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The Startup Game: Inside the Partnership between Venture Capitalists and Entrepreneurs
Entrepreneurs drive the future, and the last several decades have been a thrilling ride of astounding, far-reaching innovation. Behind this transformative progress are also the venture capitalists—who are at once the investors, coaches and allies of the entrepreneurs. William H. Draper III knows this story first-hand, because as a venture capitalist, he helped write it. For more than 40 years, Bill Draper has worked with top entrepreneurs in fabled Silicon Valley, where today’s vision is made into tomorrow’s reality. The Startup Game is the first up-close look at how the relationship between venture capitalists and entrepreneurs is critical to enhancing the success of any economy.
From a venture capitalist who saw the potential of Skype, Apollo Computer, Hotmail, OpenTable, and many other companies, come firsthand stories of success. In these pages, Draper explores how to evaluate innovative ideas and the entrepreneurs behind those ideas, and he shares lessons from Yahoo, Zappos, Baidu, Tesla Motors, Activision, Measurex, and more. Also, in revealing his on-the-ground account of how Deng Xiaoping brought China roaring into the modern world and how Manmohan Singh unlocked the creative genius of Indian entrepreneurs, Draper stresses the essential value of farsighted political leadership in creating opportunity.
The author also discusses his efforts to bring best practices of the venture capitalist/entrepreneur partnership to the social sector.
Written in an engaging narrative, and incorporating many of the author’s personal experiences, this book provides a much-needed look at how the world of venture capital and entrepreneurship works.
From a venture capitalist who saw the potential of Skype, Apollo Computer, Hotmail, OpenTable, and many other companies, come firsthand stories of success. In these pages, Draper explores how to evaluate innovative ideas and the entrepreneurs behind those ideas, and he shares lessons from Yahoo, Zappos, Baidu, Tesla Motors, Activision, Measurex, and more. Also, in revealing his on-the-ground account of how Deng Xiaoping brought China roaring into the modern world and how Manmohan Singh unlocked the creative genius of Indian entrepreneurs, Draper stresses the essential value of farsighted political leadership in creating opportunity.
The author also discusses his efforts to bring best practices of the venture capitalist/entrepreneur partnership to the social sector.
Written in an engaging narrative, and incorporating many of the author’s personal experiences, this book provides a much-needed look at how the world of venture capital and entrepreneurship works.
273 pages, Kindle Edition
First published January 4, 2011
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August 19, 2017
great book from one of the first venture capitalist who shared his principles, stories, approaches to working with entrepreneurs and in investing. the author was in the very beginning of venture investments who started the Drapper & Johnson Ventures along with his partner Pitch Johnson and then started Sutter Hill Ventures, one of the oldest venture capital firms.
The book tells the story of becoming a venture investor at earliest days (when Internent companies was not yet a big game) and, most important, the story of working with entrepreneurs and helping them to grow their business with venture capital, advice, connections, help with hiring. The author shares stories from his experience where he was involved into: Yahoo, Activision, United Nations, Rediff, Ramp Networks, Selectica, Hotmail (Tim Draper played the key role in Hotmail's growth), Skype, Baidu, Tesla, SpaceX, OpenTable, DivX and others. Author also describes how typical venture fund works, how exits work, shares lot of stories of collaboration (successful and unsuccessful) between venture capitalists and startup founders.
The author worked with entrepreneurs for decades and points to the most important things in startups: founders and the team, brains and education (founding your connections), energy and passion, expertise (that allows to have self-confidence), vision (but beware of vision with bad execution), integrity (that also is the foundation of the reputation), sense of humor. Focus on people, trust, team, don't forget background checks. Great venture capitalist helps with hiring, first customers, partners. More opportunities for investing are in Asia and in India.
The book tells the story of becoming a venture investor at earliest days (when Internent companies was not yet a big game) and, most important, the story of working with entrepreneurs and helping them to grow their business with venture capital, advice, connections, help with hiring. The author shares stories from his experience where he was involved into: Yahoo, Activision, United Nations, Rediff, Ramp Networks, Selectica, Hotmail (Tim Draper played the key role in Hotmail's growth), Skype, Baidu, Tesla, SpaceX, OpenTable, DivX and others. Author also describes how typical venture fund works, how exits work, shares lot of stories of collaboration (successful and unsuccessful) between venture capitalists and startup founders.
The author worked with entrepreneurs for decades and points to the most important things in startups: founders and the team, brains and education (founding your connections), energy and passion, expertise (that allows to have self-confidence), vision (but beware of vision with bad execution), integrity (that also is the foundation of the reputation), sense of humor. Focus on people, trust, team, don't forget background checks. Great venture capitalist helps with hiring, first customers, partners. More opportunities for investing are in Asia and in India.
September 21, 2011
As I wrote in my previous post on a few Indian tech start-ups, I just read The Startup Game by Bill Draper. In general, that kind of books is of average quality, this one is much above the average, though this is just my personal feeling. I like what is written and here my summary.
