All Things VC

Mori is a biotech startup that makes food last twice as long.  Whether it’s fruits, vegetables, meat, or seafood, Mori extends the consumption timeframe for nearly all foods. How do they do it? Well, here’s how they describe it on their website, which I encourage you to check out: “Our simple ingredients unravel the power of silk protein. From the farm to the shelf, our water-based protective layer is easily integrated at any wash step or station. Mori Silk is food protection technology that slows the natural spoiling process from many points in the supply chain.”  Tune in to hear all the social, climate, and economic impacts of a technological breakthrough like this and why landing a $300 million contract from Whole Foods isn't crazy. More All Things VC: If you want to read along this podcast, you can check out All Things VC on Substack If you want to watch clips of this episode and many others, you can check out All Things VC on YouTube

Founders Fund is likely the most non-consensus VC firm in the industry. Sequoia founder Don Valentine said to target big markets; Peter Thiel said to target small markets. Jeff Jordan says he likes competitive deals as a signal of future success; Brian Singerman says if a deal is competitive, then it’s too late to invest in that industry.  The list goes on and on, but in this essay, I’m going to elaborate on some of the truly unique principles of Founders Fund that, truthfully, I find to be the way venture capital and startup investing should be. Today, we’ll cover: Why to Target Small Markets Why Competition is for Losers Why Invest in Market Creators  Why all Investments need Supreme Conviction Why Founders Fund’s Firm Building Thesis is How Venture Capital Should be  I have several quotes from key partners at the firm that emphasize why Founders Fund is drastically different than any VC firm you’ve studied, but one you probably will learn the most from.  But first, who is Founders Fund? Founders Fund was founded in 2005 by Peter Thiel of PayPal fame, Sean Parker of Napster and Facebook fame (Justin Timberlake), Luke Nosek, and Ken Howery, both also of PayPal fame. Founders Fund essentially pioneered the “VCs as former founders” movement that is so prevalent today. Their guiding principle was to treat founders with the respect they deserve by ensuring them that they were in charge and never felt threatened by the VCs at Founders Fund, backed by a vow never to oust a founder. In 2005, these principles were very contrarian to the industry.  Their remarkable portfolio consists of SpaceX, Palantir, Stripe, Anduril, Facebook, Airbnb, Nubank, Rippling, Affirm, Ramp, Flexport, Spotify, and many more multi-billion-dollar companies.  Therefore, I encourage you to pay attention when reading about their investment theses because, clearly, they’ve had some remarkable success in practice.  More All Things VC: If you want to read along this podcast, you can check out All Things VC on Substack If you want to watch clips of this episode and many others, you can check out All Things VC on YouTube

Last week, I talked about how an investor would analyze a startup building something completely new with high technical risk and low market risk. That company was Loyal, which makes dog life-longevity drugs. From a market perspective, it is one of the most no-brainer investments if they can pull off the tech, which obviously is a huge challenge.  It got me thinking: what are some potential startups where a company can create something new that may be very technically challenging but with minimal risk from a market standpoint that makes a current process either much better or much cheaper?  I closed the essay by saying I’m not sure Figure AI qualifies as a low-market risk company since many other startups and large companies are going after humanoid robots. I do, however, think intelligent robots will be highly prevalent in our world in the coming decades, so I thought about where intelligent robots could best be applied to enhance our world while being financially worthwhile for an investor.  For some reason, perhaps due to my Pittsburgh upbringing or the fact that I just read (and loved) Last Train to Paradise, my mind went right to automated bridge inspection and repair robots. Exciting right?! I’ll get more into why I chose bridges later. For context, the government currently spends nearly $3b every two years on bridge inspection, despite the push for annual or semi-annual inspections, so there’s a need for greater efficiency there. Additionally, the government spends almost $15 billion a year on bridge repair, while estimates say there is currently about $125 billion in bridge repair spending needed to repair all of America’s bridges currently in poor condition.  So there’s certainly a market, and the current solution, human labor, is not getting the job done.  Perfect equation for disruption! I’m talking about companies that create robots that don’t just inspect the physical object but repair the object as well. Sell the work. Construction and AI seem to be one of the best applications for selling the work, and bridge repair is a good place to start.  Is that easy to build? I have no idea, but probably not! Can someone build it? Probably eventually! Is it worth building if you can? Definitely! More All Things VC: If you want to read along this podcast, you can check out All Things VC on Substack If you want to watch clips of this episode and many others, you can check out All Things VC on YouTube

