My Board Journey: Jay Hoag
By Eve Tahmincioglu

Director, Electronic Arts, Netflix, Prodege (parent company of Swagbucks), TripAdvisor, VICE Media, and Zillow. Founding general partner at TCV, a leading provider of capital to growth-stage private and public companies in the technology industry. 

You’ve said, “Investing in technology and working with entrepreneurs is the greatest possible job in the world’s greatest industry.” How did you stumble upon the industry?

I was fresh out of business school and starting work as a research analyst at Citicorp Investment Management in July 1982. The offered me three choices of industries to cover: paper and forest products, publishing or technology. As I knew equal amounts about each industry (which was to say nothing!), I somewhat randomly chose technology. If you recall, this was an era where the personal computer was emerging, but technology’s future was far from certain, and it was a bit of the wild, wild West.

The first sector I focused on was software, which was a bit contrarian as it was the hardware companies that were best understood. I was fortunate to perceive that software would be the ultimate value driver.

Obviously since that time, the technology industry has exploded in size, impacted many other industries, and generated the top six most valuable companies in the world. It’s been an incredible tailwind for the 36+ years I’ve been investing.

How did you get on your first board?

As a growth equity investor, when we invest in a company, getting on the board is standard practice.

One of the earliest boards I can remember was Pure Software, which was founded by an entrepreneur in his late-20s by the name of Reed Hastings. I was lucky enough to recognize early what an incredible visionary Reed was and when Pure was ultimately sold he went on to start Netflix. We monitored his progress and we invested (and I went onto the Netflix board) in 1999.

As an investor and a board member, how do you think your approach to corporate governance is unique?

Well, I don’t know if my approach is unique or not, but here is how I approach it.

I believe you must dig in deep to really understand the business and the company. Come prepared to all board meetings and certainly don’t mail it in.

Recognize that many issues are complex and not as simple as some corporate governance folks would have you believe. Compensation is a great example. Many corporate governance folks (including Institutional Shareholder Services) have check the box guidelines on what is acceptable and what isn’t. I believe that each company, and each team, is quite different and needs to be approached in that manner. We’re typically a large shareholder in companies where we are on the board. We believe in fully compensating management teams for superior performance, and that can often result in material dilution.

Be simultaneously supportive and testing of management. Provide words of encouragement during tough stretches and push on questions of “what could go wrong” during periods of great excitement and progress. In being a bit of a balancing force you can help get through tough times and emphasize that a team and the board are clearly in it together.

Finally, recognize that the best technology companies are those that play the long game. That can sometimes be unpopular with public market investors, but it’s the path to ultimately the greatest shareholder value. Help make the right decisions around re-investing in growth, insuring that each member of the management team is able to help scale the business, and help support the visionary CEO who is looking to conquer the next mountaintop.


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