Bill Draper is one of the fathers of venture capital and belongs to a interesting genealogy. His father was a grandfather of VC and his son is currenlty an active investor
More in the chapters of my book about venture capital!
Draper’s book begins with Buck’s, one of the famous meeting places of Silicon Valley (SV). SV is known as an open environment, where people meet easily, and public places such as bars and restaurants have become famous for this. There was the Wagon Wheel Bar, there is Buck’s or Il Fornaio and a few more.
He also mentions -page 5- another famous component of the SV legend, the Garage. He explains how he missed Yahoo even if he visited their famous trailer donated by Stanford when “Yahoo was space-intensive”, a place “legendarily littered with overheating terminals, pizza boxes, dirty clothing and golf clubs”.
Clockwise: HP, Yahoo, Google and Apple garages.
Of course, if his book was about anecdotes only, Draper would be of small interest. He gives also many lessons. For example:
- Hire managers “ambitious enough to help…. Adventurous enough to take a flyer on an almost untested vision of the future.” - Page 8.
- “Don’t invest money you can’t afford to lose.” An important lesson about venture capital (Page 12)
- Again on what is venture capital, when he planned an investment in real estate in Hawai, a Rockefeller partner had him fly in NY: “We don’t need you to put our money in real estate and then collect a fee and a carry, to add insult to injury. We became a partner in DGA because you told us you were going to invest in technology and honest-to-god entrepreneurs. It would have been far and away the best investment DGA could have made… although I cannot disagree with his main point that we should have focused on opportunities in our own neighborhood.” (Page 27)
- On what is a good venture capitalist (page 30):
Good judgement
Record of success in another form of business
Warm and friendly personality
Intuitive sense of where the world is going
- On the venture capital model (page 41), when he asked about his son’s first six investments: “dead, dying, bankrupt, probably won’t make it, and not so good”
Uh-oh I said to myself. And what about the sixth investment, Tim?” I asked, trying to sound upbeat.
He looked up and paused. “Home run!”.
And he adds later, “a young man can succeed in venture capital with a small amount of money, a willingness to sift through a lot of chaff to get to the wheat, a tolerance for risk, and a reasonably good calibration of the potential of various entrepreneurs. It is also evident that luck plays a part, but the old adage comes to mind: the harder one works, the luckier one gets.”
- On the entrepreneurs (page 54): “[Arthur] Rock feels that the most important ingredient in any company is the brains, guts and vision of the leader. If the product turns out to be wrong, the visionary leader will come up with a new one. If the market shrinks, the leader will stir the whole team toward another one.”
- Then page 55: “the entrepreneurs with the lowest risk of failure are those who know their field intimately.” Then senior managers of a successful company backed by the same VC are second in importamce, then again those with the ability to recognize their own limits and agree that they can be replaced.
- On entrepreneurs and investors (page 64) , he nearly copies Don Valentine (see below). “A fifty-fifty attitude: VCs put all the money, entrepreneurs all the blood, sweat and tears.”
- Another legend of SV (and I think it is true) “SV is the home of the handshake. Your word is your bond – or you’re in trouble.” (page 99).
- Could there be something changed in the SV culture? I mean too much finance people and financial engineering? Draper mentions investors should keep their shares in a company (chapter 7, page 173), at least if they believe in the future growth potential of the company value. But when in it comes to Skype acquisition by eBay (page 188), Draper sold his stock at $45.21 through some complex combination of puts and calls in less than a week after the closing of the deal. When Skype was bought, eBay’s share was $44.96… Six months later, eBay was trading at $33 a share.
Finally, the top 10 avoidable mistakes by entrepreneurs (page 75) :
Creating overly optimistic projections
Underestimating timelines.
Trying to do everything yourself.
Failing to master the elevator pitch.
Not downsizing when necessary.
Being inflexible.
Not developing a clear marketing plan.
Building a board that consists only of friends.
Not taking action in a recession.
Not knowing the right was to approach venture capitalists.
He concludes with his vision of opportunities for the future (page 224):
- The quantum computer
- Synthetic life form
- Decode and reprogram information systems of biology
- Life science in general (diagnostics, therapeutics, medical devices, healthcare IT)
- Voice and storage will be free
- Small nuclear power plants (sic)
- Changes in transportation
In a simple conclusion; a good book where you will learn some good lessons from Silicon Valley and elsewhere (i did not mention Draper spent 10 years with the UN and then created the first VC firm in India, through Draper International).
Note: Don Valentine said about entrepreneurs and investors: “When people come as a team (usually it is three or four people and typically heavyweight on engineering), it is a complex process. But I think all of us have seen it in the earlier days, times when I can remember saying, “Well, look, we’ll put up all the money, you put up all the blood, sweat and tears and we’ll split the company”, this with the founders. Then if we have to hire more people, we’ll all come down evenly, it will be kind of a 50/50 arrangement. Well, as this bubble got bigger and bigger, you know, they were coming and saying, “Well, you know, we’ll give you, for all the money, 5 percent, 10 percent of the deal.” And, you know, that it’s a supply and demand thing. It’s gone back the other way now. But, in starting with a team, it’s a typical thing to say, well, somewhere 40 to 60 percent, to divide it now. If they’ve got the best thing since sliced bread and you think they have it and they think they have it, you know, then you’ll probably lose the deal because one of these guys will grab it.” Transcript of oral panel – the Pioneers of Venture Capital – September 2002
More on http://www.startup-book.com/2011/06/2...
