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VC Explained
- Venture capital (VC) firms invest other people's money, like university endowments, into startups.
- VCs invest in a variety of industries and stages, acting as a service firm for entrepreneurs.
A16Z's Service Model
- A16Z's operating teams help startups with hiring, customer acquisition, etc., aligning incentives with entrepreneurs.
- Traditional VC firms prioritize fees, but A16Z primarily profits from portfolio company success.
Embracing Failure in VC
- Successful VCs accept that most investments will fail.
- They prioritize the potential magnitude of success when evaluating companies.