Category Archives: Books

Interesting times.

I just finished up reading The Four,  and I thoroughly enjoyed it. It is a quick read but I learned a lot and has me thinking anew about some things. The career advice is something I wish I had gotten in my 20’s. The way he lays out how to approach early jobs and the tradeoffs to take is solid advice. Looking back I could have played the field much better but I am super thankful I have landed where I am.

Exciting times at Jungle – that’s for sure :: https://www.dealstreetasia.com/stories/tencents-grace-xia-joins-singapore-vc-jungle-ventures-84746/

I am somewhat new to VC and still finding my way but grokking it fast and loving every second of it. It’s a new challenge everyday but at the same time I can easily see honing my craft for years to come and still finding it all exciting.

However the world of VC is changing and the old models or ways of doing things will and are changing. It is not just about capital anymore and on top of that the ICO market will alter the landscape even further. I will admit that the ICO model is still something I am trying to wrap my head around since the scam to not scam ratio is still pretty out of whack but this may change. However I envision alot of pain and lawsuits yet to come.

This post from Fred is a master class in reason though and not only reflects on a how he has put together his firm but also suggets how his firm is thinking about the future. I am going to read this over a few times – so much in there to take notes on.

http://avc.com/2017/10/our-model/

For anyone not realizing it – VC is the long game:

It is also important that all of our partners participate in this model. It takes seven or eight years before we can expect a new partner to contribute and Albert, who joined us in 2008, has produced the last two high impact exits with Twilio and MongoDB. John, who joined us in 2010, has already contributed one in Lending Club. I have no doubt that Andy, who joined us in 2012, and Rebecca, who joined us this week, will produce their share of high impact exits. Andy already has several in the pipeline.

I also love his view of the model:

So this is our model. Keep the fund sizes small. Make investments early so we can buy meaningful ownership for not a lot of money. Keep investing round after round to maintain and/or grow our ownership. And have enough high impact portfolio companies that we can get two or three of them per fund.

One take-away from Fred and that was echoed in The Four is:

But the market has changed a lot with large incumbents taking up more and more white space in the internet sector as we have known it.

This also scares me. I think about the dominance of the big guys and how this is affecting VC, tech and the world at large.

Not sure what to do about it.

The Four – the book is out!

I picked up my copy at the bookstore in Singapore but you can also order it on Amazon.

So far really enjoying it – total page turner.

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So far my favorite book of the year has been :: https://seedvc.blog/2017/06/27/shoe-dog-best-business-book-of-the-year/. Just couldn’t put it down till I finished it.

After hearing this latest podcast :: https://www.recode.net/2017/9/14/16303784/transcript-author-nyu-professor-scott-galloway-recode-decode-four-book-google-amazon-facebook-Apple.

I am anticipating that Galloway’s new book is going to be amaze balls and on obvious best seller.

For more of his writing, check his latest weekly email :: https://www.l2inc.com/daily-insights/no-mercy-no-malice/from-russia-with-likes

Enjoy the weekend!

Structured Financing

Over a quick bite today I continued to read the latest edition of Venture Deals, it has been enlightening to read it post working in VC for over a year now. I have been able to validate some of the principles first hand while gleaning a thing or two to help me in stuff I am currently dealing with.

I wrote, https://seedvc.blog/2017/09/07/take-a-discount/, the other day and was thinking more about the book in light of how some founders may not understand how various rounds of venture financing works.

A couple of things to note is that usually once you raise money – you will probably be raising until exit or profitability. So an angel round will turn into a seed round, which will lead to an A and most likely a B. Maybe somewhere in that mix you might exit or generate enough cash to no longer need to raise money. It could also be that venture financing makes way for debt financing instead. 

The point being that as you look at your very first fundraise, one must have a view to how the follow on rounds will work and the milestones you will achieve during the rounds. Usually this will map to burn rates and the hopeful product or revenue targets that match rounds and the end of cash cycles.

Being careful about valuations during this process is important but also realizing that more than one round will happen helps to put it all in context.

