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Mastering the VC Game: A Venture Capital Insider Reveals How to Get from Start-up to IPO on Your Terms
Entrepreneurs who dream of building the next Amazon, Facebook, or Google have the opportunity to take advantage of one of the most powerful economic engines the world has ever venture capital. To do that, you need to woo, impress, and persuade venture capitalists to back your endeavor. That task alone is a challenge. But finding and choosing the right investor can be harder still. Even if you manage to get backing, you want your VC to be a partner, not some dictator who will undermine your vision and take control of your life's work.
Jeffrey Bussgang is one of a very few people who have played on both sides of this high-stakes game. By his early thirties, he had helped build two successful start-ups-one went public, the other was acquired. Now he uses his experience and unique perspective on "the other side" as a venture capitalist helping entrepreneurs bring their dreams to fruition.
In the book, Bussgang offers high-level insights, colorful stories, and practical advice gathered from his own experience as well as from interviews with dozens of the most successful players on both sides of the game, including Twitter's Jack Dorsey and LinkedIn's Reid Hoffman. He reveals how to get noticed, perfect a pitch, and negotiate a partnership that works for everyone.
An insider's guide to the secrets of the world venture capital, Mastering the VC Game will prove invaluable for entrepreneurs seeking capital and successful partnerships. To learn more, visit JeffBussgang.com.
Jeffrey Bussgang is one of a very few people who have played on both sides of this high-stakes game. By his early thirties, he had helped build two successful start-ups-one went public, the other was acquired. Now he uses his experience and unique perspective on "the other side" as a venture capitalist helping entrepreneurs bring their dreams to fruition.
In the book, Bussgang offers high-level insights, colorful stories, and practical advice gathered from his own experience as well as from interviews with dozens of the most successful players on both sides of the game, including Twitter's Jack Dorsey and LinkedIn's Reid Hoffman. He reveals how to get noticed, perfect a pitch, and negotiate a partnership that works for everyone.
An insider's guide to the secrets of the world venture capital, Mastering the VC Game will prove invaluable for entrepreneurs seeking capital and successful partnerships. To learn more, visit JeffBussgang.com.
256 pages, Hardcover
First published April 29, 2010
341 people are currently reading
3973 people want to read
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July 26, 2019
---Summary---
Had I read this book before I set on the path for a financing round, then I would have enjoyed this book much more. Now, after having completed two financing rounds I felt as though the book was more of a review of what I already knew than learning something new. With that said, I highly recommend this book to anyone about to set out to raise money from VC's.
---Notes---
Remember, you don't run these companies; you invest in great people to run these companies. If you think they work for you like divisional presidents, you have it all wrong. In truth, you want to invest in people who are better than you and make sure you work for them. The entrepreneur is your boss and customer combined (52).
On VC's:
The problem they have is that most projects just don't meet their selection criteria. There's either not enough upside potential or there's too much risk, the entrepreneur doesn't really have the right qualifications, there's no chemistry between the entrepreneur and the VC, or the business just doesn't get the VC sufficiently fired up. Passion for a market, a technology, and the qualities of the entrepreneur plays a big role (81).
On VC Pitches:
Many entrepreneurs make the mistake of playing down the risk of their venture in the pitch for capital. Venture capitalists know there are risks involved in every start-up. They want to know what they are, and they want to know that the entrepreneur knows what they are. "I'd say to the VC's 'Look, the odds that I'm right are less than 10%. But if I am right, this is really big'" (90).
Reid Hoffmans advice is: don't oversell. "I've learned the hard way that it's better to say, 'Look, this is a gamble. It's a risk. I believe I can do it successfully, but it hasn't been done yet, so we're going to see if it plays out (90).
On how Tim Draper thinks about VC:
"I want the positive vote to have the power. If it's a bad investment, we lose our money one time. But we can make a thousand times our money if we get that weird one that happens once in a while (94)."
On boards:
"Always check the reference of the particular partner who will sit on your board, not just the firm overall. Although a firm may be great, it doesn't necessarily mean every partner is a great fit for you and your start-up (112)."
When you boil down what value a VC will provide you, there are 4 important areas: (1) strategy; (2) recruiting; (3) business development; and (4) future financing (112).
Tips & Tricks:
"I'm on a board with a VC who asks our CEO to include in every board presentation the 5 top introductions to prospective partners and customers he'd like us to make for him (118)."
"You often hear the refrain, "Life's too short to invest in people you don't like." But the real emphasis on chemistry concerns the thinking styles, ways of working, enthusiasm for the business, and a shared view of the future. You want to find someone you think you can work with and someone you believe you cant trust (123). "
Under normal market conditions, multiple liquidation preferences are rare in the early stage or very competitive deals, but quite common in recapitalization or distressed situations (134).
There are typically 3 phases to the startup: The jungle, the dirt road, and the highway.
On managing a board:
"The single most important thing to do with a board is to keep them really up to date on the business. We wanted to be unbelievably clear about what was working and what wasn't working, then asking for advice and listening to the good parts (166)."
They always knew exactly what was going on, what was working, what wasn't working, which ideas I was pursuing and which ones I wasn't. I was very honest with them. No secrets. No Surprises. If something new is going to come up in a board meeting that's not good, put the calls out early to the directors. "Here's what's going on, here's why. I want you to think about it. Help me. So when we get in the board meeting, they don't say, "What are you talking about?" (167).
