What are the key factors needed to become a unicorn? We’re sharing Professor Ilya’s latest research! Check out the through the link 🦄: www.patreon.com/theventuremindset
My impressions, based on anecdotal stories from those who've sat across the table from VCs, paint a quite different picture. Contrary to being visionaries with a 'prepared mind' for future innovations, willing to strike out in the ambition of hitting home runs, VCs are often driven by herd mentality, preferring to be second backers rather than first. They're frequently motivated by FOMO (Fear of Missing Out), chasing hot sectors regardless of long-term viability. Instead of being open to cold calls from innovative founders, many VCs rely heavily on their networks for investment opportunities, potentially missing out on groundbreaking ideas.
You make an absolutely great point 👌. Do you think this behavior is due to the fact that for them it's less riskier backing an idea that hasn't gained enough traction like: subsequent fund rounds, revenue, solid customer base etc? Also its Validation when you raise money with other vcs. Like I've listened to founders who raise money, not because they need it but just validate the inner feeling they are headed in the right direction.
Thats why most pre-seeds are by angel investors and/ incubators like first round capital. Id love your opinion 😊 I recently came across this year's YC batch class and most of it were AI companies so it leans to FOMO narrative
Nanhee is correct, however, as someone who also set on that table, including the other side: A VC has their LPs in mind. These LPs are also just humans, prone to tribal thinking, heuristics and agendas. So paradoxically it is absolutely logical, to take start-ups that fulfill that “buzzword, FOMO, hype” train, because that is also what the LPs signed up for. And these LPs, they get the money from the market. And there, the consumer buys “AI” ETFS and “emerging tech” indices. It goes round and round. The frontal lobe in the human brain is very young… so as a logical thinking human, it is illogical to expect humans to behave logically. If you deal with humans, even great ideas need to go through a tribal, trust and emotional filter…. A realization I as a nerd had a hard time with, but it can also be ridden like a wave 🌊❤
So go to Stanford mba -> become a VC -> invest in juciero -> fail because you didn’t realize you don’t need the $400 machine to squeeze and apple sauce packet that children can do such like their kids size yogurts. Awesome, great advice
when you shortlist startups and invest in them, and you make homerun on 1 out of 20: 1. in world of finance its called persistence 2. in world of regular people its called gamble. thats because regular people cannot afford to make so many unsuccessful investments before one hits homerun.
He’s not accounting for survivorship bias. For example, in that lottery analogy, even if someone wins twice, it’s still the lottery. You shouldn’t expect them to be more statistically predisposed than most people to winning a third time.
Great point, my friend! I remember a man named Richard Lustig who has won lotteries ~7 times and even wrote a book about how to increase your chances of winning the lottery. However, he apparently uses a lot of his winnings to purchase more lottery tickets. Depending on how you see it, you could position that as a great strategy, or just call it obvious... That said, I do think that looking at the lottery analogy with this info about Lustig works perfectly with what Ilya Strebulaev said about VCs looking only at home-runs and not at failures.
It is incredibly difficult! Some of these things hemorrhage cash for years, before they even break even. I think this "Facebook" company isn't profitable yet.
Emma, your explanation of candlestick patterns is on point! This video really helped me understand how to identify trends better. Keep up the great work 🔥
00:01 Venture Capital is not a gamble 02:02 Successful VC firms excel in making high-return investments over time 03:56 Los inversores de riesgo se centran en el éxito a largo plazo, no en el fracaso a corto plazo. 05:40 La importancia de experimentar, fallar y perseverar en la búsqueda de jonrones en la vida. 07:32 La importancia de tener una mente preparada en el mundo de la inversión en Silicon Valley 09:26 Venture capitalists use fast and slow lanes to filter deals. 11:23 La importancia de construir un informe inteligente sobre tu startup 13:28 Key principles for pitching to investors 15:26 Fracaso constructivo ayuda a aprender y mejorar
thanks for talking about your perspective on decision making.. i have good ideas but i tend to get ripped off when I'm trying to develop them and people take my ideas and use their contacts etc to develop them.. been some world changing ideas i had too.. any ideas on how to not get ripped off??
Can a blurb be written by AI? It seems it's best job for AI. By the way, I am so glad that I am a failure champion. This video really made me feel good. I will try to fail again.