Long story short if you are a founder or thinkjng abor becoming one? Read the book before you start your fundraising journey since it will probably help you more than my ramblings.

Enjoy the weekend!

Shoe Dog – best business book of the year!

I remember a month or more back being in Kinokuniya with my kids on a book hunt and bumping into Vishal, 500 Startups (congrats on Kaufman BTW), while I was in line asking about a book I could not find. At the counter there was Shoe Dog by Phil Knight and I recall Vishal commenting on how good it was. I told him I would borrow his book when he was done with it. I think since then he has been on the road so I never did borrow that book.

This last month I have been in the states and during a camping trip through Oregon, our family stopped into a huge bookstore (forgot the name but it was awesome), and I saw Shoe Dog staring me down again. Given that the history of Nike centers around Oregon, I figured it only made sense to pick it up there and finally school myself in all things Nike. Wow. What a read.

I generally don’t love reading business books for some reason and although this is not really a business book – it really is one of the best business books I have read in a long time. I had no idea about the origin story of Nike, how it started with Onitsuka Tiger’s (which I love), how close it was to failing all the time, and the type of culture Phil created from day one – even if by accident. There are a ton of lessons in the book, so many that I almost think I need to read it again and take notes.

There was some stuff that really stood out though – the one thing that really impressed me was how Nike was somehow global in thinking from day one. They sought to manufacture overseas from the beginning and were one of the first big corporations to enter China. Phil always loved to travel and experience culture and he used this to get close to other leading figures in target nations to create a bond that could go the distance in business and in friendship. I was severely touched at the end when he recounts the small trips he would share or the private dinners at the houses of certain luminaries – Phil believes in treating people well and it obviously made a huge difference. Of course he also attributes success to some amount of luck or whatever word you prefer. Mine is karma. I believe what goes around comes around. Be kind.

It’s also humbling to see the many legal battles, financial issues and even the battle with his own government as the many hills a startup will climb on their way to making it. The sheer grit and determination is something that I think is missing in today’s tech startup world in some cases – although not all, but I feel that in today’s world we have replaced grit with just cutting corners, skirting the law, hacking or putting others down as a means to gain success. I am not trying to make an across the board comparison but I do think there are ways to get ahead or preservere while being good to your company and respectful of the competition. Not saying Phil is perfect in this regard but he is honest and the parts where he recounts coming to terms with being a sweat shop and how that transformed Nike is a gripping self assessment about how Nike can be a force for good or evil.

The biggest impact though has to be the thread that winds throughout the book discussing the core Nike team and the culture. On this subject I find the book to be a refreshing wakeup call. Phil obviously is a born leader and he made sure he lead and empowered his core team to do their part. One can look at all sorts of amazing leaders and their techniques but it is hard to argue with the success of companies where their leader knows how to hire great people and clear the decks for them to do great work. This core tenant can be practiced at virtually any company of any size. This is coupled with a culture of no bullshit – making sure there are forums for leaders to express themselves, debate and decide is also critical. Then to cap it off there is time set aside to have a beer, chat and further debate stuff that appears to have no easy answer. However you enable it – having some sanctioned down time where leaders get together to be normal and try to sort things out can be very healthy. Beer Friday, a bbq or whatever works to facilitate this – each to his own for how to make it happen.

This culture extends past the company though and into the partners, the suppliers and the customers. It was easy for this thread to touch me given what Phil created applies to my own career since this model works at a VC quite well. We have our own team, our LP’s, our startups and the connections in the ecosystem that all form a nucleus that benefit and feed from each other. Of course the overall view, I can’t sidestep this, is returns. If the startups we invest in do well – the entire network will benefit, but there will be good times and bad times and my hope is to have a guiding light that apart from trying to build returns – we can also just do our best to help. Karma. It still is one of the deciding factors.

I have a new found respect for Nike and might even pick up a pair to go with my Tiger’s and I am sure these shoes will have a deeper meaning after reading this book. Phil touches on going deeper on putting together a cleaner view on the history of Nike and I for one hope this stays on his bucket list.