The Business of Venture Capital: Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies, 2nd Edition

Preface

“If you are under the impression you have already perfected yourself, you will never rise to the heights you are no doubt capable of.”

—Kazuo Ishiguro, The Remains of the Day

In venture capital, what matters? Skill or luck? Maureen Wilcox could well be a very successful venture capitalist (VC). She bought two lottery tickets—one in Massachusetts and another across the state border in Rhode Island. Both tickets had winning numbers. Venture capital boils down to the ability of picking winners. Yet, no book can teach you how to pick winners or be a successful VC. At best, this is an attempt to develop and identify the framework for thought and action.

This book addresses the arc of a venture capital investment lifecycle. Fund raising, constructing a portfolio, identifying and investing in opportunities, roles of board members and more. My goal here is to inform, educate and, in some cases, even entertain. Over 50 leading experts have shared their views and practical advise. Findings from academic research papers have also been summarized. Dense formulas that contain Greek characters are not included, sorry nerds. Finally, I have also included lessons from my own experience of over a decade of investments.

Even as we live in the era of big data, nothing about venture capital investments is predictable or persistent. The correlation/causation debate continues. In analyzing performance of more than 2,300 funds between 1974 and 2010, over 250 funds returned more than 2X of ...