Bill Draper is one of the fathers of venture capital and belongs to a interesting genealogy. His father was a grandfather of VC and his son is currenlty an active investor
More in the chapters of my book about venture capital!
Draper’s book begins with Buck’s, one of the famous meeting places of Silicon Valley (SV). SV is known as an open environment, where people meet easily, and public places such as bars and restaurants have become famous for this. There was the Wagon Wheel Bar, there is Buck’s or Il Fornaio and a few more.
He also mentions -page 5- another famous component of the SV legend, the Garage. He explains how he missed Yahoo even if he visited their famous trailer donated by Stanford when “Yahoo was space-intensive”, a place “legendarily littered with overheating terminals, pizza boxes, dirty clothing and golf clubs”.
Clockwise: HP, Yahoo, Google and Apple garages.
Of course, if his book was about anecdotes only, Draper would be of small interest. He gives also many lessons. For example:
- Hire managers “ambitious enough to help…. Adventurous enough to take a flyer on an almost untested vision of the future.” - Page 8.
- “Don’t invest money you can’t afford to lose.” An important lesson about venture capital (Page 12)
- Again on what is venture capital, when he planned an investment in real estate in Hawai, a Rockefeller partner had him fly in NY: “We don’t need you to put our money in real estate and then collect a fee and a carry, to add insult to injury. We became a partner in DGA because you told us you were going to invest in technology and honest-to-god entrepreneurs. It would have been far and away the best investment DGA could have made… although I cannot disagree with his main point that we should have focused on opportunities in our own neighborhood.” (Page 27)
- On what is a good venture capitalist (page 30):
Good judgement
Record of success in another form of business
Warm and friendly personality
Intuitive sense of where the world is going
- On the venture capital model (page 41), when he asked about his son’s first six investments: “dead, dying, bankrupt, probably won’t make it, and not so good”
Uh-oh I said to myself. And what about the sixth investment, Tim?” I asked, trying to sound upbeat.
He looked up and paused. “Home run!”.
And he adds later, “a young man can succeed in venture capital with a small amount of money, a willingness to sift through a lot of chaff to get to the wheat, a tolerance for risk, and a reasonably good calibration of the potential of various entrepreneurs. It is also evident that luck plays a part, but the old adage comes to mind: the harder one works, the luckier one gets.”
- On the entrepreneurs (page 54): “[Arthur] Rock feels that the most important ingredient in any company is the brains, guts and vision of the leader. If the product turns out to be wrong, the visionary leader will come up with a new one. If the market shrinks, the leader will stir the whole team toward another one.”
- Then page 55: “the entrepreneurs with the lowest risk of failure are those who know their field intimately.” Then senior managers of a successful company backed by the same VC are second in importamce, then again those with the ability to recognize their own limits and agree that they can be replaced.
- On entrepreneurs and investors (page 64) , he nearly copies Don Valentine (see below). “A fifty-fifty attitude: VCs put all the money, entrepreneurs all the blood, sweat and tears.”
- Another legend of SV (and I think it is true) “SV is the home of the handshake. Your word is your bond – or you’re in trouble.” (page 99).
- Could there be something changed in the SV culture? I mean too much finance people and financial engineering? Draper mentions investors should keep their shares in a company (chapter 7, page 173), at least if they believe in the future growth potential of the company value. But when in it comes to Skype acquisition by eBay (page 188), Draper sold his stock at $45.21 through some complex combination of puts and calls in less than a week after the closing of the deal. When Skype was bought, eBay’s share was $44.96… Six months later, eBay was trading at $33 a share.
Finally, the top 10 avoidable mistakes by entrepreneurs (page 75) :
Creating overly optimistic projections
Underestimating timelines.
Trying to do everything yourself.
Failing to master the elevator pitch.
Not downsizing when necessary.
Being inflexible.
Not developing a clear marketing plan.
Building a board that consists only of friends.
Not taking action in a recession.
Not knowing the right was to approach venture capitalists.
He concludes with his vision of opportunities for the future (page 224):
- The quantum computer
- Synthetic life form
- Decode and reprogram information systems of biology
- Life science in general (diagnostics, therapeutics, medical devices, healthcare IT)
- Voice and storage will be free
- Small nuclear power plants (sic)
- Changes in transportation
In a simple conclusion; a good book where you will learn some good lessons from Silicon Valley and elsewhere (i did not mention Draper spent 10 years with the UN and then created the first VC firm in India, through Draper International).
