Opinion
Kleiner Perkins collapsed because it relied on stars over institutional culture
“Where you have brilliant individuals, when those people go off the boil, or they retire, or whatever, the performance is going to collapse. And that's sort of what happened with Kleiner Perkins. They had two amazing investors, Vinod Kostler and John Doerr. Vin…”
Prediction Not checkable as stated
Tiger Global's 2021 fund will be a long, grueling struggle
“So the current fund has either got to be a big down fund, or they're going to eke it out. I suspect that's more likely. They're just going to take the time they need, redeploy money, move it around, ultimately return capital to investors, but it's going to be …”
Prediction Not checkable as stated
Silicon Valley firms may be forced to separate their China operations
“Companies in Silicon Valley that have built big operations in China may face a point where they need to separate the two brands.”
Assertion Not checkable as stated
Don Valentine's intervention at Atari birthed hands-on venture investing
“So he got into the hot tub, and he imposed discipline on that chaotic business culture. He took the genius of their games, and he compounded it and married it with a determination to actually make an organization that functioned. So Atari went from chaos to a …”
Insight
Late-stage VC is a beta game that gets crushed in downturns
“Because basically, late stage is a game where it goes great when you're harvesting beta and the market's going up, so beta is positive, and you get killed when it goes down.”
Assertion Not checkable as stated
Europe today is no more anti-entrepreneurial than the 1950s US
“Europe's current commercial climate is no more anti-entrepreneurial than the US was in the 19 fifties.”
Assertion Supported
Women comprise 16% and African Americans 3% of Silicon Valley VCs
“Venture investors in Silicon Valley and find that 16% only are women. That's an absurdly low number. And if you look at the proportion who are African-American, it's only three percent, and that's a crazy low number.”
Insight
Advising young people to pursue passion over money is dangerous
“I think that's dangerous advice given by people for whom money doesn't matter because they've already got plenty. I actually think that money does matter, and you need to be realistic when you're 20 or 22 or whatever it is about choosing a pursuit that will gi…”
Insight
Venture capital differs from traditional finance by only targeting tail events
“Rather than being accused of ignoring tail events, as people in public markets are sometimes accused, these people at venture capital partnerships only care about tail events. It's all about that extreme disruptive, 10 X, 20 X Outlier. And the middle of the di…”
Assertion Not checkable as stated
Arthur Rock built the first modern venture capital fund
“Arthur Rock, who was the pioneer of West Coast venture capital, because he was the one who was the first then to set up a fund that succeeded, that we would recognize as similar to the funds that we see today. And he was also the first one to really Invest in …”
Insight
VCs must know 90% of an entrepreneur's pitch in advance
“When an entrepreneur comes to see you need to know 90% of what they're going to say before they open their mouth.”
Assertion Not checkable as stated
Sequoia formally uses decision science in capital allocation
“Sequoia, the top venture capital partnership in the world probably, Has formally incorporated decision science into the way it allocates capital.”
Assertion Not checkable as stated
Sequoia investment memos require 'pre-parade' sections outlining maximum upside
“The way that Sequoia addresses this bias is that it says when you're going to write a memo to the partnership about a startup that you think we should back, the investment memo, it must include a pre-parade section, meaning the section where you dream about ho…”
Assertion Supported
An early IPO increases a VC's subsequent IPO probability by only 1.6%
“The academic studies on this suggest that if you have a IPO in one of your early bets, yes, the likelihood of later bets turning into IPOs is up a bit, but it's up sort of 1.6%.”
Assertion Supported
Newer VC ecosystems like China are more gender diverse than the US
“And it's interesting to me that ecosystems that got started later, for example, China, are more gender diverse than the US one has been.”
Insight
Big Tech critics should strongly support VC-backed startups
“I argue that if you don't like big tech, you should be very in favor of small tech, which challenges the power of the platform monopoly.”
Assertion Not checkable as stated
Sequoia and Kleiner Perkins pioneered hands-on venture investing in the 1970s
“And these two companies, Sequoia and Kleiner Perkins, improvised two things in the 19 seventies. The first was this hands-on approach. Arthur Rock had been a financier by background. He had been important in things like devising equity stock options and devisi…”
Assertion Supported
Andreessen Horowitz operates an in-house consulting agency for portfolio companies
“Andreessen Horowitz takes this to the extreme by having really a big quasi-consulting operation under its own roof. That is there to go off and help entrepreneurs streamline things like, how do you find office space? Well, we've got someone to help with that. …”
Assertion Supported
Benchmark allocates equal carry to newly hired and senior partners
“Benchmark says that it achieves the same effect because it has this equal partnership structure where If there are six partners, let's say, and they bring in the seventh, even if the seventh is inexperienced and younger and so forth, that new partner gets the …”
