💰 Top 4 Curated VC Picks + Must-Read Top 3 Books for 03Jan2024
🗒️ Big VC Funds Are Underperforming Smaller Ones and Their Future Is Dim
Institutional Investor: Kevin Lalande, who founded two companies before attending business school, said he joined Austin Ventures in 2000 because it had a “better brand than any at the time” and was a great place to learn how to identify promising startups.
But the next year, Austin Ventures raised a $1.5 billion fund — only the sixth $1 billion-plus venture fund at the time. Lalande said that was a mistake, one that is still made today. It raised too much money and couldn’t keep up its performance, even with its respected brand and talent.
“That’s a lesson that the industry seems to have gotten better at over the last few years or over the last couple of decades, but then it constantly regresses. There is an assumption that somehow if you can raise a bigger fund, it must mean you have a better track record, or a better firm, or a better brand,” Lalande said.
🗒️ Startup funding has never been more binary, with an extreme divide between haves and have-nots
Business Insider:
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Venture investment has always been unequal with some startups raising gobs of money and others left in the cold.
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But investors say 2023 was unusual, with more extremes than they've seen before.
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The more binary fundraising environment has changed the job of both VCs and founders.
A few weeks ago, Ben Lerer, managing parter of Lerer Hippeau, a New York-based early-stage venture firm, set his sights on leading a young enterprise software startup's seed round. Given it has been a struggle for non-AI startups to raise capital in 2023, he did not expect much competition with other investors.
🗒️ Navigating VC: 6 Types Of VCs And Investors To Find Your Perfect Match
Forbes: If you define venture capital as risk capital provided to ventures by institutional or individual investors seeking high returns, there are 6 main types of VCs. Which one is right for you?
The Top 2% VCs.
They are the stars. According to former VC Andy Rachleff of Benchmark Partners, the top 2% earn 95% of VC industry profits because they invest in the few homeruns financed by VCs. And the top 20 VCs invest early and earn higher returns than those who invest later after the valuations have soared.
For entrepreneurs: The Top VCs often demand a higher share of ownership of the venture because entrepreneurs who get funding from the Top 2% VCs know that they have a better shot at building a unicorn. If your venture needs VC to grow, get it from the top 20 VCs but delay getting it from them to control your venture and keep more of the wealth created. Otherwise, you may not make much even if you have a home run (Truth About VC). However, since even the Top 20 fail about 80% of the time, the odds are that you are likely to have a failure.
🗒️ Come See us as CES 2024 Next Week
Trailyn VC: Happy New Year.
We will be attending CES 2024 from Wednesday, January 10th - Friday, January 12th, 2024. Reply to this newsletter if you would like to connect there.
Top 3 book summaries this week 📚
Great Business Teams by Howard Guttman
Great teams make great organizations. Average teams maintain the status quo, making average organizations. So what makes great business teams stand apart? Howard Guttman has the answers. Watch this summary to find out how you too can build great teams.
The One Thing by Gary Keller
What's the one thing you can do right now to change your life? The authors of this book suggest that instead of going after everything at once, successful people choose one activity that will bring the most reward.
21 Irrefutable Laws of Leadership by John Maxwell
John Maxwell has come up with 21 irrefutable laws of leadership, laws which if applied, can make us all more effective, more efficient and more successful leaders. The book covers all touch points in leadership and is so full of great content, it’s not possible to cover all 21 laws in just 12 minutes. So we’ve picked the five laws that we think will have the biggest impact on your business, and in your life.