Note: Don Valentine said about entrepreneurs and investors: “When people come as a team (usually it is three or four people and typically heavyweight on engineering), it is a complex process. But I think all of us have seen it in the earlier days, times when I can remember saying, “Well, look, we’ll put up all the money, you put up all the blood, sweat and tears and we’ll split the company”, this with the founders. Then if we have to hire more people, we’ll all come down evenly, it will be kind of a 50/50 arrangement. Well, as this bubble got bigger and bigger, you know, they were coming and saying, “Well, you know, we’ll give you, for all the money, 5 percent, 10 percent of the deal.” And, you know, that it’s a supply and demand thing. It’s gone back the other way now. But, in starting with a team, it’s a typical thing to say, well, somewhere 40 to 60 percent, to divide it now. If they’ve got the best thing since sliced bread and you think they have it and they think they have it, you know, then you’ll probably lose the deal because one of these guys will grab it.” Transcript of oral panel – the Pioneers of Venture Capital – September 2002
More on http://www.startup-book.com/2011/06/2...
January 23, 2022
one of the last text convos i had w/ a girl i briefly dated a while ago included a photo she sent of a recent book haul, which featured this title. in a sentimentally-driven moment of spontaneity, i bought a copy of that book online a lil while ago, after we stopped talking lol.
most of the book felt like old school personal stories somewhat far removed from the contemporary landscape, making them kinda hard for me to relate to -- esp when considering the influence of nepotism in many of the anecdotes. there were still some insightful lessons learned from these stories tho, but they were kinda general, and more in sync w/ what you'd expect from any autobiography vs. from a more technical overview (the latter being what i was hoping for). some parts were hard for me not to skim.
all in all, i think my greatest takeaway was the brief history lesson via personal accounts on how silicon valley/vc developed, and what their early days looked like.
wonder what that girl thought of it lmao
most of the book felt like old school personal stories somewhat far removed from the contemporary landscape, making them kinda hard for me to relate to -- esp when considering the influence of nepotism in many of the anecdotes. there were still some insightful lessons learned from these stories tho, but they were kinda general, and more in sync w/ what you'd expect from any autobiography vs. from a more technical overview (the latter being what i was hoping for). some parts were hard for me not to skim.
all in all, i think my greatest takeaway was the brief history lesson via personal accounts on how silicon valley/vc developed, and what their early days looked like.
wonder what that girl thought of it lmao
January 4, 2018
Автор, Уильям Дрейпер, один из первый венчурных предпринимателей Калифорнии, написал отличную книгу про стартапы, историю зарождения и развития венчурного инвестирования "Кремниевой долины". Много интересных историй и примеров развития и становления больших ИТ компаний долины. Книга будет интересной и познавательной не только всем, кто работает в стартапах, но и простым читателям не связанных с ИТ индустрией.
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The author, William Draper, one of California's first venture capitalists, wrote an excellent book about start-ups, the history of the origin and development of venture capital investment in the Silicon Valley. Many interesting stories and examples of the development and formation of large IT companies in the valley. The book will be interesting and informative not only to everyone who works in start-ups, but also to ordinary readers of non-IT-related industries.
I read books on Scribd and Google Books by
Readlax Chrome Extension
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The author, William Draper, one of California's first venture capitalists, wrote an excellent book about start-ups, the history of the origin and development of venture capital investment in the Silicon Valley. Many interesting stories and examples of the development and formation of large IT companies in the valley. The book will be interesting and informative not only to everyone who works in start-ups, but also to ordinary readers of non-IT-related industries.
I read books on Scribd and Google Books by
Readlax Chrome Extension
June 6, 2016
The book is like 10% info relevant and important to startups and 90% self-congratulatory autobiography that no one asked for. Gave me some good insight as to how VC culture works, at least -- lots of privileged, self-absorbed white guys at the helm.
October 31, 2022
Este libro lo encontré en las estanterías de la pequeña biblioteca del Hub donde trabajo. Me llamó la atención ver el nombre de Bill Draper en la autoría, y decidí tomarlo prestado.
Me he llevado una medio decepción al terminarlo, quizá porque mi vara de medir venía establecida por el que quizá sea, en mi opinión, uno de los mejores libros sobre VC: Secrets of Sand Hill Road, de Scott Kupor. Me esperaba que Draper se metiera más en los entresijos de la industria, en vez de convertir el libro en su autobiografía, llena de hazañas y logros que, en muchas ocasiones, poco tienen que ver con el venture capital.
En el libro, Draper nos narra su historia a través de los 9 capítulos que lo componen. Su padre fue William Henry Draper, fundador de Draper, Gaither y Anderson, la primera empresa dedicada al VC, y primer embajador de la OTAN. Bill Draper se graduó en Harvard y estudió en la universidad de Yale (casualmente fue compañero de pupitre de George Bush).
