Over the course of 2020 the RLC Ventures team have had a bit more time to read. Below is our list, in no particular order, of the 5 best books you can read in or to demystify and understand Venture Capital.
What it's about: Zero to One shares Thiel's lessons on how to build a truly disruptive company, leveraging his journey as both an entrepreneur (Co-founded PayPal and Palantir) and successful Venture Capitalist (First outside investment in Facebook) to inform his perspectives. The main takeaway from Zero to One is that a company that is built to last will not build its foundations by emulating, or adding incremental value to what its competitors are doing (Going from 1 to n). They will escape the competition all together by creating something entirely new - going from 0 to 1.
Highlights: Zero to One has insights for all players within the VC ecosystem, from entrepreneurs to investors alike. As someone who has recently entered this space, it served as a great guide to understanding (i) why a startup should be entirely differentiated, and (ii) why, as a VC, the startups that do so are the only opportunities worth pursuing.
What it's about: This is the holy grail of books when it comes to understanding everything about Venture Capital. Venture Deals offers insider insights into the mechanisms that govern venture capital deals as well as tricks that will help you get the most out of negotiations with investors. It lays out the nuts and bolts of venture capital deals in a way that is both easily understood and will give you an edge at the negotiations table.
Highlights: A condensed book with lots of information that is actually an overall easy read. This book is a brilliant summary of things to know when raising capital as a founder. It provides a really valuable perspective of how VCs work and provides insights from angles of VCs as well as entrepreneurs. We definitely recommend it for anyone interested in the details of venture capital funding, term sheets, legal knowledge and acquisitions.
What it's about: eBoys is a classic. During the mid-90's Randall spent a great deal of time in and around the Benchmark offices in order to better understand the story of how Benchmark formed. Through some remarkable accounts, such as their investments in eBay and WebVan, you really begin to get a feeling as to what makes the Benchmark culture so unique - and their outcomes just so large. Also interesting to learn more around how they recruited Bill Gurley and continue to follow their equal partnership model even to this day.
Highlights: Getting a first-hand account of the formation and establishment of one of the most internationally recognised VC firms is incredibly interesting. From seeing how they hire, support founders and think about 'value-add' (before it was cool). It's a must read for anyone interested in the history of the industry.
What it's about: Secrets of Sand Hill Road gives you a comprehensive understanding of the mechanics of Venture Capital and how you as a Founder can improve your chances of raising from VC's. It is written by Scott Kupor, General Partner at A16Z. Throughout the book he touches on the structure of the LP <> GP Relationship, and offers an insight into the underlying motivations of Investors which helps demystify their often seemingly strange behaviour. Highly recommended for improving basic understanding, although it is very US specific when it comes to legal/company law, so feel free to look elsewhere for that information if you are a non-US reader.
Highlights: The whole book is extremely clearly communicated and offers a no-BS guide to the key concepts you need to be aware of as both an aspiring investor or founder.
What it's about: The book is a fascinating tour of the genesis and evolution of the venture capital business, spanning more than 200 years of development. The book was written by Tom Nicholas of Harvard Business School.
Highlights: Across all these stages, a major theme of this book has been the importance of historical perspective. History matters because it helps to explain how things came to be what they are. Lines of continuity or change can often be traced from the past to the present. Nicholas ties the principal function of venture capital—systematically producing outsized returns on long-tail distributions of startup companies in emerging high-tech industries—to other episodes in American economic history.