VCs are skilled at creating a narrative to explain their analysis. In this regard, I will argue that VCs are more like journalists and filmmakers than traditional financiers.

VC firms often come together in a deal by syndicating, meaning having multiple VC firms participate in an investment round.

Perhaps a more useful metaphor for the high growth strategy of venture capital is a moonshot. VCs are shooting for the moon. They are looking for rocket ships (startups) for which VCs will supply the fuel (cash) to get to a moon landing (exit) for the investment to pay off.

When VCs are assessing a market, we want to make sure that the pond is big enough for the startup to grow exponentially. An old rule of thumb is that there needs to be the potential for a $1B market to warrant a VC investment.

The best tool for estimating exit valuations is identifying comps, or comparables: other startups that have already exited.

scale. Is the improvement enough to compel customers to change behavior? This leads us to a third step in defining a value proposition: after identifying customer pain points being addressed by our better/faster/cheaper solution, we need to quantify the value that we are creating.

how easily other companies might enter the market, whether there are other types of products that could solve this problem and the relative power of buyers and sellers.

narratives. As VCs, the most basic decision we face daily is whether to invest in a startup. Will this be a good investment? A high risk/high return investment? A long- or short-term investment? The Razor does not answer any of these questions. It provides a vehicle for organizing our energies so that we can find the data and create a narrative

Let me emphasize the word empirical, which means, “based on, concerned with, or verifiable by observation or experience rather than theory or pure logic.”[31]