Tras la universidad, comenzó a trabajar en Chicago, en la Inland Steel Company, hasta que dejó ese trabajo para formar parte de Draper, Gaither y Anderson. Ahí fue donde empezó a aprender sobre la industria del venture capital hasta que formó su propia compañía, Sutther Hill Ventures, con Pitch Johnson, uno de sus excompañeros en Inland. Shutter Hill Ventures sigue siendo, a día de hoy, uno de los principales fondos VC.
Draper también nos cuenta su experiencia en Washington DC como presidente del Export-Import Bank of the US y su participación en el Programa de Desarrollo de Naciones Unidas.
Viendo el enorme potencial que tenía la India, Draper y Robin Richards fundaron Draper International en 1994, el primer VC de Estados Unidos con mandato de inversión en India. Richards también ayudó a Draper a fundar su fundación de ayuda a organizaciones sin ánimo de lucro, Draper Richards Kaplan Foundation (dedica todo un capítulo, el 8, a su experiencia financiando este tipo de organizaciones y lista todas las organizaciones que han financiado en el anexo al final del libro).
A pesar de estar centrado principalmente en la vida de Draper, los capítulos 2, 3 y 7 del libro ofrecen claves interesantes de la industria y la interacción entre los fondos y las startups (motivo por el cual elegí el libro, despistado por su título, Inside the Partnership Between Venture Capitalists and Entrepreneurs...).
El capítulo 2, "How It Works", es un buen resumen de cómo funciona, a grandes rasgos, la industria del venture capital. Draper divide el capítulo en 5 secciones: los fundadores, el equipo, el pitch, producto y mercado, el deal y la relación entre VC y startup. Este capítulo es muy útil para aquellos que no conozcan nada de este mundo, y Draper lo explica de forma muy simple y amena, ya que mezcla conceptos técnicos con ejemplos basados en la experiencia de inversión de Shutter Hill.
El tercer capítulo, "What It Takes", es un recopilatorio de todas las cualidades que necesitan, tanto los emprendedores como los inversores, para tener éxito con sus proyectos empresariales. Energía, pasión, experiencia, visión, capacidad de ejecución e integridad son algunos de los atributos que Draper lista en este capítulo. No son características demasiado originales (él mismo lo reconoce).
Uno de los capítulos que más me ha gustado es "Finding the Exit", en el que Draper nos aconseja sobre el proceso de venta de la empresa, ya sea vía IPO o venta privada a un grupo más grande.
He valorado muy positivamente el punto de vista que defiende Draper respecto a las IPO, argumentando que algunas de las empresas más exitosas y mejor gestionadas son privadas (entendiendo como privadas aquellas compañías que no cotizan en los mercados de valores). Este es un punto controvertido en los sectores de mayor crecimiento en la actualidad, como el sector espacial, en el que en los últimos 2 años se han llevado a cabo muchas salidas a bolsa vía SPAC (Special Purpose Acquisition Company), a unas valoraciones tremendamente infundadas y poco realistas. La gran mayoría de estas compañías han visto como, de media, un 85% del valor de sus acciones se ha volatilizado como resultado de una combinación de subida de tipos y ajuste de expectativas sobre las principales cifras de negocio. Draper nos advierte sobre los peligros de salir a bolsa e incluso nos da una guía de preguntas básicas a realizarnos antes de comenzar el proceso (si realmente necesitamos los fondos, si el dinero será suficiente, preguntas sobre el market timming, estrategia de adquisiciones, atracción y retención de talento...). Diría que este es, probablemente, el capítulo que mas útil me ha resultado.
El libro finaliza con una reflexión general sobre el estado y futuro del venture capital y los sectores que más potencial tendrán en los próximos años, además de un epílogo escrito por el hijo de Bill Draper, Tim Draper.
Es curioso como, estando escrito en el 2011, algunas de las tecnologías que vislumbra Draper ya son una realidad 10 años después, como las videollamadas generalizadas (Teams, Zoom y otros, beneficiados por el COVID) y los coches eléctricos (en algunas ciudades de Estados Unidos y norte de Europa se ven más Teslas que Toyotas).
Me he llevado una medio decepción al terminarlo, quizá porque mi vara de medir venía establecida por el que quizá sea, en mi opinión, uno de los mejores libros sobre VC: Secrets of Sand Hill Road, de Scott Kupor. Me esperaba que Draper se metiera más en los entresijos de la industria, en vez de convertir el libro en su autobiografía, llena de hazañas y logros que, en muchas ocasiones, poco tienen que ver con el venture capital.
En el libro, Draper nos narra su historia a través de los 9 capítulos que lo componen. Su padre fue William Henry Draper, fundador de Draper, Gaither y Anderson, la primera empresa dedicada al VC, y primer embajador de la OTAN. Bill Draper se graduó en Harvard y estudió en la universidad de Yale (casualmente fue compañero de pupitre de George Bush).