Something I really appreciate about humanity is our openness to a good debate. We often see this in business. For example, in my last episode, some could say Wal-Mart’s cheapest pricing strategy prevented mom-and-pop general stores from being able to compete and wiped out many small businesses. On the other hand, I would say the cheapest prices model benefitted consumers most, which a free market optimizes for. As a result, more specialty mom-and-pop stores arose to counter-position themselves and compete, which also benefitted consumers. My point is that these claims can be argued. Loyal is perhaps the first company where I refuse to hear any argument that isn’t regarding how great this company is for the world.  Loyal is developing a safe and non-abusive longevity drug for dogs that will extend their lives by another year or two. How can you not root for this company?! That’s an incredible mission that everyone can get behind.  The largest dog breeds typically only live 8-10 years, medium 10-12, and smaller dogs a little longer. Dog owners know these pets can feel like family members, so how short their lives are is awful.  The three big questions facing Loyal now and in the future in investors minds are: How much of their drug can they sell while in the conditionally approved stage? Will they be FDA-approved? If not, the company may die or lose to a competitor.  If they are FDA-approved, how long will their monopoly continue?  All of these questions are extremely speculative for an outsider like me and, basically, anyone without direct connections to the company because no one outside the company knows how complex their drug is.  What I think is more interesting at the moment, or at least what I can write about, is how a seed-stage investor may have analyzed this company. After all, if Loyal successfully proves they can increase the lifespan of dogs, they will have a short-term monopoly on that market and likely generate significant cash flow. On the other hand, there were many places where their research could’ve failed, and Loyal could’ve gone out of business.  Therefore, this episode will include several scenario analyses that a seed-stage investor may have built when considering investing in Loyal back when it was just an idea. Throughout the episode, I frequently reference my YouTube video or Subtack post to view the analyses. You can find those links here: YouTube: https://youtu.be/AH2G4g7bHGY Substack: https://allthingsvc.substack.com/

You may be surprised that a podcast that discusses venture capital and startups decided to do a post on Sam Walton, who started his first company in the 1950s, and Walmart, one of the most bloated and uninteresting businesses today.  In 1962, however, Walmart was just a plucky discounting store in Bentonville, Arkansas, a town of less than 5,000 people, that innovated its way to go from $0 in sales to $26 billion in sales in 1990. No company at the time grew at even close to the rate that Walmart did, and no company in the world was more valuable because of it.  Sam Walton’s autobiography, Made in America, is a timeless manual for entrepreneurs building in any industry in the 1990s, the 2020s, or even the 2050s regarding how to start and scale a business. If you’re hesitant to believe me, you will after you listen to this podcast. If you think it won’t be worth it, well, Jeff Bezos credits this book with inspiring him to get into retail and took many lessons from Sam Walton to build Amazon into the juggernaut it is today.  Today, I’m not only going to discuss what made Sam Walton and the early days of Walmart so exceptional, but I’m also going to analyze why I would invest in Walmart in 1962 when Sam Walton opened the first store. Walmart wasn’t his first venture; in fact, it was his third, and he showed exceptional signs of entrepreneurial excellence prior to founding the company we all know today.  In this episode, I’m going to describe the key traits of Sam Walton as an entrepreneur and his vision and operating principles for Walmart as to why I’d invest while relating it to many examples in today’s startup environment because, as I said, these lessons are still highly relevant today. Then, I’ll discuss some ROI scenarios of investing in Walmart at the founding moment before concluding with ten rules for running a business straight from Mr. Walton himself, which I argue are the only pieces of business advice you need to know. More All Things VC: If you want to read along this podcast, you can check out All Things VC on Substack If you want to watch clips of this episode and many others, you can check out All Things VC on YouTube

In this episode, I describe a mock investment thesis on why, based on the public information I have available, I would invest in Synthesis.  Synthesis is an ed-tech platform founded by the creator of SpaceX’s Ad Astra school in collaboration with Elon Musk, a homeschool program for children of SpaceX employees to learn complex problem-solving and communication skills.  I go very deep on 1. The problem with our current education system 2. How Synthesis solves those problems 3. Their Market Size 4. Their Traction/Business Model 5. Direct and Indirect Competitors 6. The Team 7. The Long-Term Vision/ROI for an Investor 8. The Ed-Tech Market 9. Risks 10. How much I'd Invest and why It is a complete and thorough investment thesis for a fascinating company that any founder, investor, or parent needs to learn more about. There are many charts and graphs referenced in this episode, so I highly reccomend listening along and referencing my Substack post to read along. Also, you can check out All Things VC on YouTube for clips of key points of emphasis from this podcast episode and all others I've done in the past. There's a ridiculous amount of information there all condensed in various 60-second clips

MDSV Capital could be considered a fund of funds or a Series A investor. How can a firm be both? Well, through their truly unqiue investing model, MDSV has found a way to receive the option to invest in the best startups in the world at the Series A stage; the most competitive stage in venture capital; by having an army of emerging managers sourcing the best startups for them. How were they able to achieve this while simultaneoulsy providing better value as an LP to the emerging managers they work with and to the LPs who invested in MDSV directly? It's a masterful strategy that you'll learn about in this episode today. You'll also learned about the fundamentals and trade-offs regarding doubling down on your investments. If you enjoy this episode, please give it a rating! Also, subscribe to get notified when the next episode drops More All Things VC: If you want to read along this podcast, you can check out All Things VC on Substack If you want to watch clips of this episode and many others, you can check out All Things VC on YouTube

