VC Fundamentals: Blue vs Red Oceans, Power Law Returns & Fund Structures – E569

Jeremy Au shares how venture capital evaluates startups, using examples from crypto confusion, post-WWII VC history, and power law returns. He explains why founders often misunderstand their market type, how tech repeats old cycles, and how VCs structure investments. Speaking practically, he highlights why founders must communicate clearly and how VC math rewards big winners and tolerates many losses.

1. Founders often believe in Blue Ocean, but many are in Red Oceans. Almost all founders think their idea is unique, but many just add features.

2. Red Ocean founders should expect slower, efficient growth. VCs advise Red Ocean founders to grow carefully, accept slower returns.

3. Blue Ocean founders must clearly explain their differentiation. VCs become jaded and need clear explanations to believe in new categories. 

Watch, listen or read the full insight at https://www.bravesea.com/blog/vc-judgement-patterns

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