Tras la universidad, comenzó a trabajar en Chicago, en la Inland Steel Company, hasta que dejó ese trabajo para formar parte de Draper, Gaither y Anderson. Ahí fue donde empezó a aprender sobre la industria del venture capital hasta que formó su propia compañía, Sutther Hill Ventures, con Pitch Johnson, uno de sus excompañeros en Inland. Shutter Hill Ventures sigue siendo, a día de hoy, uno de los principales fondos VC.
Draper también nos cuenta su experiencia en Washington DC como presidente del Export-Import Bank of the US y su participación en el Programa de Desarrollo de Naciones Unidas.
Viendo el enorme potencial que tenía la India, Draper y Robin Richards fundaron Draper International en 1994, el primer VC de Estados Unidos con mandato de inversión en India. Richards también ayudó a Draper a fundar su fundación de ayuda a organizaciones sin ánimo de lucro, Draper Richards Kaplan Foundation (dedica todo un capítulo, el 8, a su experiencia financiando este tipo de organizaciones y lista todas las organizaciones que han financiado en el anexo al final del libro).
A pesar de estar centrado principalmente en la vida de Draper, los capítulos 2, 3 y 7 del libro ofrecen claves interesantes de la industria y la interacción entre los fondos y las startups (motivo por el cual elegí el libro, despistado por su título, Inside the Partnership Between Venture Capitalists and Entrepreneurs...).
El capítulo 2, "How It Works", es un buen resumen de cómo funciona, a grandes rasgos, la industria del venture capital. Draper divide el capítulo en 5 secciones: los fundadores, el equipo, el pitch, producto y mercado, el deal y la relación entre VC y startup. Este capítulo es muy útil para aquellos que no conozcan nada de este mundo, y Draper lo explica de forma muy simple y amena, ya que mezcla conceptos técnicos con ejemplos basados en la experiencia de inversión de Shutter Hill.
El tercer capítulo, "What It Takes", es un recopilatorio de todas las cualidades que necesitan, tanto los emprendedores como los inversores, para tener éxito con sus proyectos empresariales. Energía, pasión, experiencia, visión, capacidad de ejecución e integridad son algunos de los atributos que Draper lista en este capítulo. No son características demasiado originales (él mismo lo reconoce).
Uno de los capítulos que más me ha gustado es "Finding the Exit", en el que Draper nos aconseja sobre el proceso de venta de la empresa, ya sea vía IPO o venta privada a un grupo más grande.
He valorado muy positivamente el punto de vista que defiende Draper respecto a las IPO, argumentando que algunas de las empresas más exitosas y mejor gestionadas son privadas (entendiendo como privadas aquellas compañías que no cotizan en los mercados de valores). Este es un punto controvertido en los sectores de mayor crecimiento en la actualidad, como el sector espacial, en el que en los últimos 2 años se han llevado a cabo muchas salidas a bolsa vía SPAC (Special Purpose Acquisition Company), a unas valoraciones tremendamente infundadas y poco realistas. La gran mayoría de estas compañías han visto como, de media, un 85% del valor de sus acciones se ha volatilizado como resultado de una combinación de subida de tipos y ajuste de expectativas sobre las principales cifras de negocio. Draper nos advierte sobre los peligros de salir a bolsa e incluso nos da una guía de preguntas básicas a realizarnos antes de comenzar el proceso (si realmente necesitamos los fondos, si el dinero será suficiente, preguntas sobre el market timming, estrategia de adquisiciones, atracción y retención de talento...). Diría que este es, probablemente, el capítulo que mas útil me ha resultado.
El libro finaliza con una reflexión general sobre el estado y futuro del venture capital y los sectores que más potencial tendrán en los próximos años, además de un epílogo escrito por el hijo de Bill Draper, Tim Draper.
Es curioso como, estando escrito en el 2011, algunas de las tecnologías que vislumbra Draper ya son una realidad 10 años después, como las videollamadas generalizadas (Teams, Zoom y otros, beneficiados por el COVID) y los coches eléctricos (en algunas ciudades de Estados Unidos y norte de Europa se ven más Teslas que Toyotas).
July 24, 2025
This book recounts the story and learnings of 3 generations of Venture Capitalists, with special focus on William Draper III, the "intermediate" one. It is clear this dynasty has not only made a huge dent, but also helped shape how funds finance innovation in the XX century and beyond, being as they were the first Limited Partnership venture in the world. Much of the insights that went into this stem from their involvement in public office and international affairs, being as they were collectively involved in heading the Marshall Plan, holding office in the Truman and Regan administrations as well as the United Nations Development Programme.
William comes across as a likeable and grounded person, with a heart for the entrepreneurs he supports, especially if they originate from less privileged segments (like women or expats). This is quite far removed from the general idea of VCs being a cutthroat boy's club. Maybe it is, but not on the author's watch.
I liked the book, that touched on key tenets of investment, while weaving them into the Draper story. Spreading your bets, being resilient (but not obstinate) on your investments and betting on the people first, are all good stuff. He also offers advise to founders on how not to surprise your board and "the top 10 mistakes of entrepreneurs". You also are treated to historical changes that shuffled the cards (like 1994, when pension funds were allowed to invest in VC) which was, again, very interesting.
