#015 Qualities of a Top VC Pt. 3: Winning

Welcome to the third post in our five-part series of what makes a top venture capitalist based on insights from current and former partners at Sequoia, Benchmark, Kleiner Perkins, and a16z.  As a reminder, we will look at the following qualities of a good VC: 1. Sourcing 2. Picking 3. Winning the deal / being a good partner / adding value 4. Optimal Fund Size / Liquidity Strategies (when to sell) Today we will be looking at the traits venture capitalists need to have to win the partnership in the companies they choose to invest in. This is part three of the series. If you’re joining us for the first time, I suggest you check out pt. 1 on sourcing first. So far in this series, we’ve identified how top venture capitalists find great entrepreneurs and companies to invest in by being curious, constantly networking, and producing content as a beacon for entrepreneurs to find them.  Next, after you source hundreds of companies via both inbound and outbound strategies, you pick maybe a dozen or so per year to invest in. Top VCs pick the next great startups by avoiding FOMO but not bargain hunting, having both an open mind and a prepared mind, and being confident in their decisions. But all of that work is not enough to invest. You could spend hundreds of hours doing the above tasks to find that perfect company just for them to turn down your offer and go with your competitor. In this essay, we’ll cover the final piece of the puzzle for the lifecycle of an investment decision by winning the deal.  Typically, a founder chooses to work with a venture capitalist because the founder feels the venture capitalist will be a trustworthy partner and add value in some way or another. Maybe that VC started a company himself or herself and knows how to successfully scale a company, or maybe that VC is strictly an investor and will trust the entrepreneur to do whatever they feel is right, and the VC will solely act as a sounding board.  There’s a different appeal for every founder, but there are a few general traits that top venture capitalists share that help them invest in those exceptional companies they spent so long finding and analyzing.  In this post, I’m going to discuss how top VCs win the deal by:  Nailing the First Impression Being a Good Board Member  Having a Respectful Relationship with the Founder  I understand only one of these things comes before the founder makes a decision, but this section is about winning the deal by adding value and being a good partner, so the second and third points cover adding value and being a good partner. Usually, founders will make reference calls with other founders this VC has backed to vet that venture capitalist on their ability to add value and be a good partner. Therefore, it’s important a venture capitalist builds up this reputation because it will go into the founder’s decision.  More All Things VC: To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about what makes a top VC with quotes from firms like Sequoia, Benchmark, Kleiner Perkins, a16z, Initialized Capital, and Accel, head to allthingsvc.blog. You can also follow me on X @Justin_Pryor_ for more information I post throughout the week based on what I discussed in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss.

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