That claim, that VCs say No almost all the time, is extremely offensive to a person who has pursued VC funding without success. In reality they NEVER say no. They equivocate, they say Maybe, they propose fairytales, they never ever ever say No. Having studied this question, there is a great negotiation reason for never saying No, which is an asymmetry between VC and founder. The VC is in no hurry while the founder is bleeding out his or her own necessarily limited resources and therefore is in a great hurry. Not Saying No puts time Pressure on the founder and makes a better deal for the VC because if a deal is made their counterparty is more desperate. In short it is a manipulative destructive and frankly disgusting activity in which the VC is happy to see you grind your baby into paste and let it die,while bankrupting you, all for the benefit of some Imaginary future deal with someone else. A VC who has any moral fiber WILL say no a lot. But no actual VC I ever encountered on Sand Hill Road ever did in reality.
No it is a gamble. If there really was a success formula VCs would not fail 95% of the time (his numbers that only 1 in 20 get that home run). If a 95% failure rate isn’t a gamble then I don’t know what is. Google was turned down repeatedly by some of the biggest VCs. There are so many such stories. VCs really can’t predict because the future is always unpredictable no matter how much mind you put in to it. The strangest ideas may work while slam-dunks do not. This remains a gamble. A VC will admit that after a few drinks.
A gamble implies the outcome is completely random. If so, certain firms would not demonstrate consistent outsized returns such as benchmark, sequoia and Horowitz. The strike rate is just one leg of a three legged stool in determining EV and ultimately, profitability. Do you know what the other two legs are?
there is no one size fit all - everyone talk only about giants - there are many more unknown success stories not necessarily wall street darlings but create social impact on large scale
I find it intellectually inconsistent that he never mentioned his selection bias for successful VC firms. I think we could also learn from the VC firms that failed.
Respected sir ,, register entire world stock market and number of shares registered,, gyarenttee by Americans congress,, white house,, remove company layings eggs utras just like one buy get one free remove company utras,, devidents only account pay only ,, company profit is not more than 24 percent of annual on opening balance of principal amount,, 10/07/2024 @ 1/28 am
So Harvard Yale and Stanford have a big plagiarism problem and instead of punishing plagiarists they reward them with 1 million a year teaching jobs. So I'm sorry right when you said Stanford researched I lost any faith in this
Sorry mate, I find your presentation boring. I think your voice is a bit monotone just feedback not criticism. You are more successful than I am and then I’ll ever be
One thing is for sure. Stanford and Harvard want to admit students who have already achieved so much that they can survive without these institutions. Thats how these institutions reputation is built. I am not sure what to call this admission strategy.
What are the key factors needed to become a unicorn? We’re sharing Professor Ilya’s latest research!
Check out the through the link 🦄: www.patreon.com/theventuremindset
My impressions, based on anecdotal stories from those who've sat across the table from VCs, paint a quite different picture. Contrary to being visionaries with a 'prepared mind' for future innovations, willing to strike out in the ambition of hitting home runs, VCs are often driven by herd mentality, preferring to be second backers rather than first. They're frequently motivated by FOMO (Fear of Missing Out), chasing hot sectors regardless of long-term viability. Instead of being open to cold calls from innovative founders, many VCs rely heavily on their networks for investment opportunities, potentially missing out on groundbreaking ideas.
You make an absolutely great point 👌.
Do you think this behavior is due to the fact that for them it's less riskier backing an idea that hasn't gained enough traction like: subsequent fund rounds, revenue, solid customer base etc?
Also its Validation when you raise money with other vcs. Like I've listened to founders who raise money, not because they need it but just validate the inner feeling they are headed in the right direction.
Thats why most pre-seeds are by angel investors and/ incubators like first round capital.
Id love your opinion 😊
I recently came across this year's YC batch class and most of it were AI companies so it leans to FOMO narrative
Nanhee is correct, however, as someone who also set on that table, including the other side: A VC has their LPs in mind. These LPs are also just humans, prone to tribal thinking, heuristics and agendas. So paradoxically it is absolutely logical, to take start-ups that fulfill that “buzzword, FOMO, hype” train, because that is also what the LPs signed up for. And these LPs, they get the money from the market. And there, the consumer buys “AI” ETFS and “emerging tech” indices. It goes round and round. The frontal lobe in the human brain is very young… so as a logical thinking human, it is illogical to expect humans to behave logically. If you deal with humans, even great ideas need to go through a tribal, trust and emotional filter…. A realization I as a nerd had a hard time with, but it can also be ridden like a wave 🌊❤
This doesn't actually seem fair. Both pictures are not necessarily in contradiction. One must be able to weed out the noise, too.
And they bias towards backing stereotypes of founders.