In the early days, I estimate I spent 15%-20% of my time managing my board - seeking their advice, preparing for the meetings, my board .- seeking their advice, preparing for the meetings, following up on action items. I needed it. Because I was going to need their money (168).
When to sell can be the hardest question the entrepreneur faces. Here are the 5 considerations that help frame the decision (175):
Had I read this book before I set on the path for a financing round, then I would have enjoyed this book much more. Now, after having completed two financing rounds I felt as though the book was more of a review of what I already knew than learning something new. With that said, I highly recommend this book to anyone about to set out to raise money from VC's.
---Notes---
Remember, you don't run these companies; you invest in great people to run these companies. If you think they work for you like divisional presidents, you have it all wrong. In truth, you want to invest in people who are better than you and make sure you work for them. The entrepreneur is your boss and customer combined (52).
On VC's:
The problem they have is that most projects just don't meet their selection criteria. There's either not enough upside potential or there's too much risk, the entrepreneur doesn't really have the right qualifications, there's no chemistry between the entrepreneur and the VC, or the business just doesn't get the VC sufficiently fired up. Passion for a market, a technology, and the qualities of the entrepreneur plays a big role (81).
On VC Pitches:
Many entrepreneurs make the mistake of playing down the risk of their venture in the pitch for capital. Venture capitalists know there are risks involved in every start-up. They want to know what they are, and they want to know that the entrepreneur knows what they are. "I'd say to the VC's 'Look, the odds that I'm right are less than 10%. But if I am right, this is really big'" (90).
Reid Hoffmans advice is: don't oversell. "I've learned the hard way that it's better to say, 'Look, this is a gamble. It's a risk. I believe I can do it successfully, but it hasn't been done yet, so we're going to see if it plays out (90).
On how Tim Draper thinks about VC:
"I want the positive vote to have the power. If it's a bad investment, we lose our money one time. But we can make a thousand times our money if we get that weird one that happens once in a while (94)."
On boards:
"Always check the reference of the particular partner who will sit on your board, not just the firm overall. Although a firm may be great, it doesn't necessarily mean every partner is a great fit for you and your start-up (112)."
When you boil down what value a VC will provide you, there are 4 important areas: (1) strategy; (2) recruiting; (3) business development; and (4) future financing (112).
Tips & Tricks:
"I'm on a board with a VC who asks our CEO to include in every board presentation the 5 top introductions to prospective partners and customers he'd like us to make for him (118)."
"You often hear the refrain, "Life's too short to invest in people you don't like." But the real emphasis on chemistry concerns the thinking styles, ways of working, enthusiasm for the business, and a shared view of the future. You want to find someone you think you can work with and someone you believe you cant trust (123). "
Under normal market conditions, multiple liquidation preferences are rare in the early stage or very competitive deals, but quite common in recapitalization or distressed situations (134).
There are typically 3 phases to the startup: The jungle, the dirt road, and the highway.
In the jungle, the entrepreneurs have no set path to follow and must hack at the foliage to get from point A to point B, diving into different parts of the jungle with reckless abandon. No one has been there before them and they simply have to make it up as they go along. There are some casualties along the way but the determined entrepreneurs change direction, adjust plans, and figure out a way to get out of the jungle. While in this stage of their growth, the entrepreneur's metric for success is how much "buzz" or positive word of mouth they can generate about the company.
Once they are out of the jungle the entrepreneur finds the dirt road. At this stage, they are shipping product, generating revenue, and have a clear sense of strategic direction. Their goal is to begin to increase their momentum along their chosen path. There may be a few twists and turns and plenty of bumps, but it's not nearly as chaotic as things were in the jungle - target customers are established, competitors are well known and understood, and fewer surprises intrude on their progress. At this stage, the success metric for the company is revenue growth. The absolute revenue number matters less than the ongoing growth. The more promotionally minded entrepreneurs will refer to that growth in every conversation possible.
After reaching the end of the dirt road, the entrepreneur discovers the highway. Suddenly, the company is no longer entrepreneurial. You're charging ahead with such a speed that you have less room or ability to maneuver. You pray you don't slam into a wall (i.e. run out of cash) but instead continue to progress on a smooth path to an IPO. To succeed at this the company needs to be profitable, and so now the entrepreneur cites cash flow figures than describing the arc of revenue growth. (147).
On managing a board:
"The single most important thing to do with a board is to keep them really up to date on the business. We wanted to be unbelievably clear about what was working and what wasn't working, then asking for advice and listening to the good parts (166)."
They always knew exactly what was going on, what was working, what wasn't working, which ideas I was pursuing and which ones I wasn't. I was very honest with them. No secrets. No Surprises. If something new is going to come up in a board meeting that's not good, put the calls out early to the directors. "Here's what's going on, here's why. I want you to think about it. Help me. So when we get in the board meeting, they don't say, "What are you talking about?" (167).
In the early days, I estimate I spent 15%-20% of my time managing my board - seeking their advice, preparing for the meetings, my board .- seeking their advice, preparing for the meetings, following up on action items. I needed it. Because I was going to need their money (168).
When to sell can be the hardest question the entrepreneur faces. Here are the 5 considerations that help frame the decision (175):
1. Do you still love running the business? Does it feel like you can't imagine doing anything else with your life? Do you still feel like you have something to prove or do you feel tired and worn out?
2. Do you still believe passionately in the business's potential? Does it appear that the major proof points are still ahead of the company?