Being, as it is, not too long to boot - I would certain recommend the book - especially for their historical interest, of knowing the genesis of VC as far back as the first half of the twentieth century. Still, I knocked a couple of stars off the rating because there was a middle section that was less interesting to me, where the author delves too much into his "missing" years where he was away from investment. While it does provide context, I found my mind wandered during chapter 4 and 5 a bit too much. You mileage may vary.
William comes across as a likeable and grounded person, with a heart for the entrepreneurs he supports, especially if they originate from less privileged segments (like women or expats). This is quite far removed from the general idea of VCs being a cutthroat boy's club. Maybe it is, but not on the author's watch.
I liked the book, that touched on key tenets of investment, while weaving them into the Draper story. Spreading your bets, being resilient (but not obstinate) on your investments and betting on the people first, are all good stuff. He also offers advise to founders on how not to surprise your board and "the top 10 mistakes of entrepreneurs". You also are treated to historical changes that shuffled the cards (like 1994, when pension funds were allowed to invest in VC) which was, again, very interesting.
Being, as it is, not too long to boot - I would certain recommend the book - especially for their historical interest, of knowing the genesis of VC as far back as the first half of the twentieth century. Still, I knocked a couple of stars off the rating because there was a middle section that was less interesting to me, where the author delves too much into his "missing" years where he was away from investment. While it does provide context, I found my mind wandered during chapter 4 and 5 a bit too much. You mileage may vary.
October 14, 2019
It's more of a biography rather than an in-depth focus on startups; there are stories not related to startups but the lessons from these somehow correlates with the others.
It gives an interesting perspective on how startups look like, in the eyes of venture capitalists, through great stories of success (and a bit of the failures as well). It also tells how this branch of the industry, entrepreneurship and venture investment, evolved over time, i.e. across three generations.
Although it is common knowledge that the startup game is risky business, the book brings a note of positivity to it, which could potentially bring courage, and spark motivation to aspiring entrepreneurs.
It gives an interesting perspective on how startups look like, in the eyes of venture capitalists, through great stories of success (and a bit of the failures as well). It also tells how this branch of the industry, entrepreneurship and venture investment, evolved over time, i.e. across three generations.
Although it is common knowledge that the startup game is risky business, the book brings a note of positivity to it, which could potentially bring courage, and spark motivation to aspiring entrepreneurs.
December 16, 2021
A book that uncover lots of stories and firsthand experiences about venture capital and startups, up to the non-profits. A good read, I like how he created some chapters to emphasize the important of using insights and experiences of his for social and those in need. Can really see his honesty and integrity in helping less developed (or underdeveloped) society.
January 10, 2019
If you want to learn about venture capital, only chapter 2: "How it Works" is relevant - the rest are his personal stories.
January 3, 2020
Some interesting insights about the VC world.
April 13, 2011
I like the stories about specific companies, though there wasn't enough on failures- the failure to success rate for each venture is maybe about 5-10 to 1 but the coverage in this book reverses that ratio.
Overly positive and un-self-critical attitude of entire book is wearisome, maybe a book written by a journalist instead of this borderline auto-biography would be more balanced.
The chapters that weren't about venture capital or lacked detail weren't very good. There are probably a million different books that talk about the need for vision, ambition, integrity, or other qualities that don't need to be rehashed here.
Interesting criticism of the repeal of the Glass-Steagal Act, which paved the way for the recent financial crisis but also was bad for new businesses: there were four critical investment banks that were highly attuned to the needs of new companies desiring an IPO, but the large commercial banks that bought them cared little for the small investment opportunities they specialized in.
Overly positive and un-self-critical attitude of entire book is wearisome, maybe a book written by a journalist instead of this borderline auto-biography would be more balanced.
The chapters that weren't about venture capital or lacked detail weren't very good. There are probably a million different books that talk about the need for vision, ambition, integrity, or other qualities that don't need to be rehashed here.
Interesting criticism of the repeal of the Glass-Steagal Act, which paved the way for the recent financial crisis but also was bad for new businesses: there were four critical investment banks that were highly attuned to the needs of new companies desiring an IPO, but the large commercial banks that bought them cared little for the small investment opportunities they specialized in.
June 14, 2016
An interesting read, but very light on specifics. From the title and description, I was hoping this book would get into the details around pre-funding work by founders, business plans, funding rounds, term sheets, negotiation points and opposing perspectives, etc., but other than a few passing references to the venture capitalist funding structure, these topics aren't really explored.
I would summarize a large part of the book as follows: "I met these founders through [insert name drop], I decided to invest in their company, most of the time the investment returned a lot of money."
I'd recommend this book if you are in interested in some of the historical background of the venture capital community in Silicon Valley, but as a resource to entrepreneurs looking for insight into the mechanics of raising funds from venture capitalists, this book is of limited use.
I would summarize a large part of the book as follows: "I met these founders through [insert name drop], I decided to invest in their company, most of the time the investment returned a lot of money."
