Agglomerators vs. Specialists

The problem is that good specialization is exceptionally hard. And mediocre specialization has two core problems:

1. It attracts less senior, more tightly defined work that traps you in a mode of repeatable execution work


2. It puts you in a well defined box that grinds against your identity

Of the billion-dollar companies in my dataset, about 60 percent had raised their first round of financing from tier-one (brand-name) venture capital firms like Sequoia, Andreessen Horowitz, Benchmark, or Accel, while less than 20 percent had raised from tier-one VCs in the random group, another significant difference observed among the two groups.

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From the perspective of an operations guy, there is a lot of riff-raff in venture capital: posers, herd mentality, technology infatuation, too much education, not enough experience to appreciate what grit and focus it takes to grow a business out of nothing. To have a fighting chance, you want to be with the best firms, and the best partners in tho

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Second, emerging fund managers tend to be made up of a smaller group of GPs or solo capitalists with strong industry insights and personal brand in a specific industry or trend, often when this is still nascent and overlooked by the established players.