Chris Dixon joined class on Thursday to speak about the Andreessen Horowitz investment criteria and operating model. I’ve read about the good, the bad, and the ugly when it comes to working with VCs. Two books I’ve personally found helpful to navigating the VC game are by Jeff Bussgang and Brad Feld. And Chris offered one model that summarizes what I’ve seen so far:
Tip #1: In-House networks are critical for each stage of a company. Sure, some VC’s like Fred Wilson stay away from angel investing, but a network of experienced strategist, designers, ex-CEOs, and investors should be a criteria in selecting a VC. Startups don’t always have a choice, but if you do, network over brand can really matter.
Tip #2: We live in a matrixed world, void of silos, and VC’s need to have a network outside their specific domain expertise. Real estate and financial technology interact with two major “unbundling” effects and two sectors that Fred Wilson previously described (check out my post on his talk). So having a VC adept at strategic partnerships and networks in each of these domains would be powerful. No, Chris Dixon himself may not be a designer + technologist + real estate expert, but his venture firm has that network.
Tip #3: In our talk, Chris said: “Think of startups not as a static and linear model but rather an idea maze. Some paths lead to a prize, other paths lead to danger. Good entrepreneurs think through the paths.” What Chris did not say, which was covered in our case about Andreessen, is that a VC should be helping you think about the dangerous paths. It could be regulatory, it could be trends, it could be operational, but VC’s should be far more than a bank account.
Brandon and I will have to think through the technical, design and market goals and advice we’d seek twelve months down the line. We’d be first time founders of a tech company, and Chris’ advice about his VC philosophy pushed us in the right direction to think about creating the best VC and founder dynamic.
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