The Ultimate Guide to Venture Capital Explained by a VC
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- čas přidán 10. 07. 2024
- Venture capital has funded more than half of all US public companies since 1979. Despite having an outsized public presence, VC has historically has been an opaque boutique industry run by only a few hundred venture firms heavily concentrated in Silicon Valley. In this video, I'll demystify venture capital from inside Silicon Valley, including how venture capital differs from private equity and angel investing, the various stages of venture capital across early and late stages, how venture funds make money, roles within venture firms, how venture capital has changed in the past few years, and fundamentally what VC funds need to excel at to be competitive in 2021.
0:00 Introduction
1:25 Venture Capital vs Private Equity
2:15 The Stages of Venture Capital: Early Stage and Growth
5:46 How Venture Capital Firms Make Money
7:50 What does a VC Do?
10:41 Venture Capital Roles
Check out my channel for more content on demystifying startup fundraising: / @nogatekeepers - Věda a technologie
The ground has shifted beneath the feet of the venture capital industry. Both the size of startup exits and the amount of venture capital has grown 10x, and as a result, the industry has become institutionalized with more ex-bankers and consultants entering the industry, more fragmented and specialized in certain verticals (e.g. crypto, life sciences) and stages (e.g. pre-seed vs seed vs post seed vs series A focused funds). It's also become increasingly sharp elbowed and competitive since big funds are looking to deploy more capital and take more ownership, such that traditionally you saw a lot of collaboration in the VC industry. Let me know if you'd like me to make a video on this and other changes on the VC industry, or any other venture related topic! I'm planning on posting a video soon deep diving into how VCs find the next Google or Facebook, and how the pick these deals in the early stages.
yes would love to see a video on the future of venture capital from your vantage point!
Love the in depth breakdown! think this is the best one on CZcams on demystifying venture capital
Golden! Thank you, it brought clarity and motivated me now that we are launching our Seed Round with mowies
Glad to hear that Alejo!
Ahhh so few views and likes! Wayne, this was an excellent video! Really.
Thanks so much! Working on a bunch more content!
What a wonderful briefing. It clears most of the mist I have. Thanks so much.
Thanks so muchJonathan, glad you found it helpful!
Instant subscribe, great job bro!
Thank you Ahmed!
really great video! loved the breakdown of topics and explanations!
Thanks Adithi!
One of the best overall breakdowns I’ve seen
Thanks Tony!
Such a great content. We as an Entrepreneur often a times have a clear goal of raising capital but at times forget or lack empathy towards VC's business model as well.
Amazing man, Keep up the good work.
Thanks so much for the kind note! Glad you liked it!
@@nogatekeepers Hey Wayne, I'm in the process of raising a seed round. Can you tell me how much equity should be diluted on different stages like Pre-Seed, Seed, Pre Series A, Series A & so on?
@@meetsatose6051 Typically 10-20% per stage. Pre-seed less, 5-10%. Seed 10-20%. Series A historically was more, 25% or so. Then tapers back down again in growth stages. Note this excludes options pool dilution
@@waynonsano thank you so much. That means a lot :)
Another awesome video!
Thank you!
I love your videos mate, you are doing a great job...
Thanks so much!!
Thank you so much for this great content! The best channel on CZcams about VC and fundraising! ❤️ Keep it up, Wayne! 💪🏼
Thank you so much Alexander!! Really appreciate the support :)))
@@nogatekeepers Nah, Wayne. Thank YOU! Your content is helping thousands of people raise money, build great companies, and create jobs.
I'm planning on binge watching your videos next weekend and studying them like a course as my team and I are preparing to raise money.
Thanks a lot! ❤️ Have a great weekend! ☀️
@@alexander3845 That's amazing to hear this content is having an impact on builders like yourself, just what I'm hoping for! Best of luck in your fundraising process!
@@nogatekeepers Absolutely! A huge impact! Thanks again, Wayne! Enjoy your weekend! ☀️ 🌴
how much percentage of the vc's entire fund will go to reserves for follow-on investments for eg: if a vc raises a 100 million dollar fund from the limited partners ,how much of the 100 million dollars will go to reserves for follow on investments?
Depends on the fund strategy, but 1:1 is middle of the road. So 50 million for initial checks and 50 million for followon. There are some firms that want to deploy all their capital upfront as early as possible, and some that reserve more heavily to double down on winners
i have a question about venture capital. You dont get super hot companies giving 50X return everyday so what do your employees like associates, analysts,junior partners,senior partners in your vc firm do all day?
That's absolutely true, but it's often impossible to have an idea of whether a company has a chance of being that 50-100x moonshot in advance. So you may have meet hundreds if not thousands of companies before finding one that fits the bill. And it may take a lot of research, networking, and so forth to become enough of an expert to make that call. Not to mention rolling up your sleeves to help these companies AFTER making an investment.
@@nogatekeepers can you make a video on all the employees like associates , analysts , junior and senior partners,lawyers and explain what each of them does
First and for most great video very informative, but secondly, you mentioned "unfair advantages" would a patent on a technology be considered an unfair advantage by a VC, or is this more to do with networking connections and corporate support? Thanks for making such insightful and relevant videos.
You're welcome and thanks for the question! VCs don't consider patents very differentiated because they are by definition public, and other companies can work around that.
@@nogatekeepers Thanks, that makes since. Good to know
@@shermanmcdermott4211 Sure thing!
Pls STOP the background music completely. Its simply annoying. Your content is good enough to not need any gimmicky distraction.
Thanks for the feedback! I really appreciate that. I'll try to tone this down
The thing that bothers me is how big VC uses their size to force anti competitive practices that benefits them. Just like big anything.
Thanks for sharing. Very helpful?
Thank you for the kind note Robert!