In 2020, venture capitalists invested about $150 billion into U.S. start-ups, according to the data company, Crunchbase. According to the San Diego Union-Tribune, local startups in Southern California are securing more investment dollars in a single quarter than they used to get in an entire calendar year.

This surge of capital is not necessarily a new trend, but it has shifted power from the investors to the entrepreneurs. Perhaps no one knows this better than Scott Kupor. The entrepreneur turned Managing Partner at Andreessen Horowitz helps manage more than $16.6 billion in assets. Scott’s new book, Secrets Of Sand Hill Road, gives readers a look behind the curtain at venture capital as it relates to all stages of the startup cycle.

In this episode, we’ll hear more from Scott about what makes a successful venture capitalist. He’ll also describe how the industry has changed over the past 20 years and explain how that changing landscape has made managing relationships more important than ever. Plus, could the future of VC be in the hands of AI?

Episode Quotes:

On unicorn companies:

“The market size opportunity for successful companies is just dramatically different, right? I mean, you can get to $500 billion outcomes in these companies, which was just inconceivable even probably 10 or 15 years ago[…] nobody had really seen billion-dollar companies with any kind of regularity[…] I hate to say it, but billion-dollar companies are kind of table stakes at this point in time.”

On why venture capital is unique:

“I think the reason why venture capital has persisted is it fills a gap in the market that just don’t otherwise get satisfied. […] for things where you have long lead times, you have people really trying to take on a risk that is just well beyond what a bank or other financing source can do. There's really not anything other than venture capital that can provide that.”

On how much failure is involved in investment:

“You can't measure success based upon your percentage success or failure rate. In other words, if you invest in 10 companies and you get five or six or seven of them right, we don't really know whether you're good as a venture capitalist. It doesn't really tell us anything. Everything here is about the magnitude of the winners.”

Show Links:

Pulling Back the Curtain on Venture Capital feat. Scott Kupor

unSILOed with Greg LaBlanc