"Become a failure champion" - Great advice and motivation
i sense a gambler here
😂😂
"To achieve home runs, you need to fail" - Ilya Strebulaev
Thank you for the great interview!
So go to Stanford mba -> become a VC -> invest in juciero -> fail because you didn’t realize you don’t need the $400 machine to squeeze and apple sauce packet that children can do such like their kids size yogurts. Awesome, great advice
Skip the over priced MBA. Do a specialized MAsters
@davidc4408 How do you do that?
when you shortlist startups and invest in them, and you make
homerun on 1 out of 20:
1. in world of finance its called persistence
2. in world of regular people its called gamble.
thats because regular people cannot afford to make so many unsuccessful investments before one hits homerun.
This theory of venture capital is all fascinating. But in real.. just talk to a few investors. It is a very difficult business; extremely stressful.
He’s not accounting for survivorship bias.
For example, in that lottery analogy, even if someone wins twice, it’s still the lottery. You shouldn’t expect them to be more statistically predisposed than most people to winning a third time.
Great point, my friend!
I remember a man named Richard Lustig who has won lotteries ~7 times and even wrote a book about how to increase your chances of winning the lottery. However, he apparently uses a lot of his winnings to purchase more lottery tickets. Depending on how you see it, you could position that as a great strategy, or just call it obvious...
That said, I do think that looking at the lottery analogy with this info about Lustig works perfectly with what Ilya Strebulaev said about VCs looking only at home-runs and not at failures.
Thank you so Professor Ilya Strebulaev for sharing your experience and wisdom with us I learn a lot from this video.
Thank you @EO, for this amazing video, by Professor Strebulaev. Amazing lesson
yes..my thoughts exactly.
I am now ready to subdue the universe ❤
Thank you Professor!
I would avoid taking advice from someone whos never been a venture capitalist or worked for a startup
It is incredibly difficult! Some of these things hemorrhage cash for years, before they even break even. I think this "Facebook" company isn't profitable yet.
How many or what percentage of top VCs are Stafford MBAs or MBAs from any of the top business schools ?
A great example of what Nassim Taleb calls IYI.
Emma, your explanation of candlestick patterns is on point! This video really helped me understand how to identify trends better. Keep up the great work 🔥
Power Law Distribution is all you need to know about VCs
5 minutes in and no big takeaways. Just get straight into the valuable content thats what people are here for.
Very informative and gives a whole different perspective on what happens behind the curtains in the word of VC and startups
00:01 Venture Capital is not a gamble
02:02 Successful VC firms excel in making high-return investments over time
03:56 Los inversores de riesgo se centran en el éxito a largo plazo, no en el fracaso a corto plazo.
05:40 La importancia de experimentar, fallar y perseverar en la búsqueda de jonrones en la vida.
07:32 La importancia de tener una mente preparada en el mundo de la inversión en Silicon Valley
09:26 Venture capitalists use fast and slow lanes to filter deals.
11:23 La importancia de construir un informe inteligente sobre tu startup
13:28 Key principles for pitching to investors
15:26 Fracaso constructivo ayuda a aprender y mejorar
this is exactly what I am looking for... thanks!
Thank you for the videos, Thanks @Ilya Strebulaev and @EO
How rich kids play around with other rich kids' money and are never held accountable during their whole lives.
If that's your take away, then feel sorry for you
wow, thank u so much for this. i've learned many fruitful insights!
thanks for talking about your perspective on decision making.. i have good ideas but i tend to get ripped off when I'm trying to develop them and people take my ideas and use their contacts etc to develop them.. been some world changing ideas i had too.. any ideas on how to not get ripped off??
Wow what an awesome content. This is the best lecture I’m receiving on this subject. Thank you
Nice. Please give us examples of good blurbs. .
Wow.. this is awesome. Thanks for sharing prof.
Read the "Accent of Money". By Naill Ferguson.
Although i hear that reaching different people at a firm may engender different responses.
Great insights, Blurbs part very helpful
It is definitely gamble
Did all billionaires around the world study in Stanford, Oxford, Berkeley or Harvard???
Its all about your Unfair Advantage!
What about decisions ?
Nice work thanks
Can a blurb be written by AI? It seems it's best job for AI. By the way, I am so glad that I am a failure champion. This video really made me feel good. I will try to fail again.
Impressive advice. Thanks for sharing 👍
Very insightful thanks 🙏
Amazing talk
Is he actually saying “blurp”..?!
