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Founder vs Investor

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Founder vs Investor

The Honest Truth About Venture Capital from Startup to IPO

HarperCollins Leadership,

15 min read
7 take-aways
Audio & text

What's inside?

Tales from the trenches on both sides of the venture capital battlefield

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Editorial Rating

8

Qualities

  • Concrete Examples
  • Eloquent
  • Insider's Take

Recommendation

This ingeniously structured guide to venture capital offers a fresh approach to a familiar topic. From his perch as a veteran venture capitalist, Jerry Neumann provides his perspective on the system. Then successful founder Elizabeth Zalman weighs in with her own tales from the trenches. By interspersing often conflicting views, this insightful book acknowledges that reality can feel very different, depending on which side of the VC equation you occupy. The result is an unusually thorough look at the VC experience that practitioners, entrepreneurs and financial professionals will appreciate.

Summary

A venture capital investment requires a leap of faith for both the investor and the founder.

Venture capitalists (VCs) spend their days fielding queries from strangers asking for money. Backing a start-up is not for the faint of heart. After just a few weeks of work, the VC investor commits a significant sum to someone they barely know, with the stated goal of pursuing an unproven business model and with full knowledge that the founder could be running a fraud. Outright fraud is rare in the Silicon Valley VC world, and investors make money frequently enough that the system keeps operating. The VC ecosystem is successful in part because of informal rules that compel both sides to behave in ways that build trust.

Founders of VC-backed firms dream big; if they just wanted to make a living, they’d open a dry-cleaning shop. That’s how previous generations viewed entrepreneurship – as something safe, stable and sure to pay the bills. But entrepreneurs who start ambitious companies are risk takers. They have grand visions and want to change the world. For founders who achieve the goal of raising venture capital, dealing with investors is a frustrating exercise. ...

About the Authors

Elizabeth Zalman is an infrastructure and information security expert. She is a two-time founder of venture-backed companies. Venture capitalist Jerry Neumann has invested in some of the most successful venture-funded companies of the past three decades and has worked alongside dozens of entrepreneurs as investor, board member and adviser.

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