Introducing…..
22 TopVC
Funds
28 TopVCs
Roelof BothaSequoia Capital
Mike MaplesFloodgate Fund
George ZacharyCharles River Ventures
Sean DaltonHighland Capital
Howard MorganFirst Round Capital
Tim DraperDFJ
Harry WellerNEA
David CowanBessemer Venture
Mitchell KertzmanHummer Winblad
Scott SandellNEA
Gus TaiTrinity Ventures
Steven DietzGRP Partners
Ann WinbladHummer Winblad
Jim GoetzSequoia Capital
Roger LeeBattery Ventures
Ken HoweryFounders Fund
Eric HippeauSoftBank Capital
David LeeSV Angel
Ted AlexanderMission Ventures
Robert KibbleMission Ventures
Jim BoettcherFocus Ventures
Kevin McQuillianFocus Ventures
Mike HodgesATA Ventures
Alan PatricofGreycroft Partners
Rich WongAccel Partners
Vish MishraClearstone Partners
Randy KomisarKleiner Perkins
Peter WagnerAccel Partners
8 Amazing
Founders
Alex MehrZoosk
Osman RashidChegg
Michael BirchBebo
Paul ScalanMobiTV
Alfred LinZappos & Sequoia Capital
Kevin HartzXoom & Eventbrite
Rajiv LaroiaFlarion
Ben ElowitzBlue Nile & Wetpaint
70+ Most
SuccessfulStartups
One Question:Why so many startups fail while few defy all odds to
become billion dollar successes?
What’s their secret sauce?
35 Experts Answer:
Straight from the gut talk on startup successes & failures…….. war stories
behind top startups
What you will learn:1. Why startups fail?
2. What are the most common pitfalls you can avoid?
3. How to pick winning ideas and markets?
4. How to build winning teams?
5. How to pick investors?
6. When to ramp up or down?
7. When to sell or grow to IPO?
8. How to recover failing startup?
Five Must-Know Facts for Entrepreneurs
1. Big & Bold Idea (Non-consensus idea)
2. A.I.M. (Authenticity, Integrity, Motivation)
3. A+ DNA (Winning Team)
4. R.I.P. (Rapid Iterations & Pivoting)
5. Objectivity & Adaptability
1. Big & Bold Ideas
Non-consensus and unconventional ideas are in fact less riskier and more likely to succeed…….
So Dream Big, Be Bold & Go For It
2. Authenticity, Integrity & Motivation
Purity of your passion and integrity combined with 10k hours leading to authenticity serve as talent
magnet to attract best in business to join you
So A.I.M. high
3. A+ DNA
Startup success is all about people. Passionate and authentic entrepreneurs attract “A+” team and
build winning cultural DNA
So never settle for anything less than A+
4. Rapid Iteration & Pivoting
Hardly any original business plan made it to final winning product. Fast trial and error is key to land
product-market fit.
So iterate and pivot at very high RPM & with Small Turning Radius
5. Objectivity & Adaptability
Be passionately disinterested by actively looking for truth without bias about outcome. Then accept
and adapt.
No idea is worth billion dollar so listen to the data and market
What’s Driving VCs?
LPs invest usually 5-7% of their asset in the VC fund for diversification. Venture Capital falls within very high risk high return asset class
VCs need to deliver very large returns in line with the objective of this asset class
Most investments will fail……fail to either return principal or give mediocre 1-2x returns. That’s a failure.
VCs manage a fund for their investors called LPs or Limited Partners
But one or two investments, if picked right, can give 10-20-100x returns and more than pay for all other investments
Copyright VCs At Work Tarang Shah
That’s what drives VCs. They want to be part of building that next Google, Groupon, Facebook, LinkedIn, Twitter that can deliver 5-10x return on the entire fund. That’s success.
What do VCs Look for?
Market First
Most VCs are in either Market First or Entrepreneur First Category
First identify promising
market
Look for promising team
than can execute in that market
Entrepreneur First
First identify promising
Entrepreneur
Follow their lead into promising
market opportunity
What do VCs Look for?
Billion Dollar Market
You need both great market and great entrepreneur to build billion dollar startup..
Promising Entrepreneur
SuccessfulStartup
Successful startup happens when a great team collides with a billion dollar market opportunity...
VCs are looking for startups that are positioned well for this collision….
What do VCs Look for?Copyright VCs At Work Tarang Shah
Extended Team
Scalability (Sales, Business Model,
Product
Core Team
Product/ Idea
Market
Cofounding Team
Stage 0Formation
Stage 1Build & Prove
Stage 2Grow & Scale
Funding Type
How Much?