That claim, that VCs say No almost all the time, is extremely offensive to a person who has pursued VC funding without success. In reality they NEVER say no. They equivocate, they say Maybe, they propose fairytales, they never ever ever say No.
Having studied this question, there is a great negotiation reason for never saying No, which is an asymmetry between VC and founder. The VC is in no hurry while the founder is bleeding out his or her own necessarily limited resources and therefore is in a great hurry. Not Saying No puts time
Pressure on the founder and makes a better deal for the VC because if a deal is made their counterparty is more desperate. In short it is a manipulative destructive and frankly disgusting activity in which the VC is happy to see you grind your baby into paste and let it die,while bankrupting you, all for the benefit of some
Imaginary future deal with someone else.
A VC who has any moral fiber WILL say no a lot. But no actual VC I ever encountered on Sand Hill Road ever did in reality.
The best decision one can about an MBA, is not to spend the money or the time to earn one.
Thank u!!! ❤❤❤
Brilliant sir✌
" Knowledgeable " How to reach out sir
If everything body is fooling you
How can you make decisions
They have been stuyding an abstract mind concept called failure for 20 years?!! 😂😂😂😂😂
Thank you very much
No it is a gamble. If there really was a success formula VCs would not fail 95% of the time (his numbers that only 1 in 20 get that home run). If a 95% failure rate isn’t a gamble then I don’t know what is. Google was turned down repeatedly by some of the biggest VCs. There are so many such stories. VCs really can’t predict because the future is always unpredictable no matter how much mind you put in to it. The strangest ideas may work while slam-dunks do not. This remains a gamble. A VC will admit that after a few drinks.
A gamble implies the outcome is completely random. If so, certain firms would not demonstrate consistent outsized returns such as benchmark, sequoia and Horowitz. The strike rate is just one leg of a three legged stool in determining EV and ultimately, profitability. Do you know what the other two legs are?
Valentine what does it mean?
Yes I join
Amazing video!!!! ❤
what i would to know if he reasearch on why women and minorities are less than 4% of the VC world
says it is not gambling, and then explain gambling
finally finding the comment I was looking for. Prof tried to frame us . Not to us prof not to us
By the way, I know his nephew personally
자동 자막말고 영어 자막도 보고싶습니다ㅠㅠ
Witnesses by respected government
Am I the only one to feel, he sounds like Jack maa?
there is no one size fit all - everyone talk only about giants - there are many more unknown success stories not necessarily wall street darlings but create social impact on large scale
how to get 18 000 vcs mail address
TLDR: Have a lot of money to win at roulette by placing many bets. Focus on 36x win and less on 2x wins.
👏🏻👍🏻
Круто👍
Shallow content - more close to human development
👍
So it is a gamble
5:50
I find it intellectually inconsistent that he never mentioned his selection bias for successful VC firms.
I think we could also learn from the VC firms that failed.
in summary, VC's don't know how to use Google. :'D
What a bunch of BS. The vast majority of companies funded by VCs fail. It’s pure luck, no skill involved.
What is this!? Is this for real??
I have too much money investing in 100 companies!!! 😂🎉🥳
I just learned how WhatsApp got ruined
Respected sir ,, register entire world stock market and number of shares registered,, gyarenttee by Americans congress,, white house,, remove company layings eggs utras just like one buy get one free remove company utras,, devidents only account pay only ,, company profit is not more than 24 percent of annual on opening balance of principal amount,, 10/07/2024 @ 1/28 am
Become a failure champion 🏆 😢
So Harvard Yale and Stanford have a big plagiarism problem and instead of punishing plagiarists they reward them with 1 million a year teaching jobs. So I'm sorry right when you said Stanford researched I lost any faith in this
Sorry mate, I find your presentation boring. I think your voice is a bit monotone just feedback not criticism. You are more successful than I am and then I’ll ever be
Shame on him, deman for his job is so high!! They should cooperate with real businessmans in POLYTECHNIC style (you're welcome mybe)
This guy needs to do some vc investment in his belly. 100x return by diet and gym😂
This guy provides zero insightful knowledge. Waste of time listening to simple fundamental ideas dressed up in conceptual speak.
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This guy tries so hard to talk like donald trump
Boring professor.
Dude speaking useless info
One thing is for sure. Stanford and Harvard want to admit students who have already achieved so much that they can survive without these institutions. Thats how these institutions reputation is built. I am not sure what to call this admission strategy.
So it is a gamble but persistence gamble
Well articulated ❤ interesting insights 👍 Become a failure champion 🫡