For framing, I had never heard of Zacua Ventures until a few weeks ago. Funny enough, their simple, few-paragraph announcement of their new $56m fund really interested me, primarily because they’re a firm focused on investing in the construction tech market. You don’t see that every day, especially in today’s market, where it’s all about AI co-pilots. So, being a contrarian thinker who gets bored by consensus thoughts, I decided to look into Zacua Ventures more. I quickly realized that this firm is rolling out a brilliant strategy that I would love to back as an LP if I could. In this episode, you will learn Zacua Venture's thesis along with my take regarding why I would invest, which includes: The viability of the construction tech industry Zacua investing as a niche within a niche Relationships with strategic LPs High conviction investments The potential to return a 10x fund If you enjoy this episode, please give it a rating! Also, subscribe to get notified when the next episode drops More All Things VC: If you want to read along this podcast, you can check out All Things VC on Substack If you want to watch clips of this episode and many others, you can check out All Things VC on YouTube

To recap, we’ve covered how a VC sources, picks, and wins investments into startups. These are the three core tasks of investing in venture capital. What we haven’t talked about yet, and what is present before, throughout, and after these core tenants of investing, is actually running the fund.  There are many aspects to running a fund, which we’ll cover here today, such as: The pros and cons of a large fund and a small fund Ownership targets at each stage of investing and Fund Return Breakdowns When to sell and when to double down There’s no right answer to any of these questions, but there are strategies that are vital for every fund manager to consider. Let’s dive in. More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about what makes a top VC with quotes from firms like Sequoia, Benchmark, Kleiner Perkins, a16z, Initialized Capital, and Accel, head to allthingsvc.blog. You can also follow me on X @Justin_Pryor_ for more information I post throughout the week based on what I discussed in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss.

Welcome to the third post in our five-part series of what makes a top venture capitalist based on insights from current and former partners at Sequoia, Benchmark, Kleiner Perkins, and a16z.  As a reminder, we will look at the following qualities of a good VC: 1. Sourcing 2. Picking 3. Winning the deal / being a good partner / adding value 4. Optimal Fund Size / Liquidity Strategies (when to sell) Today we will be looking at the traits venture capitalists need to have to win the partnership in the companies they choose to invest in. This is part three of the series. If you’re joining us for the first time, I suggest you check out pt. 1 on sourcing first. So far in this series, we’ve identified how top venture capitalists find great entrepreneurs and companies to invest in by being curious, constantly networking, and producing content as a beacon for entrepreneurs to find them.  Next, after you source hundreds of companies via both inbound and outbound strategies, you pick maybe a dozen or so per year to invest in. Top VCs pick the next great startups by avoiding FOMO but not bargain hunting, having both an open mind and a prepared mind, and being confident in their decisions. But all of that work is not enough to invest. You could spend hundreds of hours doing the above tasks to find that perfect company just for them to turn down your offer and go with your competitor. In this essay, we’ll cover the final piece of the puzzle for the lifecycle of an investment decision by winning the deal.  Typically, a founder chooses to work with a venture capitalist because the founder feels the venture capitalist will be a trustworthy partner and add value in some way or another. Maybe that VC started a company himself or herself and knows how to successfully scale a company, or maybe that VC is strictly an investor and will trust the entrepreneur to do whatever they feel is right, and the VC will solely act as a sounding board.  There’s a different appeal for every founder, but there are a few general traits that top venture capitalists share that help them invest in those exceptional companies they spent so long finding and analyzing.  In this post, I’m going to discuss how top VCs win the deal by:  Nailing the First Impression Being a Good Board Member  Having a Respectful Relationship with the Founder  I understand only one of these things comes before the founder makes a decision, but this section is about winning the deal by adding value and being a good partner, so the second and third points cover adding value and being a good partner. Usually, founders will make reference calls with other founders this VC has backed to vet that venture capitalist on their ability to add value and be a good partner. Therefore, it’s important a venture capitalist builds up this reputation because it will go into the founder’s decision.  More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about what makes a top VC with quotes from firms like Sequoia, Benchmark, Kleiner Perkins, a16z, Initialized Capital, and Accel, head to allthingsvc.blog. You can also follow me on X @Justin_Pryor_ for more information I post throughout the week based on what I discussed in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss.

