Paying it Forward

MAY 13, 2013

During senior year in high school, my Uncle Steve Cohen decided that he was going to buy me a top-of-the-line racing shell. Uncle Steve is always doing whatever favors he can for me, whether it be advice over lunch, sending me books, or whatever kindness he thinks up. But this boat was going too far. I protested as much as I could-because, seriously, those things are expensive-but he would have none of it. "When kids are passionate about something," Uncle Steve always says, "you've gotta support 'em." And sure, I was extremely passionate about crew-rowing upwards of 4 hours each day-but I just felt so uncomfortable taking a gift that I'd never be able to repay. But Uncle Steve was a man of his word. A few months later, a custom-made Hudson single arrived at my school's boathouse and I went on to have the best senior year imaginable, spending hundreds of hours out on the water in my beloved single.

My life has been blessed with the generosity of many givers, like Uncle Steve, but I never got why they did what they did or, more importantly, how I was ever going to repay them. Because, quite honestly, I'm not sure I'll be successful enough, soon enough to reciprocate the kindness I've been afforded in a timely manner. However, I recently read an amazing book that explains exactly how I'll pay Uncle Steve, and all the givers in my life, back: I'll pay their generosity forward.

Sometime in the middle of last semester, a good friend of mine forwarded on a yet-to-be-published first chapter of Adam Grant's book Give and Take. I didn't quite make it into Professor Grant's class for next semester-despite asking him on national television - so reading his book was my next best option. And it turned out to be a great one. Grant has this playful way of overtly trying to convince you of one fact, and then, once he has you, pulling out the rug from under you and revealing that it was the exact opposite that was true the whole time. Even after you get the hang of his antics, you read his obviously-misdirecting passages in disbelief: No way... How is he going to come back and discount this statement? But then he does come back, armed with anecdotes and hard evidence, and reveals some incredibly counter-intuitive thoughts.

But for me, the most interesting part of reading my father's heavily-annotated copy of Grant's book, isn't that givers become immensely successful. I already knew that from the givers in my life, like Uncle SAC, my dad, Josh Kopelman, Phin Barnes and many others. Sure, plenty givers are found in professions you'd expect, like teaching, medicine and non-profit-and I am indebted to many in those professions, as well-but the fact that many end up as successful businessmen, who are normally characterized as self-interested or greedy, doesn't surprise me in the least. The interesting part for me was the concept of "paying it forward", that I'd heard plenty of times-mostly at First Round Capital-but never truly got.

Yes, being generous is a good thing and, yes, being a nice guy can foster business, but when you've got stakeholders to report to and employees that you're responsible for, how can you take time, energy, and money and pay it forward to people that have not, and may never, pay you back? How can First Round afford to invest half a million dollars and, more costly, countless hours to college students through their Dorm Room Funds, who may or may not ever pay them back in returns? For that matter, how can Uncle Steve afford to buy me, someone who's not even a blood-relative, a custom-made racing shell, when he knows for a fact that I'll never pay him back?

But therein lies the catch: givers don't need to be paid back. In the case of First Round's Dorm Room Funds, sure, First Round would like to make a large return on their investment. And they'd love Dorm Room Fund startups to go to First Round when looking for additional funding. However, they aren't too upset if Dorm Room Fund startups chose other venture capital firms instead. Because with an institution like Dorm Room Fund in place, the entire startup ecosystem benefits. The pie is made larger in a way that wouldn't have been possible if First Round wanted to eat the whole pie themselves. Similarly, my generous Uncle SAC simply wants to make the world a better place by inspiring kids like myself to pursue what they are passionate about. He doesn't really care what we're passionate about, only that our passions will drive us to accomplish great things in this world. And it's quite a weight off my shoulders. For although I still have been given much, I now know where to pay it back.