a16z Podcast

a16z Podcast: How To Understand And Choose A Venture Investor

Jul 17, 2019
Understanding venture capital is key for startups. Explore the intricate relationship between CEOs and venture capitalists. Learn about the critical role venture capital plays in financing and the risks involved. Navigate the differing expectations of aggressive growth versus sustainable strategies. Grasp the J curve concept, revealing how early losses can lead to gains. Lastly, uncover the evolving landscape of venture capital as it adapts to new funding trends and market dynamics.
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INSIGHT

VCs and Risky Ventures

  • VCs fund risky ventures that traditional banks avoid.
  • They provide permanent capital, unlike loans that need repayment.
INSIGHT

LPs and VC Funds

  • University endowments, seeking high returns, are primary LP investors in VC funds.
  • They view VC as a crucial component for high-risk, high-growth opportunities.
INSIGHT

VC Portfolio Strategy

  • VC portfolios rely on a small percentage of high-return investments (like Facebook or Google) for overall success.
  • Most investments either fail or yield modest returns, making home runs crucial.
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