A16Z partner Scott Kupor’s 5 Fundraising Lessons for Founders

Scott Kupor​ is a former managing partner at ​Andreessen Horowitz​, one of Silicon Valley’s most influential VC firms. A successful entrepreneur, lecturer, and exec at HP and Opsware, he’s overseen billions in capital deployment and has guided hundreds of startups on fundraising and growth.

We gathered five of his tips on fundraising:

• VCs are looking for startups that solve a strong pain: “Vitamins are nice to have; they offer some potential health benefits, but you probably don’t interrupt your commute when you are halfway to the office to return home for the vitamin you neglected to take before you left the house. It also takes a very, very long time to know if your vitamins are even working for you. If you have a headache, though, you’ll do just about anything to get an aspirin! They solve your problem and they are fast acting. Similarly, products that often have massive advantages over the status quo are aspirins; VCs want to fund aspirins.”

• Make sure you really want VC money: And even if your business is appropriate for VC, you still need to decide whether you want to play by the rules of the road that venture capital entails. That means sharing equity ownership with a VC, sharing board control and governance, and ultimately entering into a marriage that is likely to last for about the same time as the average “real” marriage (8–12 years).”
• Have a big addressable market: “The cardinal rule of VC investing is: Everything starts and ends with market size. No matter how interesting or intellectually stimulating your business, if the ultimate size of the opportunity isn’t big enough to create a stand-alone, self-sustaining business of sufficient scale, it may not be a candidate for venture financing.”
• Combine Conviction and Adaptability: “In fact, you’ll often hear VCs say that they like founders who have strong opinions but ones that are weakly held, that is, the ability to incorporate compelling market data and allow it to evolve your product thinking. Have conviction and a well‑vetted process, but allow yourself to ‘pivot’ … based on real‑world feedback.”
• Show you have a vision that turns you into a leader: “The most compelling pitches that we see are those individuals who can really create a vision and distill that vision and tell it in a way that will cause people, as I said, to do maybe even irrational things.”

* References/recommended deep dive: ​Medium article​, his novel, ​Secrets of Sand Hill Road: Venture Capital and How to Get It​