The Way of the VC

Venture Capital funds are the fastest growing sector of the financial industry, and possibly the least understood. In this book, the author provides a primer on what some of the world's best venture capitalists have in common. How do the world's top venture capitalists consistently obtain supernormal returns? How do they add value to entrepreneurs they have backed? Why is a top venture capitalist like a skilled chef? How did Lip Bu Tan, when he was Chairman of Walden, manage to invest in Creative Technology, despite the CEO's aversion for VCs? How did Nam Ho, Founder and Managing Partner of Altos Venture, turn an introduction by a Stanford Business School professor into a venture capital firm managing a quarter billion dollars of capital? How does Bing Gordon, Partner at Kleiner Perkins Caufield & Byers and author of the business plan that resulted in KPCB's investment in Electronic Arts, time exits properly? Why did Soo Boon Koh, Managing Director of IGlobe Ventures, back a GPS company which was filing for Chapter 11, in the post 9-11 market? The Way of the VC: Having Top Venture Capitalists on Your Board is essential reading for venture capital practitioners, including partners, principals, analysts, consultants and limited partners--both institutional and private. It is also useful to students of finance who want a better understanding of what goes on in the venture capital world.

Venture Capital funds are the fastest growing sector of thefinancial industry, and possibly the least understood. In thisbook, the author provides a primer on what some of the world's bestventure capitalists have in common. How do the world's top venturecapitalists consistently obtain supernormal returns? How do theyadd value to entrepreneurs they have backed? Why is a top venturecapitalist like a skilled chef?* How did Lip Bu Tan, when he was Chairman of Walden, manage toinvest in Creative Technology, despite the CEO's aversion forVCs?* How did Nam Ho, Founder and Managing Partner of Altos Ventureturn an introduction by a Stanford Business School professor into aventure capital firm managing a quarter billion dollars ofcapital?* How does Bing Gordon, Partner at Kleiner Perkins Caufield &Byers and author of the business plan that resulted in KPCB'sinvestment in Electronic Arts, time exits properly?* Why did Soo Boon Koh, Managing Director of IGlobe Venturesback a GPS company which was filing for Chapter 11, in the post9-11 market?The Way of the VC: Having Top Venture Capitalists on YourBoard is essential reading for venture capital practitionersincluding partners, principals, analysts, consultants and limitedpartners--both institutional and private. It is also useful tostudents of finance who want a better understanding of what goes onin the venture capital world.

Acknowledgments ixForeword xiIntroduction xiiiChapter 1 The Call to Adventure 1Chapter 2 Finding the Right Partner at the Right Time: Focus on the Forest, Not the Trees 33Chapter 3 Transitions in Partnership: A Bridge Over Troubled Waters 73Chapter 4 Growing Together 115Chapter 5 Smart Money: The Top VC on Your Board 139Chapter 6 If You Need to Woo a Turkey Buzzard 167Chapter 7 The Partnership Becomes Wildly Successful 221Chapter 8 Conclusion 243Appendix 251Index 271