Venture Capital Strategy: How to Think Like a Venture Capitalist

with potential customers, getting their feedback and responding quickly to their needs.

company builders, not financiers. We

VCs may begin imposing strategic direction toward becoming the perfect acquisition target while founders are focused on creating the most sustainable company.

Splitting the investment across multiple rounds is helpful in two ways: risk mitigation and opportunism.

startup could be addressing a compelling market need, have the right team in place in an attractive industry, yet still the math might not work.

VCs maintain extensive networks to create deal flow. Startup referrals can come from any of the various constituencies VCs regularly work with: serial entrepreneurs, industry experts, limited partners, startup attorneys, portfolio company

If we have the chance to create significant switching costs, that is, create a very sticky product, then there is an incentive to raise a lot of capital as early as possible to get as many customers as possible.

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 tha

entrepreneurial strategy,

VCs are looking for a curious mix of character traits in a founder. We want confidence and optimism, but we also require coachability and collegiality. We want to know the founder has a headstrong vision, but we’ll also need to be able sit down together to make tough decisions about future funding rounds and exit opportunities.