Friday, September 10, 2010

Book Review: Mastering the VC Game

Bussgang kicks off the book with a look inside entrepreneurs’ minds. Supplementing his own entrepreneur-turned-VC story with other entrepreneurs’ profiles, Bussgang explains how entrepreneurs operate. He emphasize that they’re driven by passion and an urge to change their industries (or the world), rather than by money alone.

In Chapter 2, Bussgang gets you acquainted with the “notorious Blackberry addicts” who, “because of their hyperactive minds and love for rapid, varied stimulation, have the attention span of someone suffering from attention deficit disorder.” That is, the VC crowd. Bussgang shares how these geeky, charged souls operate in companies, what drives their success, where they’re concentrated, and what kinds of companies they tend to fund.

In the next two chapters, Bussgang shows you how to choose the right VC, pitch that VC (while avoiding common pitching mistakes), and negotiate the right kind of deal.

Chapter 5, one of the more amusing parts of the book, informs you of archetypical boardroom directors. Hint: They’re right in line with original American Idol judges Simon, Paula and Randy. Bussgang then goes into three classic business startup plot lines, and how they tend to play out. These plots involve either a charismatic CEO falling from grace, the CEO and founder losing trust in each other, or a VC mutinee/takeover of the company. Appropriately, Bussgang then shares tips on surviving in your company when you’re in over your head.

Chapters 6 covers routes to cashing out. These include selling your company, engaging in a rare, coveted IPO, and the even more exquisite scenario of doing an IPO, then selling your company.

Next, Bussgang sums up VC industries in various countries outside of the United States, then concludes the book with a look at the state of venture capital today. Like many people who work in or with startups, he emphasizes that today is an excellent time to be an entrepreneur.

Thoughts

“I wrote the book to demystify the VC world for entrepreneurs, having seen both sides as an insider, and to help entrepreneurs level the playing field when pursuing venture capital so they can secure the resources necessary to achieve their vision,” Bussgang writes in the beginning. His honest, practical, easy to read book lines up well with his intentions. He offers insider tips that might otherwise be hard to access, unless you follow one of the VC blogs listed at the back of the book (or Bussgang’s own blog, seeingbothsides.com).

As someone unfamiliar with the industry, I found Bussgang’s book to be an excellent oversight of how VC works. If I were to go and actually pursue a venture capitalist, I’d want more details, like a database of VC companies or a step-by-step plan on what exactly I need to put together in my pitch. But Mastering the VC Game was a most approachable starting point.

I recommend this book to anyone new to the workings of VC. If you’re just beginning your first startup, this book is an essential launching point to get you closer to your funding objective.

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