3. How much is the offer as compared to what it might be a year or two from now if the company were to successfully execute on its plan and hit its numbers? What might the company's value be in a year or two if it falls short of its plan by 30% How would you assess the probability of either path and then calculate the expected value of holding on for a few more years as compared to taking the money off the table by selling now?
4. Does the business require more capital and, if so, can that additional capital be raised easily at a reasonable (and therefore not too dilutive) price?
5. Do the people around you (your management team, your VCs, your family) want . you to sell out or are they encouraging you to keep going?
July 6, 2010
I was hoping to learn something here and I found it interesting. Apparently if you didn't go to MIT, Stanford, or Harvard you are screwed. (Unless you're super passionate, connected, and killer innovative/smart/creative).
December 4, 2015
Good:
Solid intro to the VC industry.
Backed by personal experience.
Bad:
Not technical at all, doesn't go into "why" or "how", only "what".
The industry is now much more diverse (accelerators, corporate venture, etc.) and the book doesn't go into them.
Ugly:
Comes off as self promotional, not objective.
Solid intro to the VC industry.
Backed by personal experience.
Bad:
Not technical at all, doesn't go into "why" or "how", only "what".
The industry is now much more diverse (accelerators, corporate venture, etc.) and the book doesn't go into them.
Ugly:
Comes off as self promotional, not objective.
November 30, 2022
This book was definitely written over a decade ago. The world has changed: LinkedIn was starting to get off the ground, the iPhone had only been around for a few years, and Instagram hadn't even been launched, let alone Snapchat, Vine, or TikTok. Twitter and Jack Dorsey are held up as a shining example… fast foraging to Q4 2022, and Twitter was bought by Elon Musk and he’s running it into the ground.
Do the book’s major lessons still count? I suppose. (A lot of the writing left me fuzzy-headed; he mentions having the “entrepreneurial itch” and yet doesn't qualify or quantify what that means.) Some or the stories were useful, and it painted a picture about the big players in the game, and finely aligning one’s funding needs with the funding interests of a VC.
My key takeaways:
Building a company and securing funding is all about being able to network; few things are done without help from a connection. VCs won’t talk to you unless you’ve been introduced or have a reputation with other VCs.
Startups often succumb to drama: the drama of the founder being edged out by a CEO, or the VC group taking a controlling position on the board and driving the company to an end the founder doesn't envision. Plan your exit gracefully, and know when to exit. If you’re an entrepreneur and you’re still as excited and interested as you were when you started, it’s not time to quit.
The best VCs are like the best high school aports coaches: they’ll tell you the truth, mentor you, and collaborate with you on how to get better. Always choose the truthteller (Simon Cowell) over the industry expert (Randy Jackson) or the cheerleader (Paula Abdul).
Do the book’s major lessons still count? I suppose. (A lot of the writing left me fuzzy-headed; he mentions having the “entrepreneurial itch” and yet doesn't qualify or quantify what that means.) Some or the stories were useful, and it painted a picture about the big players in the game, and finely aligning one’s funding needs with the funding interests of a VC.
My key takeaways:
Building a company and securing funding is all about being able to network; few things are done without help from a connection. VCs won’t talk to you unless you’ve been introduced or have a reputation with other VCs.
Startups often succumb to drama: the drama of the founder being edged out by a CEO, or the VC group taking a controlling position on the board and driving the company to an end the founder doesn't envision. Plan your exit gracefully, and know when to exit. If you’re an entrepreneur and you’re still as excited and interested as you were when you started, it’s not time to quit.
The best VCs are like the best high school aports coaches: they’ll tell you the truth, mentor you, and collaborate with you on how to get better. Always choose the truthteller (Simon Cowell) over the industry expert (Randy Jackson) or the cheerleader (Paula Abdul).
August 26, 2020
A concise well-written book on the various aspects of the VC business. The book covers the fundraising, term sheets, and their nuances, the VC-founder dynamics during the growth phase of the company, and pitching to VCs (and how to select the right VC partners). I also liked the last section on the views of VCs across different markets (the notable missing market was India).
The actual operational stories from the various portfolio companies and beyond provide a realistic picture of the ups and downs of the entrepreneurial journey. Though in some places, the book lacks depth as it crosses between in being a memoir of sorts and a guidebook. However, this is a good book for first-time entrepreneurs who are looking to raise funds.
The actual operational stories from the various portfolio companies and beyond provide a realistic picture of the ups and downs of the entrepreneurial journey. Though in some places, the book lacks depth as it crosses between in being a memoir of sorts and a guidebook. However, this is a good book for first-time entrepreneurs who are looking to raise funds.
May 24, 2020
The book is stacked with VC and startup stories. I find the parts where he shares motives and common drama scenarios very insightful.
He does highlight the importance of some topics in the termsheet... may be three routes or drivers to IPO but not much detailed.
As the book comes close to the end, I feel a bit of rush and random thoughts. The book to its middle is rather organized and gives general sense about what to expect: starting valuation, time between rounds, time to IPO,... and common F!!!Up scenarios.
I enjoyed the book as a quick read, intro but wouldnt recommend it to someone will actually close a deal.I would rather consider it as a great intro to the whole game.
He does highlight the importance of some topics in the termsheet... may be three routes or drivers to IPO but not much detailed.
