Invest Like the Best

Key Takeaways

Identify and invest in outliers: The best venture capital investors recognize outlier potential when they see it and have a curiosity to discover what makes the outlier tick and WHY they tick that way
On being a VC or a founder: Inherent builders should be in the field – they should be building companies, not coaching other builders
Debug problems as far upstream as possible; take the rocks out of the river so the water can flow as fast as possible
Black magic is reserved for founders; every other area of the company-building process is mere mortal stuff
Stewardship over ownership: The goal is to leave your creation in a better place for the next generation
It is okay to choose the parallel tracked path of banking or consulting, and it is okay to take risks, but it is not okay to do one and spend your life thinking you did the other
The most common mistake that investors make is doing something contrary to the best interests of the founder
Traits of the best investment memos:
- (1) Clearly state the one or two strongest reasons to invest
- (2) Two to three pages max
- (3) Present clear data from the opposing side
- (4) argue why the investment should happen despite the opposing data
Success starts at the foundational layer: Great culture is downstream of getting the foundation right and fostering internal belief, which is all a firm needs to be successful
Performance is the cultural component that matters most

Welcome to this classic episode. Classics are my favorite episodes from the past 10 years published once a month. These are N of one conversations with N of one people. There's nobody I've met quite like Doug Leone.
Doug led one of the world’s most successful venture firms, Sequoia, for over 25 years after he was given responsibility for the firm by its founder, Don Valentine, in 1996. Alongside Mike Moritz, the pair managed its expansion from a single $150m early-stage fund into an $85 billion global powerhouse. It was a privilege to sit down with Doug and learn from him.
We talk about his tough start at Sequoia, get into the technicalities of great go-to-market motions, and survey his advice for other investors in the industry. A key theme that will stick with me from this conversation is Doug’s insistence on keeping things simple and clear.
I listen to this at least once a year. I hope you enjoy it.

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For the full show notes, transcript, and links to mentioned content, check out the episode page here.
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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.

Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

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Show Notes
[00:00:00] Welcome to Invest Like the Best
[00:05:21] What Don Valentine’s heart was like
[00:08:30] The most productive and unproductive parts of Don’s toughness
[00:12:55] Why it’s so important to understand someone’s core motivations
[00:18:44] The most formative experiences he had prior to becoming an investor that impacted his investing the most
[00:22:37] What venture looks like to him today relative to his prior career
[00:28:37] Whether or not he’d go into venture today if he was in his late 20s
[00:34:10] Helping companies circumnavigate mediocre positioning
[00:39:15] How interacting with companies early on has changed over the ears
[00:43:12] Whether or not new entrants into venture should build firms with enterprise value
[00:48:14] Sussing out the killer gene in somebody
[00:51:04] How successful people can instill the lessons learned from hardship into their children
[00:54:30] Whether or not competitive advantage can be architected ahead of time when building a company
[00:57:21] The early 2000s clawback at Sequoia and what navigating that period was like
[01:01:06] What he’s learned about picking the right LPs and partnering with them
[01:04:18] Making sure that performance is on everyone’s minds all the time
[01:09:59] The kindest thing anyone has ever done for him

Doug Leone - Lessons from a Titan - [Invest Like the Best, CLASSICS]

Podcast Notes Playlist: Startup