Welcome to the second post in our five-part series of what makes a top venture capitalist based on insights from current and former partners at Sequoia, Benchmark, Kleiner Perkins, and a16z.  As a reminder, we will look at the following qualities of a good VC: 1. Sourcing 2. Picking 3. Winning the deal / being a good partner / adding value 4. Optimal Fund Size / Liquidity Strategies (when to sell) Today we will be looking at the traits venture capitalists need to have to be savvy pickers of the many companies they see. This is part two of the series. If you’re joining us for the first time, I suggest you check out part 1 on sourcing first. Many venture capitalists are initially screened on how many deals they see (sourcing). It’s the first test of good VC that shows you are curious, have hustle, and a strong network. Perhaps the hardest part, however, and what separates the good VCs from the great ones, is our topic for today: Picking. In this section, I’m going to talk about the qualities top venture capitalists have when determining which company to invest in. After all, top VC firms like Sequoia, Benchmark, Kleiner Perkins, and a16z see hundreds to thousands of companies a year and invest in maybe ten. It’s an extremely selective process that judges VCs on which deals they saw and invested in, which deals they saw and passed on, and how many companies within each bucket succeeded. The last thing a VC wants is to add a billion-dollar company to their anti-portfolio as one they saw but passed on. Those are the worst metrics.  The best metrics are IRR and Fund Multiple, which are directly correlated to how many companies you invested in that became valuable.  Today, we will discuss how to be a better picker by: 1. Avoiding FOMO but not Bargain Hunting 2. Having an Open Mind and a Prepared Mind 3. Having Confidence More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about what makes a top VC with quotes from firms like Sequoia, Benchmark, Kleiner Perkins, a16z, Initialized Capital, and Accel, head to allthingsvc.blog. You can also follow me on X @Justin_Pryor_ for more information I post throughout the week based on what I discussed in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss.

Welcome to this new five-part series on the qualities of a top venture capitalist based on insights from current and former partners at Sequoia, Benchmark, Kleiner Perkins, and a16z.  I will publish blog posts and podcast episodes once or twice a week, split into four parts, with one unique bonus essay I’ll reveal later. We will look at the following qualities of a good VC: Sourcing Picking Winning the deal / Being a good partner / Adding value Optimal Fund Size / Liquidity Strategies (when to sell) This will be a must-read for anyone interested in The different aspects of running a venture capital fund What traits make a good venture capitalist Why LPs fund certain venture capitalists  Why founders pick certain venture capitalists How you as a founder should screen a venture capitalist So, let’s get into part one: Sourcing.  Sourcing is the oxygen that gives life to a venture capital fund. Without it, the fund cannot exist. For those who don’t know, sourcing is the act of finding entrepreneurs to meet with to consider investing in. It can come via inbound, as in the entrepreneur reaching out to the venture capitalist due to his or her reputation, network, or content he or she published, or it can come via outbound, as in the venture capitalists reaching out to entrepreneurs to meet.  Effective sourcing is possible if the VC is curious, has the hustle to build a network, and puts out content as a beacon for great entrepreneurs to come to them. In this episode, we’ll discuss why these three concepts are vital for a venture capitalist, backed by quotes from greats such as John Doerr, Bill Gurley, and Jeff Jordan, among others.  Chapters: 1. Curiosity: 04:01 2. Network: 12:36 3. Produce Content: 24:10 More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about what makes a top VC with quotes from firms like Sequoia, Benchmark, Kleiner Perkins, a16z, Initialized Capital, and Accel, head to allthingsvc.blog. You can also follow me on X @Justin_Pryor_ for more information I post throughout the week based on what I discussed in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss.

In this episode, I reviewed some notes that didn’t make it into last week’s Accel podcast on why they invested in Facebook, Scale AI, and Flipkart and why they passed on Cisco, Skype, and Flickr. If you want to learn more about Accel, I suggest starting there. I used those notes to generate five questions I’d ask founders if I were a partner at Accel. While I don’t know whether they actually ask these questions, I have many direct quotes from current and former partners about what they look for in founders and questions they ask founders when determining whether to invest in a company. Therefore, I can extrapolate some reasonable questions. I think this will be a helpful thought exercise for founders who intend to raise to think about your answers to some of these questions as I believe they are questions an investor would ask whether Accel or not, so it’s good to think about. For investors, it’s good to think about the questions you like to ask founders and why and read some of these quotes from Accel partners, who are certainly some of the best investors in the world, so it’s worth reading this information and maybe adding some of these questions to your list if you think they’re effective. Chapters: 1. What's Working Now and What Are the Challenges? 2:00 2. How Do You Know This is a Problem? 8:29 3. What is Your Team Like? 15:27 4. What's Your Competition Like? 25:57 More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about Initialized Capital and many other companies they invested in that we didn’t discuss, more on their general investment theses, what makes a good VC, what they look for in founders, and general advice for founders, head to allthingsvc.blog to read more. You can also follow me on X at Justin_Pryor_ for more information I post throughout the week based on what I discussed in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss.