As the book comes close to the end, I feel a bit of rush and random thoughts. The book to its middle is rather organized and gives general sense about what to expect: starting valuation, time between rounds, time to IPO,... and common F!!!Up scenarios.
I enjoyed the book as a quick read, intro but wouldnt recommend it to someone will actually close a deal.I would rather consider it as a great intro to the whole game.
April 10, 2017
Well summarized basic info.
Read
April 9, 2025"Mastering the VC Game" by Jeffrey Bussgang is a thoughtful and accessible exploration of how visionary entrepreneurs and venture capitalists collaborate to bring bold ideas to life. It opens with a recognition of the spark many people feel—a moment of inspiration, the dream of making a meaningful impact. Yet between that initial flash and building something real, the road is long and complicated. The book guides readers through the unseen mechanics and emotional undertones that make up the startup-to-success journey, shedding light on the relationships, decisions, and strategies that shape groundbreaking ventures.
At the core of this journey is the founder’s mindset. Contrary to the common assumption that entrepreneurs are primarily driven by money, Bussgang argues that the most successful founders are driven by something deeper—a need to change the world. These individuals are marked by a unique mix of idealism and realism. They possess a magnetic confidence that draws people in, but also a healthy paranoia that helps them anticipate risk. Take Christoph Westphal, who left a secure, high-paying job to start Sirtris Pharmaceuticals because he believed he could slow the aging process. His team believed so strongly in the idea, they tested early formulations on themselves, arriving at investor meetings visibly marked by injections. It was this unwavering belief, tempered by awareness of the odds, that made investors take notice. Westphal admitted there was a low chance of success, but the potential upside was enormous. This kind of honesty, coupled with ambition, builds trust.
Another example is Reid Hoffman, who after helping grow PayPal, founded LinkedIn not to make money, but to empower individuals in an evolving job market. He saw traditional career paths dissolving and believed people needed tools to navigate that change. Despite early skepticism from investors who found his idea too narrow, Hoffman persisted. Like Westphal, he represents the sort of founder whose mission-driven thinking helps sustain them through challenges and skepticism. These entrepreneurs aren’t just trying to build businesses—they’re trying to reshape how we live, work, and connect.
To turn big ideas into successful companies, however, founders often need more than vision—they need venture capital. The VC world is small but powerful. A relatively small group of professionals, mostly concentrated in major hubs like Silicon Valley and Boston, make investment decisions that shape a significant chunk of the economy. VCs come in many flavors—some cast wide nets globally, like Tim Draper, while others go deep into niche markets, like David Hornik. Some firms focus on early-stage, high-risk opportunities, while others invest large sums in more mature startups. Their strategies vary, but what unites them is a need to generate outsized returns. To do so, they sift through hundreds of pitches, ultimately betting on only a few.
Understanding how to engage this elite group is crucial. Cold outreach almost never works. Founders must learn to navigate social networks and find warm introductions. Once they land a meeting, the way they present themselves is just as important as the content of the pitch. Many investors, like Fred Wilson, form opinions quickly, often within the first 15 minutes. Smart founders sense this and adapt on the fly, checking in to gauge interest. Emotional intelligence matters as much as financials. A strong pitch highlights a unique advantage, shows evidence of traction, and doesn’t try to hide risk. In fact, admitting the risks, while making a case for the upside, often increases credibility.
But a pitch isn’t a one-time event. Some of the most effective founders build relationships with investors over time, showing them progress at each stage. Eric Paley, for example, secured funding for his company by engaging with investors over the course of a year, letting them witness the business develop. This “movie” of progress is far more compelling than a one-off snapshot. Demonstrating the ability to execute, grow, and adjust makes investors more comfortable placing a bet.
Once a VC expresses interest, the real negotiation begins. Founders must evaluate not only the money being offered but also who they’re partnering with. The chemistry between a founder and investor is vital. Entrepreneurs like Jack Dorsey have stressed how choosing a VC is like hiring a boss you can’t fire. The best VCs bring more than capital—they offer guidance, recruiting help, and valuable pattern recognition built from working with many other companies. Fred Wilson describes himself as a trusted consigliere, someone who can help a CEO think through critical moments without taking over.
Negotiating the terms of a deal is more nuanced than most people realize. While valuation grabs headlines, control provisions can be just as significant. These include who sits on the board, who has final say on major decisions, and what happens in different exit scenarios. Founders must be clear-eyed, balancing their excitement about securing funding with the need to protect their vision and role in the company.
However, funding is only the beginning. Building a company is rarely a smooth process. The book compares the journey to three phases: hacking through the jungle, driving down a bumpy dirt road, and eventually speeding along a highway. In the jungle phase, chaos reigns. There’s no clear plan, and the team is constantly adjusting. Metrics like buzz or user excitement may be more important than revenue. Eventually, the business stabilizes somewhat, and revenue becomes more central. Finally, on the highway, the focus shifts to efficiency and profitability, often requiring a different type of leadership and discipline.
Each phase brings new challenges and tensions, especially between founders and investors. One of the most painful but common situations occurs when a board loses faith in the founder. At first, admiration is high, but over time, if targets are missed or communication falters, doubt creeps in. Boards may start gathering information independently, signaling a loss of trust. This often ends with the founder being replaced—a difficult but sometimes necessary evolution in a company’s life.
