Hornik has also added Shader to his list of references, which is probably even more valuable than the deal itself. When entrepreneurs call to ask about Hornik, Shader tells them, "You may be thinking he's just a nice guy, but he's a lot more than that. He's phenomenal: super-hardworking and very courageous. He can be both challenging and supportive at the same time. And he's incredibly responsive, which is one of the best characteristics you can have in an investor. He'll get back to you any hourday or nightquickly, on anything that matters."
The payoff for Hornik was not limited to this single deal on PayNearMe. After seeing Hornik in action, Shader came to admire Hornik's commitment to acting in the best interests of entrepreneurs, and he began to set Hornik up with other investment opportunities. In one case, after meeting the CEO of a company called Rocket Lawyer, Shader recommended Hornik as an investor. Although the CEO already had a term sheet from another investor, Hornik ended up winning the investment.
Although he recognizes the downsides, David Hornik believes that operating like a giver has been a driving force behind his success in venture capital. Hornik estimates that when most venture capitalists offer term sheets to entrepreneurs, they have a signing rate near 50 percent: "If you get half of the deals you offer, you're doing pretty well." Yet in eleven years as a venture capitalist, Hornik has offered twenty-eight term sheets to entrepreneurs, and twenty-five have accepted. Shader is one of just three people who have ever turned down an investment from Hornik. The other 89 percent of the time entrepreneurs have taken Hornik's money. Thanks to his funding and expert advice, these entrepreneurs have gone on to build a number of successful start-upsone was valued at more than $3 billion on its first day of trading in 2012, and others have been acquired by Google, Oracle, Ticketmaster, and Monster.
Hornik's hard work and talent, not to mention his luck at being on the right sideline at his daughter's soccer game, played a big part in lining up the deal with Danny Shader. But it was his reciprocity style that ended up winning the day for him. Even better, he wasn't the only winner. Shader won too, as did the companies to which Shader later recommended Hornik. By operating as a giver, Hornik created value for himself while maximizing opportunities for value to flow outward for the benefit of others.
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