Coming next week - The Business of VC - 3rd edition....

A decade after the first edition

Next week, the third edition of my book, The Business of Venture Capital will be released by Wiley Finance. Writing a 500+ page tome, gathering interviews and insights from 75+ VCs and tracking 300+ references was a labor of love. <3. Thank you to all those who helped me along the way, the list has almost a hundred people and growing.

So what's new?

For one, the third edition is much fatter than the second edition. These five themes make this edition even more richer with insights from leading VCs:

Values: Ours is a business of values over valuation - yet I have seen first hand how some firms practise these values. Whenever I reach Scott Kupor at a16z for a random request, his response time is always lightning fast. I specifically requested him to author the preface for the third edition because only two VCs in my experience practice radical openness and responsiveness, especially when they have nothing to gain. (The other is Brad Feld who authored the preface for the second edition) Such simple behavior can be a model for most VCs. We have an entire chapter on values, some stellar examples - including some from leading firms such as Sequoia. On a side note, this chapter was also inspired by a lot of nonsense marketing statements being shlepped around by several VC firms, but their behavior was quite the opposite - and several cases of we have heard anecdotes of power dynamics, politics, emotional and psychological abuse. I tried to keep most of the gossip out of the book but gave in to my temptation on occasion. 

Diversity and culture: How did Adeyemi Ajao, a Nigerian born investor and TJ Nahigian raise their first debut fund, Base 10 Partners? I was fortunate to have met Ade (who had read the earlier edition of this book) who laid out a coherent strategy, had built a stellar track record and strong relationships with some of the best funds. As their debut fund was getting deployed, Base 10 went on to raise Fund II quickly, which was oversubscribed  - and they are off to the races. The conversations around diversity and inclusion in VC have just begun, and the shift may take time. With Ade in the mix, I am sure it will inspire more people to step up. Yet in the first edition of the book, I was fortunate to have met and written about Jan Garfinkle, who was raising her first fund Arboretum Ventures. Jan would go on to become Chair of NVCA and is now on her Fund V in a decade.

Solo GPs and Micro Funds: There are over 300 micro VCs / solo GPs. How do they get their funds off the ground? I was fortunate to get Paul Arnold of Switch Ventures to share his story. An ex-Mckinsey data driven VC, Paul started off small and is now playing in the bigger leagues. Managing a solo fund is hard, and one has to juggle three hundred fires every day. Paul's story is inspiring, for me and everyone else in the business. 

Rising stars and Exit strategies:  In the first two editions, I had written about details on finding an entry level path into VC. For the third edition, I was lucky to have crossed paths with several rising stars - two that stood out were Andrew Schoen of NEA and Sid Trivedi of Foundation Capital. Both came into VC using their smarts and hustle - one is investing in quantum computing and another in cybersecurity. Their stories will help the newcomers develop their own roadmaps for building out career maps. And is there an elegant way to get out of this business? Your own personal exit strategy if you will...In Silicon Valley, where there is no shortage of succession drama, Pat Grady shared a remarkable story of how the late Don Valentine planned his succession at Sequoia.  Paul Holland who recently transitioned graciously out of Foundation Capital shared his valuable insights. This chapter includes several examples like CEO-coach and whisperer Jerry Colonna, Igor Taber (who heads strategy at a leading AI company) and Chris Rizik (who went to head a fund-of-funds after his stint as a VC).  

Let me know how I can be helpful: We know our industry has matured when we have parody, comedy and riffs - we have had that oh-so-funny HBO Silicon Valley show but better still, we have a parody of a tweet account. To the anonymous and often hilarious @Vcstarterkit, I am grateful to let me include some of their tweets. One VC firm, Shrug Capital even has a full line of merch, including a wristband with the maddening “let me know how I can be helpful” slogan - hilarious! If anything, these funny, wicked smart friends remind us that VCs should not take themselves too seriously. In previous editions, I had failed to address these important issues of humor. My bad!

2020 helped us put things in perspective. Pandemics, forest fires, social and race challenges and shelter-in-place restrictions reminded us that we cannot eat cap-tables, or breathe long-term-capital-gains, nor can most of our companies solve the growing racial and economic divide. How can VC be a force for good in society - our work has just begun!