Venture capital (VC) is often romanticized in the press and classified as either the villains or the saints of innovation. Regardless of the various portrayals, venture capital has undoubtedly played a major role in innovation trends, especially in the United States, by injecting capital into those entrepreneurs and ventures deemed most worthy. Yet understanding how to access venture capital funds has proven challenging and has, in many ways, been a black box to those entrepreneurs that don't fit the typical mold.
The compounding issue lies in the lack of diversity among investors and entrepreneurs alike. The majority of venture capital deals today still transact in a small sliver of the US, California's Bay Area (primarily San Francisco and Silicon Valley). This region accounted for nearly 45 percent of total venture capital investment in the entire US in 2018. Lack of diversity among venture capitalists is underscored by the harsh reality that, as of 2018, only 7 percent of the investing partners at the top 100 venture firms were women (58 of the top firms had zero female partners). Some speculate that this lack of inclusion has led to a decline in innovation.
The annual Bloomberg Innovation Index ranked the US in a lackluster eighth place, after falling out of the top 10 for the first time last year. Even amidst this minor improvement, the majority of venture dollars seems to hover in the same places with the same type of founders.
Now more than ever there's a need for aspiring venture capitalists and entrepreneurs seeking venture dollars to break the molds. In order to do that, they need an insider's view of the industry. Deep knowledge of trends and access to expert advice is a prerequisite to both investing and fundraising success. Fortunately, there are a number of new resources that can get anyone up to speed on the goals, objectives, and tactics of the world's best venture capitalists.
Here are three sources to follow regularly:
I have written before about the rise of podcasts and how the medium can be a vital source of knowledge for any busy entrepreneur. This is especially true for anyone seeking knowledge about venture capital. There are a number of enlightening shows that dive into the heart of innovation and its financing.
One of my favorites is 20 Minute VC. Host Harry Stebbings has an incredible knack for not only booking the biggest talent in venture capital but also for diving right into unique challenges and opportunities venture capitalists face. A weekly tune-in can instantly give anyone an insider's view on venture. Another great show is Jason Calacanis' Angel which goes deep into the minds of the top investors especially focusing on those with atypical backgrounds. Calacanis proves the best investors don't all come from the same molds.
Many have prophesied the decline and death of email. Famously Zuckerberg declared its demise stating that it would be fully replaced by Messenger. Yet, as recently as last week the Wall Street Journal called email the "hot new channel for reaching people." Frustrated with the noise of social media and the lack of depth in channels like messenger, email has once again risen to become a dominant player in marketing and content consumption.
One of my favorite newsletter to stay on the top trends in venture capital is StricklyVC. The newsletter is run by Connie Loizos, a Silicon Valley insider and editor at TechCrunch. Connie began covering venture capital in the 1990s and has since been a staple for analysis on the industry. Her daily newsletter is a highly digestible collection of the day's top stories in the world of startups and venture capital. Another great one to sign up for is Pitchbook's, DailyPitch to gain a broader view of venture capital, Private Equity and M&A news.
Venture Capitalist's Personal Blogs
There's no shortage of venture capitalist blogs that are replete with worthwhile material. However, a few select venture writers give an especially unique and rare insider's perspective on investing and fundraising.
One of the most famous and vocal venture capitalists, Fred Wilson, has one of the best blogs to follow called, AVC. One post he wrote that found interesting was about the difference between traditional VCs and operating VCs. Wilson, a traditional VC, tends to approach the industry and the candid advice he gives differently than operating VCs, who tend to be laden with battle scars from their early stage days. Personally, I think it is imperative to mix in weekly learnings from a combination of VCs and Operating VCs. Aside from Wilson's AVC, serial venture capitalist Brad Feld's blog, Feld Thoughts, is another must-read.
For operating VCs, read Both Sides of the Table, scribed by two-time entrepreneur-turned-venture capitalist Mark Suster is a great education from someone who has fought on the frontline. Another is Leo Polovets, a software engineer at both Google and LinkedIn before landing as a general partner at Susa Ventures, also puts out a great blog called CodingVC that speaks to the engineering side of innovation and venture investments. These operators-turned-funders have a unique take on the world of venture and how best to play with the leaders.
To truly ignite innovation we are going to need to foster diversity. To foster diversity, we are going to need to remove the black box of venture capital. The more entrepreneurs and aspiring investors know about how venture capital is run today, the better their chances on being included in the race to innovate.