The end goal for many startups is an exit—usually a sale or an IPO. For founders, this moment is emotionally charged. It represents the culmination of years of work, personal sacrifices, and dreams. For VCs, however, it’s a business decision—a chance to return capital and show results. Founders must weigh various factors: their passion for the business, the opportunity cost of continuing, advice from trusted allies, and the needs of their family or team. Sometimes, a good offer is simply too good to pass up, even if there’s more growth ahead. Timing and strategy are everything. Eric Paley’s sale of Brontes to 3M was not a lucky break—it was the result of careful positioning, educating potential buyers, and creating a sense of competition.
In the end, "Mastering the VC Game" reveals that success in the startup world isn’t just about having a big idea or being persuasive. It’s about cultivating resilience, making smart partnerships, and learning to navigate the ever-changing terrain with both vision and pragmatism. The book offers both practical guidance and an emotional roadmap for anyone looking to build something meaningful. Whether you’re a first-time founder or simply curious about how great ideas become companies, Bussgang’s insights offer a valuable glimpse behind the scenes of innovation.
At the core of this journey is the founder’s mindset. Contrary to the common assumption that entrepreneurs are primarily driven by money, Bussgang argues that the most successful founders are driven by something deeper—a need to change the world. These individuals are marked by a unique mix of idealism and realism. They possess a magnetic confidence that draws people in, but also a healthy paranoia that helps them anticipate risk. Take Christoph Westphal, who left a secure, high-paying job to start Sirtris Pharmaceuticals because he believed he could slow the aging process. His team believed so strongly in the idea, they tested early formulations on themselves, arriving at investor meetings visibly marked by injections. It was this unwavering belief, tempered by awareness of the odds, that made investors take notice. Westphal admitted there was a low chance of success, but the potential upside was enormous. This kind of honesty, coupled with ambition, builds trust.
Another example is Reid Hoffman, who after helping grow PayPal, founded LinkedIn not to make money, but to empower individuals in an evolving job market. He saw traditional career paths dissolving and believed people needed tools to navigate that change. Despite early skepticism from investors who found his idea too narrow, Hoffman persisted. Like Westphal, he represents the sort of founder whose mission-driven thinking helps sustain them through challenges and skepticism. These entrepreneurs aren’t just trying to build businesses—they’re trying to reshape how we live, work, and connect.
To turn big ideas into successful companies, however, founders often need more than vision—they need venture capital. The VC world is small but powerful. A relatively small group of professionals, mostly concentrated in major hubs like Silicon Valley and Boston, make investment decisions that shape a significant chunk of the economy. VCs come in many flavors—some cast wide nets globally, like Tim Draper, while others go deep into niche markets, like David Hornik. Some firms focus on early-stage, high-risk opportunities, while others invest large sums in more mature startups. Their strategies vary, but what unites them is a need to generate outsized returns. To do so, they sift through hundreds of pitches, ultimately betting on only a few.
Understanding how to engage this elite group is crucial. Cold outreach almost never works. Founders must learn to navigate social networks and find warm introductions. Once they land a meeting, the way they present themselves is just as important as the content of the pitch. Many investors, like Fred Wilson, form opinions quickly, often within the first 15 minutes. Smart founders sense this and adapt on the fly, checking in to gauge interest. Emotional intelligence matters as much as financials. A strong pitch highlights a unique advantage, shows evidence of traction, and doesn’t try to hide risk. In fact, admitting the risks, while making a case for the upside, often increases credibility.
But a pitch isn’t a one-time event. Some of the most effective founders build relationships with investors over time, showing them progress at each stage. Eric Paley, for example, secured funding for his company by engaging with investors over the course of a year, letting them witness the business develop. This “movie” of progress is far more compelling than a one-off snapshot. Demonstrating the ability to execute, grow, and adjust makes investors more comfortable placing a bet.
Once a VC expresses interest, the real negotiation begins. Founders must evaluate not only the money being offered but also who they’re partnering with. The chemistry between a founder and investor is vital. Entrepreneurs like Jack Dorsey have stressed how choosing a VC is like hiring a boss you can’t fire. The best VCs bring more than capital—they offer guidance, recruiting help, and valuable pattern recognition built from working with many other companies. Fred Wilson describes himself as a trusted consigliere, someone who can help a CEO think through critical moments without taking over.
Negotiating the terms of a deal is more nuanced than most people realize. While valuation grabs headlines, control provisions can be just as significant. These include who sits on the board, who has final say on major decisions, and what happens in different exit scenarios. Founders must be clear-eyed, balancing their excitement about securing funding with the need to protect their vision and role in the company.
However, funding is only the beginning. Building a company is rarely a smooth process. The book compares the journey to three phases: hacking through the jungle, driving down a bumpy dirt road, and eventually speeding along a highway. In the jungle phase, chaos reigns. There’s no clear plan, and the team is constantly adjusting. Metrics like buzz or user excitement may be more important than revenue. Eventually, the business stabilizes somewhat, and revenue becomes more central. Finally, on the highway, the focus shifts to efficiency and profitability, often requiring a different type of leadership and discipline.
Each phase brings new challenges and tensions, especially between founders and investors. One of the most painful but common situations occurs when a board loses faith in the founder. At first, admiration is high, but over time, if targets are missed or communication falters, doubt creeps in. Boards may start gathering information independently, signaling a loss of trust. This often ends with the founder being replaced—a difficult but sometimes necessary evolution in a company’s life.
