share some brief thoughts about a big part of that discussion — the elevator pitch. Yes, we all know what it is and understand the importance of illustrating our value proposition. This is not a new concept and has been widely covered, but nonetheless it is still very important.

Often times when I call a company, it starts with the elevator pitch, view from 30,000 feet, high level breakdown, or whatever you would like to call it (I prefer the aviation analogy). Either way, this is meant to put your company in the best light possible, in a succinct manor that should peak further interest in learning more. It is an art of not oversharing an unnecessary amount but also providing enough information so that you stoke the fire a bit. Here are a couple takeaways from conversations that I’ve had that have left me wanting to know more.

• Four sentences max. After that the attention starts to wane, and to be honest I’ve probably stopped listening because I am still thinking about what you have just said. It is difficult to narrow down an entire businesses (especially one that is very interesting) in a small block, but it is definitely achievable. I suggest taking out the notepad and just writing it all down and then chisel away and refine as needed.

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Granted it may be a little late to apply this year, but I thought it would be good to reflect on what to do when business isn’t exactly booming. Traditionally, the week between Christmas and New Year’s is very slow due to a lot of people taking off for vacation. This also happens toward the end of August, and while it can be a welcome breather, it is also hard to efficiently manage your time when there isn’t the usual workload you are accustomed to. Of course, sometimes there are deals to be closed, but if you find yourself in a bit of lull, here are a few pointers.

Tip #1: Grow a beard, wear something comfortable, or get an extra half-hour of sleep.

This can be a welcome change of pace and help recharge the batteries for when the sprint resumes in the new year.

Tip #2: Schedule a breakfast or lunch for each day with someone with whom you have been meaning to catch up.

It can be hard to find time when business ratchets back up and is a great way to maintain personal connections that may get lost during the year.

Tip #3: Clear out your inbox, get rid of useless clutter, and get lean for the the first week of January.

When everyone gets back from fun in the sun or a week on the slopes, it’s go time and you better be ready.

Tip #4: Spend time reviewing your year and make sure to personally reach out to people with whom you have an open dialogue.

It is a great week to get back on people’s radar and strengthen ties for 2012.

Tip #5: Make sure all systems are go for the new year and you have a well-crafted plan to have a successful year.

Playing catch-up is not fun and this week affords us the ability to oil up the machine and be ready to rock when everyone is back.

This is how I spent my week and would love to hear any suggestions you might have. I hope all of you had a great 2011 and even better 2012. Happy New Year!