Secrets of Sand Hill Road
Secrets of Sand Hill Roadby Scott Kupor
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p.122
First, employees do often judge the success of the business at least in part on the external measure of valuation in a financing round. Second, even if that valuation looks great in the absolute sense (or in the relative sense, compared with your previous round of financing), employees are likely to compare it to other companies that have raised money recently, in many cases independent of whether those companies are relevant benchmarks. Third, never underestimate the value of always maintaining momentum in the business, one measure of which may be a successful financing round
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Linda Xie@linda﹒6mo
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p.115
the advice we often give to entrepreneurs is to think about your next round of financing when you are raising the current round of financing. What will you need to demonstrate to the next round investor that shows how you have sufficiently de-risked the business, such that that investor is willing to put new money into the company at a price that appropriately reflects the progress you have made since your last round of financing?
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Linda Xie@linda﹒6mo
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Successful venture-backed companies have had an outsize positive impact on the US economy. According to a 2015 study by Ilya Strebulaev of Stanford University and Will Gornall of the University of British Columbia, 42 percent of all US company IPOs since 1974 were venture backed. Collectively, those venture-backed companies have invested $115 billion in research and development (R&D), accounting for 85 percent of all R&D spending, and created $4.3 trillion in market capitalization, which is 63 percent of the total market capitalization of public companies formed since 1974.
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Richard Chen@rchen8﹒6mo
moving capital efficiently
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p.91
But it's critical to the health of your future company to understand how to set up your business. So let's eat our broccoli together.
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Diogo Monica@diogomonica﹒6mo
Scott is hilarious! 🤣
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p.86
We talked earlier about Accel Partners and their tremendous success in early-stage investing at Facebook. Well, alongside that fund investment, the firm's managing partner at the time, Jim Breyer, invested about $1 million of his own money for a 1 perce stake in the company.
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Diogo Monica@diogomonica﹒6mo
I really like the silicon valley lore in this book. Didn’t know about this personal investment from Jim.
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p.50
Similarly, products that often have massive advantages over the status quo are aspirins; VCs want to fund aspirins.
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Diogo Monica@diogomonica﹒6mo
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p.47
Can I conceive of a team better equipped to address the market needs that might walk through our doors tomorrow? If the answer is no, then this is the team to back.
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Diogo Monica@diogomonica﹒6mo
I understand the idea, but this doesn’t follow optimal stopping problem’s solution.
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p.19
Interestingly, Marc and Ben made their angel investments through an entity known as HA Angel Fund (Horowitz Andreessen Angel Fund), a reversal of the now well-known brand name for their venture fund.
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David King@dk﹒7mo
Interesting bit of Silicon Valley history. Why the name change?
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p.12
Cofounded by Marc Andreessen, the already revered cofounder of Netscape, LoudCloud was trying to create a compute utility (much like Amazon Web Services has now created).
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David King@dk﹒7mo
I'd love to hear the inside baseball story about LoudCloud. We now live in a world where AWS/GCP/Azure seem practically ubiquitous. Same vision. Was LoudCloud simply too early or were other factors at play?
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When too much money is chasing too few deals, there's only one possible result: Because we have too few entrepreneurs, we can't put enough money to work. Instead, it's wasted on bidding up the prices of the few available assets rather than funding the kinds of organizations that are actually needed.
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David King@dk﹒7mo
Why we need more Y Combinator-like services. e.g. what Daniel Gross and Laura Deming are each respectively doing
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Think about this: venture-backed companies now spend 44 percent of the entire R&D budget for American public companies. The 665 public companies that are VC-backed make up a fifth of the total market capitalization of public companies.
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David King@dk﹒7mo
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