[PDF] ✅ VC By Tom Nicholas – Larringtonlifecoaching.co

10 thoughts on “VC

  1. says:

    As expected, this book tells the legendary stories of how VC firms like Greylock Partners, Kleiner Perkins, and Sequoia launched companies such as Intel, Genentech, and Google But Nicholas also goes back to the early 1800s, beginning with the financing of whale ships Whaling agents operated similarly to today s VC firms And like high tech investing, a few big hits paid for the unprofitable ventures.From this history, Nicholas describes why VC developed as it did in America If you are only interested in the stories, you may find the theoretical sections slow going But I enjoyed the insights into the nature of early stage investing, the history of why it thrived in America, and where it might go in the future.A FEW INTERESTING POINTS FROM THIS BOOK By the middle of the 1800s, nearly 75 percent of the 900 whaling ships in the world were American One reason for this was that American whaling agents had figured out a way to finance risky whale oil ventures Just as VC firms intermediate between entrepreneurs and limited partners with capital to invest, whaling agents intermediated between captains and crew with wealthy investors The payoff of whaling was very similar to venture capital today Every whaling voyage had significant exposure to downside risk literally sinking Most ships would only earn a small to modest profit, but a few ships would return full of barrels of oil that would compensate the investor for the other losses Nicholas overlays a histogram of the distribution of returns for the whaling industry during the 1800s versus the VC industry from 1981 to 2006 They are incredibly similar Nicholas recounts how men willing to risk their capital for higher returns used VC like financing to build America s first factories A particularly good story describes the Brown family of Rhode Island who financed Samual Slater, a 21 year old immigrant from England, who had a working knowledge of the technology to use water power to spin cotton into thread He was, as Nicholas recognizes, what we today call a technical co founder As an interesting addition, Nicholas includes in the book the agreement between Slater and the Browns In it, we see a thoughtful balance between the VC s maintaining control while giving Slater, the entrepreneur, the right incentives to maximize profits During the 1900s, several wealthy families established investment arms to make VC style investments These included the families of Andrew Mellon, Henry Phipps, Laurance Rockefeller, and Jock Whitney Laurance Rockefeller s chief goal was to fund innovation in scientific areas he had an interest in, such as aviation he would fund Eastern Airlines and McDonnell Aircraft Interestingly, the pain associated with early stage investing would nudge all of these families towards later stage private equity investments The need for military innovation during World War II, followed by the GI bill, spurred America s scientific and technological development But the capital available for start ups from individuals and family offices was far less than needed Recognizing this, the New England Council in 1946 created the American Research and Development Corporation ARD to seek capital from the large asset owners investment trusts and insurance companies The returns for the first ten years were disappointing Then in 1957 ARD invested 70,000 600,000 today to fund the start up Digital Equipment Company DEC By 1971 that investment was worth 355 million and DEC was Massachusetts largest employer Nicholas includes a colorful chapter that recounts how Silicon Valley became Silicon Valley and the epicenter of venture capital investing He tells the stories of Arthur Rock Davis Rock , Tom Perkins Kleiner Perkins and Don Valentine Sequoia Capital Through the founding of Intel, Apple, Genentech and other companies we see the principles that made these funds successful Rock emphasized the quality of management Perkins looked for good technology And Valentine stressed the need for big market demand I liked how Nicholas refers to the investing principles these VC firms wrote down at their founding Venture capital took off with the rise of the personal computer during the 1980s And by the year 2000, there were than ten times VC firms than there had been in the mid 1980s Investors couldn t help but notice how Netscape rose 100% from its IPO price on the first day of trading But later came Pets.com, which dropped from over a 300 million valuation to 0 in less than a year When the bubble burst, VC firms received blame for financing and bringing to market bad companies But the asset class was far from done This is a history book, so Nicholas doesn t do much analysis of the last ten years He knows we need distance to form an objective view of recent times A good quote on why VC investing is hard Chuck Newhall said about an investment in a West Virginia equipment maker I lost 25 percent of my life for five years and I wasted months in exhausting, useless travel In the end, Nicholas reminds us that early VC leaders like Georges Doriot, Jock Whitney and Laurance Rockefeller had larger goals than making money they wanted to build new companies that would grow America s economy and advance technology and science In the long tail, their plan paid off.

  2. says:

    Pros Very detailed, gets to foundations and fundamentals of why VC space is how it is today Also how VC and it s mindset is an integral part of America s Growth story and being the world leader Illustrating its spin offs and developments from early 18th century to late 20th century.Cons Not covering the dynamic 21th century happenings in the VC space, as it is going through a dynamic and fast going phase It s a big void that has to be filled to make it complete Should have thrown light on way forward by analysing the happenings I hope that would covered in the next book of the author Tom Nichols.Verdict When it comes to venture capital, those who fail to learn its history are likely to earn poor returns So this is a must read to understand the evolution and craft of Venture Capital Tip If you wanted to understand the essence of it without spending huge time in reading the entire book, check this, well written briefings of a VC Investor on this book He also gave his views on the way forward and his analysis and comparison of present happenings with past, and their faults recommended, if you are time packed Cheers,Rohith www.twitter.com RohithDarisa

  3. says:

    The book starts by drawing an interesting corollary from VCs to the whaling industry in the 1800 s It ends by detailing the shark frenzied, clown investing tactics of the late 1990 s Regarding the latter, my favorite quote We realizes only once it was too late that we forgot to pay attention to this one important factor called profitability.

  4. says:

    Read this if you like history and are interested in the VC industry The author analysis the performance of ground breaking VC funds, dives into the personalities, and does a great job comparing the industry to 18th century whale voyages.

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VC download VC , read online VC , kindle ebook VC , VC ca5c3da53bbd A Major Exploration Of Venture Financing, From Its Origins In The Whaling Industry To Silicon Valley, That Shows How Venture Capital Created An Epicenter For The Development Of High Tech Innovation VC Tells The Riveting Story Of How The Industry Arose From The United States Long Running Orientation Toward Entrepreneurship Venture Capital Has Been Driven From The Start By The Pull Of Outsized Returns Through A Skewed Distribution Of Payoffs A Faith In Low Probability But Substantial Financial Rewards That Rarely Materialize Whether The Gamble Is A Whaling Voyage Setting Sail From New Bedford Or The Newest Startup In Silicon Valley, VC Is Not Just A Model Of Finance That Has Proven Difficult To Replicate In Other Countries It Is A State Of Mind Exemplified By An Appetite For Risk Taking, A Bold Spirit Of Adventure, And An Unbridled Quest For Improbable Wealth Through Investment In InnovationTom Nicholas S History Of The Venture Capital Industry Offers Readers A Ride On The Roller Coaster Of Setbacks And Success In America S Pursuit Of Financial Gain