The Little Book of Venture Capital Investing: Empowering Economic Growth and Investment Portfolios

Chapter Two

The VC Industry Today

We don’t care what stage a company is when we invest. In the last couple of years, the smallest we invested was $25,000 and the largest was $40 million, ranging from an idea on a napkin to a business that is already up and running.

—Jeremy Levine, Partner at Bessemer Venture Partners

One grand slam home run does not make you a Hall of Fame baseball player. When searching for a VC role model or mentor, it is more important to remember that it is easy to become impressed with those one-hit wonders who, whether by good timing or good luck, have had a “100+X bagger” or investment success. One big score is an historical event, but it is, in many cases, unrelated to the skill set required for long-term success in venture capital investing. That is an achievement marked by the repeatability of the successful exit in the prevailing and constantly changing investment climates. We should instead seek out the serial repeat players: those rare gems who are not just investing a fund’s money, but who also infuse the deal with their own intellectual capital, experience, and hard work. We want to find those power players who seem to have developed a sixth sense about achieving success.

Whether one is investing in a VC fund run by partners or making a direct investment run by a CEO, the key is not to be impressed with a single success or the power of their “branding.” The maxim “You are only as good as your last victory” is less applicable in the VC universe than ...