After discussing two venture firms, a16z and Initialized Capital, both founded in the last 15 years, we’re going way back to 1983, the founding year of Accel.  Accel has been an early investor in massive companies like Atlassian, Slack, Etsy, Discord, and Dropbox, among others. Its portfolio also includes the three companies we’ll discuss today: Facebook, Scale AI, and Flipkart.  Though there have been bumps in the road on their journey, as with any firm that has been around for 40 years, Accel has always been at the forefront of innovation, investing in technologies and trends before many others see it.  Today, we’ll learn why Accel invested in Facebook as the only VC firm the founders ever considered, why Accel invested in Scale AI before the AI movement was flourishing as it is today, and despite the founding CEO being 19 years old, and lastly why Accel invested in Flipkart, an Indian e-commerce company that was operating in a minuscule technology market in 2008 when Accel invested.  As we investigate why Accel invested in these three companies, we will analyze the firm’s general investment thesis, what they look for in founders, what traits make good VCs, and some general advice they have for founders.  At the end, we’ll examine some billion-dollar mistakes Accel has made in their storied career, including one they won’t be too upset about for reasons you’ll see later.  More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about Initialized Capital and many other companies they invested in that we didn’t discuss, more on their general investment theses, what makes a good VC, what they look for in founders, and general advice for founders, head to allthingsvc.blog to read more. You can also follow me on X at Justin_Pryor_ for more information I post throughout the week based on what I discussed in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss.

Last week, we looked into why Initialized Capital invested in Coinbase, Instacart, and Rippling. Additionally, we explore how they won the deals, what Initialized Capital's general investment thesis is, and how you, as a founder, can position yourself to get funding from Initialized. After reviewing many of my notes and direct quotes from current and former Initialized partners, I decided I would elaborate on five questions I'd ask founders if I were a partner at Initialized debating an investment decision. I think this will be a helpful thought exercise for founders who intend to raise to think about your answers to some of these questions as I believe they are questions an investor would ask whether Initialized Capital or not, so It’d be good to think about. For investors, it’s good to think about the questions you like to ask founders and why and read some of these quotes from Initialized Capital partners, who are certainly some of the best investors in the world, so it’s worth reading this information and maybe adding some of these questions to your list if you think they’re effective. More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about Initialized Capital and many other companies they invested in that we didn’t discuss, more on their general investment theses, what makes a good VC, what they look for in founders, and general advice for founders, head to allthingsvc.blog to read more. You can also follow me on X at Justin_Pryor_ for more information I post throughout the week based on what I discussed in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss. Chapters: 1. What have you built? 01:27 2. Why has this not been built yet? 08:39 3. What is your experience in this industry? 16:46 4. How do you know this is something your customers want? 23:18 5. Why should I join your company? 33:39

It’s rare that a Venture firm invests in 27 unicorns in just 12 years of its existence. It’s even rarer that a venture firm invests in 27 unicorns all at the seed stage, even when it’s just a founder and an idea. It’s EVEN RARER that a firm turns a $7 million fund into over $2 billion in distributed capital for LPs. Put all of those rare feats together, and you get one of the best, if not the best, early-stage VC firms: Initialized Capital.  Since its founding, the general thesis of Initialized, as described by founding partner Garry Tan, is as follows: “The coolest thing about initialized has always been being able to believe in Founders before it's totally obvious because that literally is what you have to do in order to create returns that nobody else can get. You have to believe in Founders maybe when they just have a demo, and they have an early idea that there's a problem that we could solve.” That is how you can achieve billion-dollar returns on less than $7 million of invested capital – by backing founders at the earliest possible stages – the highest risk taken for the highest reward.  In this essay, we’ll look into many principles Initialized has of backing builders, backing founders they’d want to work for, and attacking an opportunistic market with a very non-consensus idea. These theses, among others we’ll explore today, led them to invest in 27 unicorns, including Flexport, Cruise, Opendoor, and Patreon, among three other companies valued at over $7.5 billion, which we’ll discuss today. These companies are a few reasons why Initialized is regarded as one of the best pure seed-stage investors of all time and is quickly growing.  Today, we’ll investigate why Initialized invested in Coinbase, Instacart, and Rippling. We will also dive deep into the firm’s general investment theses, what they look for in founders, what traits make good VCs, and some general advice they have for founders. At the end, rather than our traditional Anti-Portfolio format, since either Initialized has no major mistakes or just has never spoken publicly about them, we’ll explore three mistakes Garry Tan has made personally in his startup journey that include key lessons for founders from a first-hand experience.  To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about a16z, along with several other companies they invested in that we didn't discuss, more on their general investment theses, what makes a good VC, what they look for in founders, and general advice for founders, head to allthingsvc.blog to read more. You can also follow me on X at Justin_Pryor_ for more nuggets of information that I post throughout the week based on what I talked about in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss. Intro Music: High St. by Alex Dethero