Typical Valuation
Dilution
Seed Super Angel Series A Series B Series C Series D, E, F
$50-500k $500k-2M $3-7M $7-25M $15M+ $25M+
$1M $3-5M $5-10M $15M+ $50M+ $100M+
25-40% 5-10%
???
Product-Market Fit
Combination of Charisma, authenticity and genuine passion creates a talent magnet to attract best in business to join him…
Anatomy of Successful Entrepreneurs
Balanced Ego – Big ego to pursue unconventional ideas but in-check ego to surround with people smarter than him
Authenticity – Product view informed by 10k hours of tinkering; deep experience that provides insights into the fine nuances of market and customer
Passionate Disinterest – Passionate to seek out the truth but not biased about the outcome – highly objective
Big & Bold Head – “The World is Not Enough” ; Not afraid of non-consensus view
High Integrity – Transparent
and Trustworthy
Real Visionary – Can see the whole company beyond current product
Genuine & Avid Passion to solve the problem and make a difference -> A Missionary
Personal Relevance to the pain point being solved – motivation beyond making money
Iterative – Not afraid of failures but like Edison enjoys discoveries through methodical trial and errors
Extremely Focused – breaking vision into short-term metrics and single-mindedly pursuing it.
Big Ears – Listens actively and intently to customers and analytics
Copyright VCs At Work Tarang Shah
Anatomy of Successful Cofounding Team
Complementary Skills (e.g.
business, tech)
• Reduces friction• Creates multiplier
effect
Proven Chemistry
• Extremely important to get past small and big differences that will arise
• Keeps focus on winning as a team
Past Successful Working
Relationship
• Working relationships and structure is pre-determined and can hit the ground running quickly
High Potential
Cofounding Team
• Becomes a talent magnet to attract core team
1. Reduce the risk of dissonance and hence risk of failure
2. Hit the ground running from day 1 than work on chemistry
Copyright VCs At Work Tarang Shah
Anatomy of World Class Team
1. Surround yourself with people smarter than yourself – key is not to get intimidated or feel insecure around smarter people
Hire for Cultural fit as much as
functional skills
Hire People you have worked
with well before
Lift the quality of team with each hire and
fire
Hire people who can start adding value day 1 – No time for training
Hire unfettered passion without
ego & restrictions of past learning
Fire promptly and amicably
someone who is not fitting well
2. Six rules of smart team building…
Copyright VCs At Work Tarang Shah
Identifying promising new markets
Changing Customer Behavior
Promising new markets are usually formed at the cross section of changing customer behavior and new
technology
New Technology
Highly Attractive
Market
Supporting Infrastructure
Youtube is a great example of this. Sequoia partner Roelof Botha provides great insights about this in the
book.
Changing Customer Behavior
• P2P Video sharing as a new customer behavior was reaching a tipping point in 2005
• 2004 Asian Tsunami UGC video sharing showed market timing was right
New Technology
• Availability and mass adoption of handheld camcoders
• Flash made is easy to watch videos right into internet browsers
Supporting Infrastructure
• Broadband and PC penetration provided widespread infrastructure for creation and sharing of UGC videos
Highly Attractive
Market
• Creation of billion dollar UGC video sharing market
Identifying promising new markets
Identifying New Promising Markets
Every new platform that embeds itself becomes a fertile ground for sprouting next group of billion dollar
startups
Transistors
Chips
1950 1960 1970 1980 1990 2000
Micro Computers
PCsIntel
AppleMicrosoft
3ComCisco
NetscapeeBayAmazon
???
IBM LANsWANs
Internet
Mobile
What are some of the Emerging Platforms Today?
Smartphone iPad/ Tablet
PayPal Amazon ???
Facebook Twitter
???
Making of New Markets
Horse
Collision of two technologies spawns a new species
Donkey Mule
Flarion (acquired by Qualcomm for ~$1B) is a great example…
Wireless and internet were evolving as two different silos and needed to be brought together to make rich media internet work on wireless
Disrupting Established Markets
Fat Cats
Creating 10x advantage with new technology
New Technology
New Lean Mean Cat
• Stagnant, Non-innovative and Non-responsive lazy cats
• Leveraging Technology to create 10x value-add over incumbents
Fat Telcos P2P Sharing Skype
Blockbuster Internet Netflix
Shrinking a dollar to make 10 cents (e.g. internet ads)