How to Raise Money with Marc Andreessen, Ron Conway, and Parker Conrad (HtSaS 2014: 9)

TL;DR

Raising venture capital is the easiest thing a founder will do compared to recruiting, sales, and growth. The key is to build a business so good investors can’t ignore you – make the business better, not the pitch. The most important factor for investors is extreme outlier potential (a single extreme strength) and they often tolerate serious flaws.

Key insights

• Venture capital is a game of extreme outliers: ~15 of 4000 VC-fundable companies generate 97% of returns in a given year; investors look for extreme strengths, not checkbox deals.
• “Invest in strength vs. lack of weakness” – companies with extreme strengths often have serious flaws; ruling out flawed companies eliminates most big winners.
• Ron Conway assesses founders within the first minute: leadership, rifle-focus, obsession with product, whether the idea came from a personal problem, communication skills, and born-leader traits.