Vc Field Guide - Fundamentals of Venture Capital

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.

List of contents

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

About the author

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.

Summary

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.

Product details

• Authors: Lin, William Lin
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Hardback
• Released: 01.07.2023
• EAN: 9781394180653
• ISBN: 978-1-394-18065-3
• No. of pages: 224
• Subjects: Social sciences, law, business > Business > Business administration; Venture Capital, Finanzwesen, BUSINESS & ECONOMICS / Knowledge Capital, Allg. Finanz- u. Anlagewesen, Finance & Investments, Finanz- u. Anlagewesen, Finance and the finance industry