The end goal for many startups is an exit—usually a sale or an IPO. For founders, this moment is emotionally charged. It represents the culmination of years of work, personal sacrifices, and dreams. For VCs, however, it’s a business decision—a chance to return capital and show results. Founders must weigh various factors: their passion for the business, the opportunity cost of continuing, advice from trusted allies, and the needs of their family or team. Sometimes, a good offer is simply too good to pass up, even if there’s more growth ahead. Timing and strategy are everything. Eric Paley’s sale of Brontes to 3M was not a lucky break—it was the result of careful positioning, educating potential buyers, and creating a sense of competition.
In the end, "Mastering the VC Game" reveals that success in the startup world isn’t just about having a big idea or being persuasive. It’s about cultivating resilience, making smart partnerships, and learning to navigate the ever-changing terrain with both vision and pragmatism. The book offers both practical guidance and an emotional roadmap for anyone looking to build something meaningful. Whether you’re a first-time founder or simply curious about how great ideas become companies, Bussgang’s insights offer a valuable glimpse behind the scenes of innovation.
March 22, 2019
Great book, it's straight to the point and very insightful.
At first I thought the book would be a little out of date, since it was published back in 2010. But it's still very relevant and helpful.
I like the fact that it's not all just theory, but actually quite practical with many examples and stories.
Highly recommend it to both entrepreneurs and investors trying to have a better perspective on what goes on inside the VC world. Really appreciate the effort Jeff Bussgang put into collecting thoughts from many other well-known investors.
The book has a perfect balance of personal experience (Jeff's) with other "external points of view".
At first I thought the book would be a little out of date, since it was published back in 2010. But it's still very relevant and helpful.
I like the fact that it's not all just theory, but actually quite practical with many examples and stories.
Highly recommend it to both entrepreneurs and investors trying to have a better perspective on what goes on inside the VC world. Really appreciate the effort Jeff Bussgang put into collecting thoughts from many other well-known investors.
The book has a perfect balance of personal experience (Jeff's) with other "external points of view".
June 21, 2014
A book you must read before even thinking to raise capital
The book starts with the importance of an entrepreneurial itch and walks through pitching successfully and then talks about the relation of an entrepreneur and VCs. Jeffrey lays out an exciting but tough journey an entrepreneur has to take. And how he can build a fruitful relation with VC by understanding them. There are many insights from successful entrepreneurs like LinkedIn's founder Reid Hoffman and Venture Capitalists alike....
This book's advice will keep influencing my thoughts when I venture upon my journey.
The book starts with the importance of an entrepreneurial itch and walks through pitching successfully and then talks about the relation of an entrepreneur and VCs. Jeffrey lays out an exciting but tough journey an entrepreneur has to take. And how he can build a fruitful relation with VC by understanding them. There are many insights from successful entrepreneurs like LinkedIn's founder Reid Hoffman and Venture Capitalists alike....
This book's advice will keep influencing my thoughts when I venture upon my journey.
September 13, 2025
The Entrepreneur
An entrepreneur must project confidence, passion, and authentic leadership. To succeed, they must persuade:
- Investors, to risk capital in an idea that may be little more than a vision.
- Talented professionals, to join a company that may not yet truly exist, with no guarantee of growth or stability.
- Early customers, to try an unproven product or service.
Key tools and practices:
-Advisory Boards: Attract outstanding experts, creating credibility and a self-fulfilling aura of success even before real traction exists.
-“Eating your own dog food”: Using your own technology signals commitment and seriousness to investors.
-Inspiration and confidence are essential: people must believe in the entrepreneur before they can believe in the company.
The Venture Capitalist (VC)
VCs thrive on intellectual adventure, exposure to brilliant ideas, and the chance to make a positive impact. Unlike entrepreneurs, they prefer emotional detachment, acting as backers and facilitators rather than stars.
Traits of successful VCs:
-Intelligent, insatiably curious, competitive
-Driven to succeed, often geeky/nerdy
-Able to balance rational analysis with instinct and personal chemistry
VC roles and structures:
-General Partners (GPs / Managing Directors): Senior decision-makers, sit on boards, decide investments.
-Principals: ~3–6 years post-MBA, source deals, perform due diligence.
-Associates: Support partners and principals.
-Entrepreneurs in Residence (EIRs): Former CEOs brought in short-term (6–12 months) to explore new ventures.
-Limited Partners (LPs): Provide capital (universities, pension funds, sovereign wealth funds, wealthy families, funds of funds).
VC Investment Strategy
-Fund size matters: Too much money creates excessive dilution; too little creates risk of running short at critical moments. The “right fit” is key.
-Stage focus varies: Some firms specialize in early stage (Series A, $4–6M, often syndicated); others in later/larger rounds.
-Returns: VC funds target 5–10x return within 3–5 years. A single “home run” drives fund performance.
VC Economics
-Fund Life: Typically 10–12 years (3–4 years investment period, then harvest phase).
-Fees and Carry:
-Management fees: ~2% annually of assets under management.
-Carried interest: ~20% of profits after LPs recover their original investment (“1x”).
Associates/principals rarely have carry; junior partners only small portions.
Compensation splits among partners are a major internal issue.
The Pitch and Deal Process
-Only ~1 in 300 companies reviewed gets funded.
-Warm introductions are critical; cold emails are ineffective.
-Due diligence covers market research, customer references, competition analysis, technology evaluation, and management reference checks.
-Final investment decisions require consensus; any partner can typically veto.