Last week, we looked into why a16z invested in Instagram (Burbn), Okta, and Slack (Tiny Speck), why they passed on Uber, Square, and FTX, how they won the deals, what Kleiner Perkins' general investment thesis is, and how you, as a founder, can position yourself to get funding from a16z. After reviewing many of my notes and direct quotes from current and former a16z partners, I decided I would elaborate on five questions I'd ask founders if I were a partner at a16z debating an investment decision. I think this will be a helpful thought exercise for founders who intend to raise to think about your answers to some of these questions as I believe they are questions an investor would ask whether a16z or not, so It’d be good to think about. For investors, it’s good to think about the questions you like to ask founders and why and read some of these quotes from a16z partners, who are certainly some of the best investors in the world, so it’s worth reading this information and maybe adding some of these questions to your list if you think they’re effective. More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about a16z and many other companies they invested in that we didn’t discuss, more on their general investment theses, what makes a good VC, what they look for in founders, and general advice for founders, head to allthingsvc.blog to read more. You can also follow me on X at Justin_Pryor_ for more information I post throughout the week based on what I discussed in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss. Chapters: 1. Why are you the person to solve this problem? 02:05 2. How big can this company get? 12:40 3. How are you reducing friction for the user? 24:05 4. How are you tackling the cold start problem? 32:14 5. What's the mission? 42:58

Today, we’re analyzing a16z, the VC firm that was the face of the bull market from 2009 to 2021. A16z fully embraced this movement by raising massive funds right out of the gate (their first fund was $300 million), investing at high valuations, creating a media platform for their VC firm with the help of renowned Hollywood agent Michael Ovitz, hiring hundreds of employees to support startups with sales and hiring, compared to just five partners at rival firm Benchmark, and spearheading the movement that former founders and operators make better venture capitalists than career investors do. It may be no surprise that many competing VC firms, then and now, share some distaste, or perhaps jealousy, for the loud and aggressive investing style of a16z. But as I’m sure partners at a16z tell their startups all of the time, to be successful, you have to differentiate. You have to take advantage of a movement and go big, and a16z certainly went big. Sure, it’s great they differentiated and led the charge post-GFC, but were they actually successful? Well, as we’ll see today, their first fund, which included the three companies we’ll discuss in this episode, posted a 44% net IRR as of 2018, according to Pitchbook, certainly putting them as one of the best-performing large-scale VC funds of the 2010s.  That means over an 8-10 lifespan, that fund was valued somewhere around $8-$10 billion on $300 million invested. A large chunk of that value is from winners like Stripe that haven’t actually returned capital yet, but other investments like Instagram, Okta, and Slack, which actually returned roughly $3.5 billion in capital to the firm, show that a16z can practice what they preach.  Today, we’ll investigate why a16z invested in Instagram (Burbn), Okta, and Slack (Tiny Speck). We will also dive deep into the firm’s general investment theses, what they look for in founders, what traits they feel make the best VCs, and general advice they have for founders. At the end, we’ll look into some huge misses they had in the past in companies like Uber and Square, and also one miss that, unlike most anti-portfolio companies, deserves some praise in the company formerly known as FTX.  To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about a16z, along with several other companies they invested in that we didn't discuss, more on their general investment theses, what makes a good VC, what they look for in founders, and general advice for founders, head to allthingsvc.blog to read more. You can also follow me on X at Justin_Pryor_ for more nuggets of information that I post throughout the week based on what I talked about in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss. Intro Music: High St. by Alex Dethero

A few weeks ago, we looked into why Kleiner Perkins Invested in Genentech, Amazon, and Google, how they won the deals, what Kleiner Perkins' general investment thesis is, how you, as a founder, can position yourself to get funding from Kleiner Perkins and discuss some regrettable passes they have in their anti-portfolio. After reviewing many of my notes and direct quotes from current and former Kleiner Perkins partners, I decided I would elaborate on five questions I'd ask founders if I were a partner at Kleiner Perkins debating an investment decision. I think this will be a helpful thought exercise for founders who intend to raise to think about your answers to some of these questions as I believe they are questions an investor would ask whether Kleiner Perkins or not, so It’d be good to think about. For investors, it’s good to think about the questions you like to ask founders and why and read some of these quotes from Kleiner Perkins partners, who are certainly some of the best investors in the world, so it’s worth reading this information and maybe adding some of these questions to your list if you think they’re effective. More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about Benchmark and 15 other companies they invested in that we didn’t discuss, more on their general investment theses, what makes a good VC, what they look for in founders, and general advice for founders, head to allthingsvc.blog to read more. You can also follow me on X at Justin_Pryor_ for more information I post throughout the week based on what I discussed in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss. Intro music: High St. by Alex Dethero Chapters: 1. How do your Users use the Product? 02:42 2. How will this Product Expand? 10:18 3. What are the "White-Hot" RIsks Facing your business right now? What do you need to Mitigate Them? 17:34 4. Have you ever Sold Anything Before? 24:10 5. What is the Base Case, and what is the Irrationally Optimistic Case for your Business? 31:12

