[No. 3] Brand and AUM

A startup can’t be expected to have moats in the early days, but it should have a strategy in place that gives it the best chance of having them in place by the time the uncertainty window runs out.

Of course, most of this is a self-fulfilling loop benefiting the brand-name VCs. The well-known firms get to see the best deals and can usually win them—and the cycle repeats itself. If a lesser-known VC is able to find and correctly identify a top deal, they may have a hard time winning the opportunity to invest. It is in the nonobvious cases that

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A firm’s brand as a proxy for a person’s reputation was born out of laziness and lack of access to data. No doubt, top talent enjoys working together, but it’s no longer a necessity. You are seeing this in spades right now within venture capital, as individual investors are banding together to support entrepreneurs who would prefer a group of hand-... See more

Reputational capital -- the way your name rings out in rooms you aren't even in, simply when your topic of expertise comes up. (Hopefully in a good way!)