What VCs look for:
-A compelling vision in their target sector.
-A strong team with an “unfair advantage” to execute.
-Chemistry and trust with the entrepreneur (“like a marriage”).
- The right market timing and scale.
Value VCs Provide Beyond Capital
-Strategic guidance (acting as counsellors).
-Recruiting (helping build strong teams).
-Business development (introductions to customers, partners, technology providers).
-Future financing (follow-on investments and introductions to other investors).
Chemistry and trust are essential: “When you choose a VC, you are choosing a boss you cannot fire.”
The Term Sheet
-The Term Sheet (TS) is a non-binding outline of financing terms. Two issues matter most: Economics and Control.
Economics
Valuation:
-Pre-money valuation: Value before VC money.
-Post-money valuation: Pre-money + new investment.
Typically $4–6M raised at Series A; pre-money often < $10M.
VC aims for 20–30% ownership.
Option Pool: Stock options for future hires, usually carved out of founders’ equity.
Liquidation Preferences: Define payout order in exits:
-Fully Participating Preferred: Investors get their preference (e.g., 1x invested capital) plus share pro-rata in remaining proceeds. Strongly favors investors.
-Non-Participating Preferred: Investors choose either their liquidation preference (e.g., 1x or 2x invested capital) or to convert to common and share pro-rata—but not both. More balanced.
-Capped Participation: Investors participate up to a cap (e.g., 2x total return); above the cap, they must convert to common. Provides upside sharing but limits investor overreach.
Control
Board composition: Typically 5 members (2 VC, 1 CEO, 1 common shareholder, 1 independent). If VCs choose the independent, they effectively control the board.
-Protective provisions: Require VC approval for major decisions (M&A, debt, large investments).
-Voting thresholds: Supermajorities and drag-along rights.
-Reality: When things go poorly, VCs often hold control since they control the capital.
An entrepreneur must project confidence, passion, and authentic leadership. To succeed, they must persuade:
- Investors, to risk capital in an idea that may be little more than a vision.
- Talented professionals, to join a company that may not yet truly exist, with no guarantee of growth or stability.
- Early customers, to try an unproven product or service.
Key tools and practices:
-Advisory Boards: Attract outstanding experts, creating credibility and a self-fulfilling aura of success even before real traction exists.
-“Eating your own dog food”: Using your own technology signals commitment and seriousness to investors.
-Inspiration and confidence are essential: people must believe in the entrepreneur before they can believe in the company.
The Venture Capitalist (VC)
VCs thrive on intellectual adventure, exposure to brilliant ideas, and the chance to make a positive impact. Unlike entrepreneurs, they prefer emotional detachment, acting as backers and facilitators rather than stars.
Traits of successful VCs:
-Intelligent, insatiably curious, competitive
-Driven to succeed, often geeky/nerdy
-Able to balance rational analysis with instinct and personal chemistry
VC roles and structures:
-General Partners (GPs / Managing Directors): Senior decision-makers, sit on boards, decide investments.
-Principals: ~3–6 years post-MBA, source deals, perform due diligence.
-Associates: Support partners and principals.
-Entrepreneurs in Residence (EIRs): Former CEOs brought in short-term (6–12 months) to explore new ventures.
-Limited Partners (LPs): Provide capital (universities, pension funds, sovereign wealth funds, wealthy families, funds of funds).
VC Investment Strategy
-Fund size matters: Too much money creates excessive dilution; too little creates risk of running short at critical moments. The “right fit” is key.
-Stage focus varies: Some firms specialize in early stage (Series A, $4–6M, often syndicated); others in later/larger rounds.
-Returns: VC funds target 5–10x return within 3–5 years. A single “home run” drives fund performance.
VC Economics
-Fund Life: Typically 10–12 years (3–4 years investment period, then harvest phase).
-Fees and Carry:
-Management fees: ~2% annually of assets under management.
-Carried interest: ~20% of profits after LPs recover their original investment (“1x”).
Associates/principals rarely have carry; junior partners only small portions.
Compensation splits among partners are a major internal issue.
The Pitch and Deal Process
-Only ~1 in 300 companies reviewed gets funded.
-Warm introductions are critical; cold emails are ineffective.
-Due diligence covers market research, customer references, competition analysis, technology evaluation, and management reference checks.
-Final investment decisions require consensus; any partner can typically veto.
What VCs look for:
-A compelling vision in their target sector.
-A strong team with an “unfair advantage” to execute.
-Chemistry and trust with the entrepreneur (“like a marriage”).
- The right market timing and scale.
Value VCs Provide Beyond Capital
-Strategic guidance (acting as counsellors).
-Recruiting (helping build strong teams).
-Business development (introductions to customers, partners, technology providers).
-Future financing (follow-on investments and introductions to other investors).
Chemistry and trust are essential: “When you choose a VC, you are choosing a boss you cannot fire.”
The Term Sheet
-The Term Sheet (TS) is a non-binding outline of financing terms. Two issues matter most: Economics and Control.
Economics
Valuation:
-Pre-money valuation: Value before VC money.
-Post-money valuation: Pre-money + new investment.
Typically $4–6M raised at Series A; pre-money often < $10M.
VC aims for 20–30% ownership.
Option Pool: Stock options for future hires, usually carved out of founders’ equity.