A few weeks ago, we looked into why Benchmark invested in eBay, Uber, and Riot Games, how they won the deals, what Benchmark’s general investment thesis is, how you, as a founder, can position yourself to get funding from Benchmark and discuss some regrettable passes they have in their anti-portfolio. After reviewing many of my notes and direct quotes from current and former Benchmark partners, I decided I would elaborate on five questions I'd ask founders if I were a partner at Benchmark Capital debating an investment decision. I think this will be a helpful thought exercise for founders who intend to raise to think about your answers to some of these questions as I believe they are questions an investor would ask whether Benchmark or not, so It’d be good to think about. For investors, it’s good to think about the questions you like to ask founders and why and read some of these quotes from Benchmark partners, who are certainly some of the best investors in the world, so it’s worth reading this information and maybe adding some of these questions to your list if you think they’re effective. More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about Benchmark and 15 other companies they invested in that we didn’t discuss, more on their general investment theses, what makes a good VC, what they look for in founders, and general advice for founders, head to allthingsvc.blog to read more. You can also follow me on X at Justin_Pryor_ for more information I post throughout the week based on what I discussed in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss. Intro music: High St. by Alex Dethero

A few weeks ago, we looked into why Sequoia invested in Apple, Yahoo, LinkedIn, Airbnb, and Whatsapp, how they won the deals, what Sequoia’s general investment thesis is, how you as a founder can position yourself to get funding from Sequoia, and discuss some regrettable passes they have in their anti-portfolio. After studying my notes on Sequoia Capital, I realized I had more information to share beyond just why they invested in the companies they did. I realized I could recycle some of my notes to produce a new type of episode I intend to start releasing weekly, which will be five questions I’d ask founders if I were a partner at the VC firm of focus for this week. While I don’t know whether they ask these questions, I have many direct quotes from current and former partners about what they look for in founders and questions they ask founders when determining whether to invest in a company.  I think this will be a helpful thought exercise for founders who intend to raise to think about your answers to some of these questions as I believe they are questions an investor would ask whether Sequoia or not, so It’d be good to think about. For investors, it’s good to think about the questions you like to ask founders and why and read some of these quotes from Sequoia partners, who are certainly some of the best investors in the world, so it’s worth reading this information and maybe adding some of these questions to your list if you think they’re effective. More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about Benchmark and 15 other companies they invested in that we didn’t discuss, more on their general investment theses, what makes a good VC, what they look for in founders, and general advice for founders, head to allthingsvc.blog to read more. You can also follow me on X at Justin_Pryor for more information I post throughout the week based on what I discussed in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss.

The idea of investors who were former entrepreneurs and engineers backing entrepreneurs and engineers is mainstream in venture capital today. Back in 1972, however, at the founding of the venture capital firm Kleiner Perkins, startups were presented with different types of institutional partners. Partners that were typically from a finance or sales background and used banking tactics to invest in risky startups. We know now that this mindset of investing is clearly flawed, and the best venture capitalists are the ones who understand the entrepreneur’s mentality, product, market, and business plan, having been in the shoes of the entrepreneurs before and knowing what it means to build a product. Tom Perkins, the founder of a startup pursuing a new laser technology, and Eugene Kleiner, a member of the “Traitorous Eight” who formed Fairchild Semiconductor, were the firm's founding partners with the uninspired name of Kleiner Perkins.  As we’ve mentioned in past essays, VC firms have to sell their services, so every new firm needs to stand out. Kleiner Perkins, being a firm of entrepreneurial engineers for entrepreneurial engineers, was certainly a way to stick out in a field that had yet to find this notion as mainstream.  As a result, Kleiner Perkins cemented itself as one of the top VC firms throughout the 70s, 80s, 90s, and early 2000s. Much of their early success is attributed to this counter-positioning, allowing them to partner with exceptional entrepreneurs pursuing a difficult technical challenge that the Kleiner team could analyze better than many investors. In the 80s and '90s, the firm reached pinnacle status as one of its partners, John Doerr, became unquestionably known as the top VC in the valley, and many young entrepreneurs sought his counsel.  However, this run did not last, as the firm has seen less-than-exceptional results since pursuing a green-tech wave in the mid-2000s, from which it is now recovering. The firm currently has a group of twelve partners, all having joined the firm no earlier than 2017, seeking to bring Kleiner Perkins back to its heyday by investing in breakthrough internet technologies, much of what made the Kleiner Perkins of old so spectacular.  Today, we will investigate why Kleiner Perkins invested in Genentech, Amazon, and Google, their general investment theses, what they look for in founders, what traits they feel make the best VCs, and general advice they have for founders. At the end, we’ll look at some huge misses they had in the past in companies like Tesla, VMware, and Robinhood. More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about Benchmark along with 15 other companies they invested in that we didn't discuss, more on their general investment theses, what makes a good VC, what they look for in founders, and general advice for founders, head to allthingsvc.blog to read more. You can also follow me on X at Justin_Pryor_ for more nuggets of information that I post throughout the week based on what I talked about in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episode separated by each major topic I discuss. Chapters: Why did Kleiner Perkins Invest in Genentech? - 3:34 mark Why did Kleiner Perkins invest in Amazon? - 14:07 mark Why did Kleiner Perkins invest in Google? - 26:35 mark The Kleiner Perkins Anti-Portfolio - Why did Kleiner Perkins pass on Tesla, VMware, and Robinhood - 40:51 mark

