The VC Field Guide

The Venture Capital Investment Framework

Venture capital is the economic engine that drives entrepreneurship and innovation through capital investments, board membership, advice, introductions to relevant employees, and customers. Despite the outsized importance of venture capital, the inner workings remain hidden. Venture is still a mentor-led industry and it is an industry where you have to do a lot of self-education--you have to learn by doing, and you have to get up to speed quickly.

Until now.

Author William Lin spent over a decade in venture capital, starting in an entry-level position, helping to start a leading VC firm from scratch, and eventually becoming Managing Partner. In The VC Field Guide: Fundamentals of Venture Capital, Lin shares his unique framework, the Venture Capital Investment Framework, to help any venture capitalist, entrepreneur, or investor make better investment decisions, quicker. He delivers an incisive and practical handbook for the world of venture capital. You'll learn about the industry, how to break into it, and discover the art of investing in startups, and more, including:

• How VC deals are analyzed, vetted, and made
• Which questions experienced and successful venture capital investors ask startup founders when making investment decisions, and why those questions matter
• The venture capital mindset that dominates the thinking of the most prominent venture capital investors
• The best ways to begin a career in venture capital and tips on advancing your career
• Key differences between multi-stage and boutique firms and what it means for entrepreneurs
• The different factors VCs use to evaluate early-stage versus late-stage companies

If you want to be close to company creation and innovation as a venture capitalist, investor, or entrepreneur, this book is for you. If you want to be involved in situations that impact economic growth, innovation, and the founders, employees, vendors, and communities that support the broader entrepreneurial ecosystem, this book is for you. The VC Field Guide is not only a primer on the inner workings of the venture capital industry, but a timely framework for how investment decisions are made. Anyone who wants to better understand how venture capital investments are made, and why will find this book helpful.

Auteur

WILLIAM LIN has spent his career close to creation and creators, as an entrepreneur, founder, innovator, and investor. Over a decade as a venture capitalist, Will started as an entry level investor and eventually became Managing Director and member of the founding team at Forgepoint Capital, a $1 billion AUM venture capital firm with roots in cybersecurity. He co-founded and is Chairman of the Security Tinkerers, a nonprofit organization that gathers information for security professionals seeking opportunities in the security community. He is now pursuing the next stage of his career as a founder of a cybersecurity startup. Will graduated from UC Berkeley and lives in the Bay Area with his life partner, dog, and cats.

Texte du rabat

The Venture Capital Investment Framework Venture capital is the economic engine that drives entrepreneurship and innovation through capital investments, board membership, advice, introductions to relevant employees, and customers. Despite the outsized importance of venture capital, the inner workings remain hidden. Venture is still a mentor-led industry and it is an industry where you have to do a lot of self-education--you have to learn by doing, and you have to get up to speed quickly. Until now. Author William Lin spent over a decade in venture capital, starting in an entry-level position, helping to start a leading VC firm from scratch, and eventually becoming Managing Partner. In The VC Field Guide: Fundamentals of Venture Capital, Lin shares his unique framework, the Venture Capital Investment Framework, to help any venture capitalist, entrepreneur, or investor make better investment decisions, quicker. He delivers an incisive and practical handbook for the world of venture capital. You'll learn about the industry, how to break into it, and discover the art of investing in startups, and more, including: How VC deals are analyzed, vetted, and made Which questions experienced and successful venture capital investors ask startup founders when making investment decisions, and why those questions matter The venture capital mindset that dominates the thinking of the most prominent venture capital investors The best ways to begin a career in venture capital and tips on advancing your career Key differences between multi-stage and boutique firms and what it means for entrepreneurs The different factors VCs use to evaluate early-stage versus late-stage companies If you want to be close to company creation and innovation as a venture capitalist, investor, or entrepreneur, this book is for you. If you want to be involved in situations that impact economic growth, innovation, and the founders, employees, vendors, and communities that support the broader entrepreneurial ecosystem, this book is for you. The VC Field Guide is not only a primer on the inner workings of the venture capital industry, but a timely framework for how investment decisions are made. Anyone who wants to better understand how venture capital investments are made, and why will find this book helpful.

Contenu

Foreword xi

Preface xiii

Acknowledgments xv

Part I Introduction 1

Introduction 3

My Background 3

Who Is This Book For? 9

The Framework's Origin 10

Endnote 14

Part II The Venture Capital Investment Framework 15

Chapter 1 The Venture Capital Investment Framework 17

Startup Investing 17

Chapter 2 Who = Team 23

Different Paths to Success 26

Curiosity Is a Must- Have for Founding Teams 27

Individual or Company Growth? 30

The CEO and Team Challenges 31

Curiosity and ? 33

Failure Is a Valued Asset 37

In- Person Data 38

Team Dynamics that Work 40

Chapter 3 What = Problem 47

Deep Questions, First Principles 49

Common Sense and Bias 52

You Don't Have to Solve Your Own Problem 53

Finding a Problem 55

Chapter 4 When = Timing 59

Timing = Environment 61

Specialization Leads to Success, Leading to Optionality 62

Generational Timing 64

Timing and Disruption 66

The Rise and Fall of Companies 68

Chapter 5 Where = Market 73

How VCs Look at TAM 74

Strategy for VCs Based on the Size of the Firm 79

Calculating TAM and What Does It Imply? 81

Chapter 6 Why = Solution 83

Solving One Problem Really Well 85

Building the Right Solution 87

Building a Sustainable Business 90

Chapter 7 How = Scale 91

The Sales Organization 93

Sales Organization and Customer Alignment 96

The Technology Organization 98

Chapter 8 How to Use the VCIF 101

The VCIF in Action: An Investment We Made 102

An Investment We Didn't Make 107

Stages 112

Part III Notes to Stakeholders 115

Chapter 9 The Venture Capital Role 117

The Basics of a Venture Capital Firm 118

Winners Lose a Lot 123

Metrics 126

My First Trial by Fire 128

Chapter 10 Notes for Students 135

Three Entry- Level Career Paths in Venture 135

Chapter 11 Notes for Current VCs 141

VC Career Paths 141

VC Career Myths 147

Chapter 12 Notes for Entrepreneurs: Some Thoughts 151

Chapter 13 Notes for Startup Customers 155

Chapter 14 Notes for LPs: Characteristics of Some of the Best VCs 159

Sector Knowledge 161

Chapter 15 Long- Term Planning: Venture Capital Cycles, Optionality, Starting a VC Firm 165

Venture Capital Cycles 167

Optionality 168

Could You Start Your Own VC Firm? 172

Conclusion 175

Afterword 179

Glossary 181

Index 185