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Secrets of Sand Hill Road

Venture Capital and How to Get It

By Scott Kupor
12-minute read
Audio available
Secrets of Sand Hill Road: Venture Capital and How to Get It by Scott Kupor

Secrets of Sand Hill Road (2019) unveils the inner workings of one of Silicon Valley’s most iconic streets. Many of the area’s top venture capital firms are located here and have played a part in funding some of the biggest names in tech today. VC insider Scott Kupor has worked with many of them, and these blinks share their secrets – allowing the rest of us to decipher the mystery of venture capital, how to get it and why it can make or break a company.

  • Founders and CEOs seeking advice on how to navigate the world of venture capital
  • Beginner venture capitalists looking for wisdom from an industry veteran
  • Tech enthusiasts curious about how their favorite apps came to fruition

Scott Kupor is managing partner at Andreessen Horowitz, one of the biggest names in venture capital, which holds more than $7 billion in assets. Over the years, they’ve invested in companies that have become household names, such as Facebook, Twitter, Airbnb and Groupon. Kupor also teaches courses on venture capital at Stanford University and co-founded the university’s Venture Capital Director’s College.

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Secrets of Sand Hill Road

Venture Capital and How to Get It

By Scott Kupor
  • Read in 12 minutes
  • Audio & text available
  • Contains 7 key ideas
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Secrets of Sand Hill Road: Venture Capital and How to Get It by Scott Kupor
Synopsis

Secrets of Sand Hill Road (2019) unveils the inner workings of one of Silicon Valley’s most iconic streets. Many of the area’s top venture capital firms are located here and have played a part in funding some of the biggest names in tech today. VC insider Scott Kupor has worked with many of them, and these blinks share their secrets – allowing the rest of us to decipher the mystery of venture capital, how to get it and why it can make or break a company.

Key idea 1 of 7

The nature of venture capital has changed over the last few decades.

Nearly half a century ago, in the early 1970s, Silicon Valley found itself host to a number of new businesses operating in the world of venture capital. For the next thirty years, a very small number of these companies held the vast majority of venture capital in Silicon Valley. This meant, of course, that a select few companies had a lot of power over which entrepreneurs received funding.

But starting in the early 2000s, all this began to change. Two converging phenomena started coming together, transforming the nature of the VC-entrepreneur relationship.

Firstly, rapid advances in technology meant that the amount of capital required to found a start-up began to decline. On one side, servers, networking and data center space were getting cheaper by the day; on the other, with the advent of cloud computing, start-ups no longer needed office space to store their data on-site, thus saving on rent. All of a sudden, founding a start-up was less reliant on VC backing than it had been in the past.

The second development that transformed the VC-entrepreneur relationship was the founding of the Y Combinator, or YC, in 2005. The YC is a school that teaches entrepreneurs how to found companies and secure VC funding. Famous alumni include the founders of Airbnb and Dropbox. The YC helped a once-dispersed entrepreneurial community come together to share knowledge and, in doing so, also helped even the balance of power between VC firms and entrepreneurs.

It was at this point that the author’s VC firm entered the scene. In 2009, investors Marc Andreessen and Ben Horowitz founded Andreessen Horowitz. Detecting a change in the Silicon Valley landscape, they realized that VCs needed to provide more than just capital to entrepreneurs. Sure, having CEOs with vision and good product-market fit was still as relevant as ever. But they might lack knowledge in other important areas like recruiting, marketing or sales.

This is where VCs like Kupor enter the equation. At Andreessen Horowitz, it’s his job to advise CEOs, particularly by helping them build networks and relationships with both people and institutions. In doing so, Andreessen Horowitz has concocted a winning formula that’s churned out several huge companies, such as Pinterest, Slack and GitHub.

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