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An Ideal Entrepreneur

From a venture capitalist’s point of view, the ideal entrepreneur:

  • delivers sales or technical advances such as FDA approval with reasonable probability,
  • tells a compelling story and is presentable to outside investors,
  • recognizes the need for speed to an IPO for liquidity,
  • has a good reputation and can provide references that show competence and skill,
  • understands the need for a team with a variety of skills and therefore sees why equity has to be allocated to other people,
  • works diligently toward a goal but maintains flexibility,
  • gets along with the investor group.

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The value of any individual to a VC is a function of the following conditions:

The initial period in a company’s life cycle in a profitable industry is a time of accelerated growth, except for the concept stocks that are experimental and require a lot of burning capital.

VC funds have investors in large institutions like pension funds, insurance companies and financial giants. They place only a small fraction of their funds into startups and high-risk investments.

Venture capital plays only a minor role in funding basic innovation. In 1997, VCs only invested 6%, or $600 million, went to startups. Around $1 billion of the total venture-capital pool went to R&D.

The venture capital industry has four main players: entrepreneurs who need funding; investors who want high returns; investment bankers who need companies to sell; and venture capitalists who make money for themselves by making a...

Funds are structured to guarantee partners a comfortable income while they work to generate those returns. 

Venture-funded companies attract talented people by appealing to a “lottery” mentality. Despite the high risk of failure in new ventures, engineers and businesspeople leave their jobs because they are unable or unwilling to perceive how risky a start-up can be. 

Assuming that each partner has a typical portfolio of ten companies and a 2,000-hour work year, the amount of time spent on each company with each activity is relatively small. 

By understanding how venture capital actually works, astute entrepreneurs can mitigate their risks and increase their potential rewards. Many entrepreneurs make the mistake of thinking that venture capitalists are looking for good ideas when, in fact, they are looking for good managers in particu...

Any basic deal structure has the same logic: Giving the investors in the VC fund both ample downside protection and a favourable position for additional investment if the company proves to be a winner.

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created 8 ideas

I am passionate about Investment and most importantly investing in businesses directly. Had a conversation with the VC Lab on the formation of my new Venture Capital firm and I needed to compare my fundraising strategy with what I can find on the internet, and that led me to this article by Harvard Business Review (One of my favourite places to go lol)

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Part II - DeepStash has made a real mess of my ideas somehow 🤗🥲

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