There are a few companies that define a decade of startup investing. In the 1990s, it was eBay. In the 2010s, it was Uber. While these seem like completely different business models today, they rely on a similar theme around network effects that are at the core of the investment thesis of the VC firm we’re going to talk about today: Benchmark.  Benchmark has solidified itself as one of the greatest and most consistent venture capital firms of the last 30 years, defined by its seventh fund, which returned somewhere around 20-25x to its LPs, and its first fund, which returned at least 50x to LPs, potentially even 92x, making it most likely the greatest returning venture multiple of its size and scale.  Today, we’re going to talk about why Benchmark invested in decade-defining companies like eBay and Uber and another notable win that has many lessons to learn from in Riot Games. As our traditional format follows, we’re going to investigate why Benchmark invested in these companies, what their general investment theses are, what they look for in founders, how you as a founder can position yourself to raise capital from Benchmark, and lastly, we will take a look at some HUGE misses they’ve had throughout their near immaculate journey. More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about Benchmark along with 15 other companies they invested in that we didn't discuss, more on their general investment theses, what makes a good VC, what they look for in founders, and general advice for founders, head to allthingsvc.blog to read more. You can also follow me on X at Justin_Pryor_ for more nuggets of information that I post throughout the week based on what I talked about in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episode separated by each major topic I discuss. Chapters: Why did Benchmark invest in eBay? - 6:15 mark Why did Benchmark invest in Uber? - 24:06 mark Why did Benchmark invest in Riot Games? - 56:48 mark The Anti-Portfolio - 1:11:12 mark

Sequoia Capital is one of the most notable venture capital firms in the world. How notable? Well, As of this writing, Sequoia has financed companies worth over $7 trillion, yes, with a T, including three of the top six most valuable companies in the world: Apple, Google, and Nvidia. Founded in 1972 by a former Fairchild Semiconductor sales executive named Don Valentine, Sequoia rose to prominence by being an early investor in breakout companies like Atari, their first investment, and Apple, not too long after that. The success of their first fund, which included these two companies and generated a 60% IRR, increased their credibility along with the credibility of the entire venture capital ecosystem itself.  Today, we’re going to investigate why Sequoia invested in Apple, Yahoo, LinkedIn, Airbnb, and Whatsapp, how they won the deals, what Sequoia’s general investment thesis is, how you as a founder can position yourself to get funding from Sequoia, and discuss some regrettable passes they have in their anti-portfolio.  MORE ALL THINGS VC: 1. Website: I only mention a few companies, investment principles, and advice for VCs/founders, in each blog post and episode, but on my website, allthingsvc.blog, you can find dozens of companies that I provide insight into why that VC firm invested in that company and many more pieces of advice and lessons you can learn from. For example in the Sequoia blog post I talked about 5 companies Sequoia invested in, on my website I have information on about 25 companies Sequoia invested in. I encourage you to also check that out if you’re interested in learning more. 2. Substack: If you prefer to read rather than listen, you can subscribe to my substack with the same name, All Things VC, with the same logo and everything. Every essay will be shorter and more ot the point than the podcast, but still contain all the vital information within this podcast contained in 7,500-10,000 words. I recommend subscribing to both and seeing which you prefer or, ideally, consuming both! SOURCES: Episode Sources

All Things VC brings you the hardest-to-find secrets about why venture capital investors invest in the companies they did, what advice they have for founders, what makes a good VC, and what are some huge mistakes they've made from companies they passed on. I've spent thousands of hours and several years accumulating the best info about VC, so you can learn everything about scaling or investing in a startup in a few hours. You can expect an episode of All Things VC every Wednesday, so subscribe to stay up to date. I hope you learn as much as I do!