Behind the Scenes at a VC Fund, Part 1: Deals, Deals, Deals

My fund, Susa Ventures, just added Natalie Dillon to our team. She's our first-ever investment team hire and we're very excited to work with her. While speaking with dozens of wonderful candidates for the role, I was reminded of how opaque venture capital is as a profession. Many of the candidates asked what a typical day and a typical month are like for a VC. Is it schmoozing at parties for 40 hours a week? Taking back-to-back investment calls while lounging on some tropical beach? Making million-dollar decisions using coin flips? Reading technical research papers? (Answers: no, no, no, and hardly ever.) Now that I've been doing this job for a while, I thought it might be useful to document what working in venture capital is like for anyone who may be curious. This 3-part series is a summary of my experience being one of three partners at Susa Continue reading "Behind the Scenes at a VC Fund, Part 1: Deals, Deals, Deals"

A Return to Blogging

I'm embarrassed by how much I've fallen behind on writing new blog posts. I've been unusually busy at work for the last few months, but I am finally at the point where I can start writing regularly again. This is a short housekeeping post about recent things I've produced outside of this blog + upcoming posts that I'm finishing up.

Table of Contents

Upcoming Posts

Social pressure helps me get things done, so I'd like to publicly list the posts I'm planning to publish in August:
  • A post on the day-to-day work in a venture capital firm. I crowdsourced questions for this a few months ago, got many excellent suggestions, and have been working on the post ever Continue reading "A Return to Blogging"

A Return to Blogging

I'm embarrassed by how much I've fallen behind on writing new blog posts. I've been unusually busy at work for the last few months, but I am finally at the point where I can start writing regularly again. This is a short housekeeping post about recent things I've produced outside of this blog + upcoming posts that I'm finishing up.

Table of Contents

Upcoming Posts

Social pressure helps me get things done, so I'd like to publicly list the posts I'm planning to publish in August:
  • A post on the day-to-day work in a venture capital firm. I crowdsourced questions for this a few months ago, got many excellent suggestions, and have been working on the post ever Continue reading "A Return to Blogging"

Three Mathematical Models for Building a More Valuable Company

"All models are wrong, but some are useful." - George E. P. Box
It's very hard, maybe impossible, to create a mathematical model that describes how to build a successful company. Still, there's value in trying to come up with different models and thinking about their implications. This post describe three possible models for calculating a startup's value and the lessons that each model offers.

Model #1: A Product of Risk Multipliers

In How to De-Risk A Startup, I described nine major risks that most startups face, as well as how investors might evaluate each of those risks:
  1. Product/Market Fit Risk (is your product something that people want?)
  2. Product Quality Risk (can you build a great product?)
  3. Team Risk (do you have a great team for achieving your vision?)
  4. Recruiting Risk (are you able to grow your team effectively with strong talent?)
  5. Sales Risk
    Continue reading "Three Mathematical Models for Building a More Valuable Company"

Tit-For-Tat Office Hours with a Seed-Stage VC

For a while now, I've wanted to try holding office hours. I've been a big beneficiary of Silicon Valley's pay-it-forward culture, and I'd love to play a part in maintaining that culture. Winter holidays are a forced vacation for VCs*, so this seems as good a time as any to give office hours a try. The experiment that I want to conduct is "tit-for-tat office hours": each person I meet with can ask me whatever they want for 20 minutes, and then I can ask them to teach me something related to their professional experience for 5 minutes. I've never tried this before, but hopefully it'll be useful and fun for everyone involved. What? 25-minute time slots for office hours with a software engineer turned VC. When and Where? 10am-4pm on Dec 28 (Redwood City), Jan 4 (Redwood City), and Jan 11 (SF). Who is this for? Current and aspiring Continue reading "Tit-For-Tat Office Hours with a Seed-Stage VC"

How to Use Thought Experiments to De-Risk Your Startup

"In preparing for battle, I have always found that plans are useless but planning is indispensable." - Dwight D. Eisenhower
In the early days of building a company, it's hard to step back and think about the bigger picture when there are always so many fires to fight or opportunities to chase down. That's a shame, because looking at your business from a 50,000-foot view often reveals areas of misplaced focus or resource misallocation. One technique that can break through the bubble of always being in the weeds is conducting occasional thought experiments that give you insight into your company. This post is a catalog of sixteen useful thought experiments. Each experiment consistents of a thought-provoking question and an explanation of that question's purpose/motivation. Most of these thought experiments require a different frame of reference on your company -- either from the perspective of another person or another time
Continue reading "How to Use Thought Experiments to De-Risk Your Startup"

How to De-Risk a Startup

In a previous post, I wrote that startups are collections of risks, and that the best way to make progress on a company (and to get higher valuations from investors) is to address the biggest risks as quickly and thoroughly as possible. But how do you actually mitigate different types of risk? How do you convince yourself that you have product/market fit? How do you persuade investors and employees that you can build a lasting company? How do you demonstrate to early adopters that you're good at building products? This post contains a (non-exhaustive) list of common startup-related risks, the spectra along which those risks might be classified, and some tips and heuristics for mitigation. The further you move from "high risk" to "low risk" along each spectrum, the stronger your valuation, perceived progress, and likelihood of success will become. The entries on each risk spectrum are rated from Continue reading "How to De-Risk a Startup"