I'd recommend this book if you are in interested in some of the historical background of the venture capital community in Silicon Valley, but as a resource to entrepreneurs looking for insight into the mechanics of raising funds from venture capitalists, this book is of limited use.
January 10, 2012
Fabulous insights from one of the most eminent venture capitalists who also is a terrific storyteller. This book is replete with sage advice on characteristics to seek when selecting a business partner, appraising leadership talent, and common mistakes to avoid.
There are some memorable quotes sprinkled throughout the books and some of my favorites are listed below.
* Mark Twain: "Why not go out on a limb? That's where the fruit is."
* Japanese proverb: "Vision without action is a daydream. Action with vision is a nightmare."
* John Milton: "Tomorrow to fresh woods and pastures new."
I was also pleased to see my friend, Anne Marie Burgoyne, often mentioned in the chapter on philanthropy :)
There are some memorable quotes sprinkled throughout the books and some of my favorites are listed below.
* Mark Twain: "Why not go out on a limb? That's where the fruit is."
* Japanese proverb: "Vision without action is a daydream. Action with vision is a nightmare."
* John Milton: "Tomorrow to fresh woods and pastures new."
I was also pleased to see my friend, Anne Marie Burgoyne, often mentioned in the chapter on philanthropy :)
May 6, 2012
Highly informative for someone without deep industry knowledge about VC. Highly informative to learn about the key traits VCs look for, to understand the relationship between VCs and their fundees, and the startup space. It dwelt more on the biographical and philosophical than I expected, but I enjoyed the heavy emphasis on strong moral fiber and ethics within business. In particular, I was interested in the last chapter on the Draper Richard Foundation.
November 28, 2012
If you are looking for how to be an entrepreneur or venture capitalist this isn't the book for you, but if you are looking for intimate details and enriching stories in the lives of some of the greatest entrepreneurs and venture capitalists then this is where to get it. It is very much an autobiographical book which I found interesting, but I can see where some people might be looking for the keys to success and be disappointed.
February 9, 2011
A neat story from the family that founded venture capital (father), that launched the first international VC fund (writer) and launched the first international VC network (the son) - PLUS interesting journeys into some of the history of the 20th century - such as the Berlin Lift, Marshal Plan. One of the few books in this category that would interest my business colleagues AND my Dad !!
Read
March 19, 20113/18/11 finished. Read first 8 chapters; skimmed rest. Gained insight into Draper's character, networking vital in vc/startup environment; traits of good leader other things vc's look for. Better understand funding rounds.
Can not wait to share info in next interview, of course, to impress. :)
Just skimming for networking ideas.
Can not wait to share info in next interview, of course, to impress. :)
Just skimming for networking ideas.
June 8, 2012
Read at the risk of finding yourself liking an adorable Republican.
It won't change your life or enable you to instantly found, run, or even find a multimillion dollar business, so approach with realistic expectations. This is a candid, civilized, very personal, introductory take on the life of a Silicon Valley VC from one of the men who invented the job description.
It won't change your life or enable you to instantly found, run, or even find a multimillion dollar business, so approach with realistic expectations. This is a candid, civilized, very personal, introductory take on the life of a Silicon Valley VC from one of the men who invented the job description.
Read
January 13, 2011Just finished reading my Uncle Bill's new book and it was quite fun! If you or anyone you know is an entrepreneur, this is a good combo business book/memoir. And if you're interested in great stories of the financial founding of Silicon Valley, he's the one to tell the stories. Enjoy!
February 12, 2014
I liked this book for two reasons:
- Insight into how Silicon Valley works, and its history as well as where it is headed.
- Knowledge about the VC industry, as well as what's in an entrepreneurial DNA.
I think its a quick read with interesting stories.
- Insight into how Silicon Valley works, and its history as well as where it is headed.
- Knowledge about the VC industry, as well as what's in an entrepreneurial DNA.
I think its a quick read with interesting stories.
June 17, 2011
The author's tone is so smug and self-congratulatory that the book is unreadable. Would not recommend under any circumstance
Read
March 12, 2011Inspiring and instructive.
March 15, 2012
Half autobio, half insights into startups. The part that I liked the most was on social ventures.
January 7, 2013
Fantastic and fun - more of an autobiography than a tutorial but definitely worth reading for anyone living in/interested in Silicon Valley and its history.
April 15, 2013
great first-person view of the world of venture capital financing
April 2, 2015
I thought this book would be much more detailed and into the specifics of the venture capital industry. It's still an interesting read, no doubt, but it's more a biography than a technical read.
August 7, 2015
An excellent overview of Startups and Venture Capital. A lot of the content I found fascinating but may not be of practical use to many readers. Overall it was a great read...
April 17, 2016
Gives a good overview of Draper family, VC, deals.
January 30, 2017
A strange combination of memoir and advice. Moderately useful. The author does a little too much name-dropping and is a little too impressed with credentials.
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