Secrets of Sand Hill Road: Venture Capital and How to Get It (Scott Kupor, 2019)

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Review: Don’t be mistaken by its title - it is actually a book on venture capitalise. Good flow and thorough information with good example, to be a good VC or know what a VC want, you must read this book. Rated: 9/10


  • Different strategy to apply to companies that are way too ahead of their time
  • Typical VC returns: 50% lose money, 20%-30% make a bit to a few fold, 10% - 20% make hundreds of times
  • VC look out for: people and team, product, market size
  • LP: limited partner (funder); GP: general partner (manager)
  • LP can come from university endowments, foundations, corporate and state pension funds, family offices, sovereign wealth funds, insurance companies, funds of funds
  • LP invest in growth assets, inflation hedges, deflationary hedges
  • Valuation marks: last round valuation/waterfall (equity %). comparable company analysis (benchmark other companies), option pricing model (Black-Scholes option; different listing price)
  • GP-LP relationship basis: investment domain, best ideas, I work hard for the money
  • Why people don’t go IPO: too expensive (Sarbanes-Oxley Act), efficiency rules disproportionately affect small companies, mutual funds are bigger, alternative forms of financing, too much pressure on public companies
  • Pitch essentials: market sizing, team, product, go-to-market, planning the next round of fund-raising
  • Different stage entry have a different share class (e.g. preferred shares and common shares)
  • Liquidation preference: how much to get back under certain circumstances
  • Pro rata investment: just like first rights but give investors the option to buy in case of top up
  • Vesting: e.g. employee to give up some shares to exercise the remaining shares option
  • Role of the board: hire/fire CEO, guidance on long-term strategic direction for the business, approving various corporate actions, maintaining compliance and good corporate governance, VC-specific roles, the board’s non-role


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