Liquidation Preferences: Define payout order in exits:
-Fully Participating Preferred: Investors get their preference (e.g., 1x invested capital) plus share pro-rata in remaining proceeds. Strongly favors investors.
-Non-Participating Preferred: Investors choose either their liquidation preference (e.g., 1x or 2x invested capital) or to convert to common and share pro-rata—but not both. More balanced.
-Capped Participation: Investors participate up to a cap (e.g., 2x total return); above the cap, they must convert to common. Provides upside sharing but limits investor overreach.
Control
Board composition: Typically 5 members (2 VC, 1 CEO, 1 common shareholder, 1 independent). If VCs choose the independent, they effectively control the board.
-Protective provisions: Require VC approval for major decisions (M&A, debt, large investments).
-Voting thresholds: Supermajorities and drag-along rights.
-Reality: When things go poorly, VCs often hold control since they control the capital.
June 19, 2020
This was a well-structured book that gave me a clearer sense of the start-up journey. I particularly appreciated its insights on the VC-entrepreneur personal dynamic, which were illuminating for me, speaking as someone who is interested in raising capital but is more experienced with public sector and non-profit funding mechanisms. I also appreciated Bussgang's explanations on ways in which entrepreneurs and VCs can become misaligned. The book's wide scope and chronological storytelling approach makes it a very useful foundation for further reading. Granted, at times the story focuses too much on Bussgang's personal stories, but these stories don't crowd out the book's general insights and they serve as a reminder that these insights are rooted in the experiences of one person. The book is easy to read, and has the curious effect of feeling both dense and airy. Its strongest when it focuses on the intimate, concrete dynamics of VC funding, and gets weaker when it tries to tackle larger, more abstract topics in an overly-reductive way -- a key example of that being its closing tour of international venture capital environments, which felt pointless since the insights given were too general to be useful (how do you summarize Europe and China?).
March 6, 2022
Really love Jeff's tactical, actionable advice - this is like a behind-the-scenes breakdown of the venture fundraising process that every entrepreneur dreams of having access to! The author takes the time to dive into the fine details, including answering key questions like: what are the 4 areas of value great VCs offer to founders (beyond the $)? What metrics should I have in place at different capital raise stages of my startup? What should I be looking for in great board directors (and archetypes to avoid)? How to set expectations (for yourself and your investors) around exit? A quick playbook 100% worth reading for founders considering raising venture.
April 7, 2022
The title should be VC Game 101 instead
3.75 stars
(3 stars for the audiobook)
Great overview of the VC world but as other reviewers noted as well, it doesn't go into a lot of detail. The first part of the book focuses mostly on the author's background and the people the author knows, so I thought it was mostly going to be about bragging but I was happy to be wrong. The later parts of the book were very informative but the book aged and it didn't age well. It's still nice and relevant to understand the basics of the VC world, but always keep in mind that it was published in 2010 while you read the book.
3.75 stars
(3 stars for the audiobook)
Great overview of the VC world but as other reviewers noted as well, it doesn't go into a lot of detail. The first part of the book focuses mostly on the author's background and the people the author knows, so I thought it was mostly going to be about bragging but I was happy to be wrong. The later parts of the book were very informative but the book aged and it didn't age well. It's still nice and relevant to understand the basics of the VC world, but always keep in mind that it was published in 2010 while you read the book.
October 5, 2024
Although this book hasn't had any new editions since its initial release in 2010, it offers many compelling stories of founders and VCs. It provides valuable insights into the mindset of investors and the dynamics they share with entrepreneurs. The path to breaking into venture capital can follow several routes, and developing curiosity and building a genuine network are key components for success. For anyone eager to learn more about this often opaque industry, I found this book to be an informative and worthwhile read!
October 9, 2021
As a practicing VC I can certainly vouch that this book accurately and clearly explains how VCs do their work.The book shares accounts of the best in the business in order for you to learn from their successes. This book is both comprehensive touching on the history of venture capital as well as present day conditions and highly readable. Bussgang uses real-world examples to illustrate his points.
July 26, 2024
Some interesting stories and a lot of overview of the industry. I was left with questions about how much VC is anticipating vs picking winners and how many of these supposedly valuable companies go belly up and VC's contribution to hyping those collapses. This was not the book to address those questions, though they arise on the fringes. Useful general view, but also a bit of advocacy/cheerleading for the industry.
March 26, 2017
Excellent book if you are fascinated with the venture capital business
Jeff dies am excellent job off explaining in concise detail with many personal anecdotes his experience in the venture capital business. I would highly recommend this book to anyone who is interested in this world.
Jeff dies am excellent job off explaining in concise detail with many personal anecdotes his experience in the venture capital business. I would highly recommend this book to anyone who is interested in this world.
March 23, 2019
Great read about the VC industry
This book was very informative, full of inspiring and interesting stories about the success of venture-backed companies all over the world.
It really gives you great insight about the kind of relationship a VC has with the founders of a company, and wether you’re one or the other, you will learn a great deal in this book.
This book was very informative, full of inspiring and interesting stories about the success of venture-backed companies all over the world.
It really gives you great insight about the kind of relationship a VC has with the founders of a company, and wether you’re one or the other, you will learn a great deal in this book.
April 4, 2021
A quick and easy ready for someone with little knowledge of the industry and wants a crash course. My only piece of criticism would be that the book is dated. The references to are to companies in the early 2010s. As I read it I found myself thinking that a lot must have changed in the last decade. Still recommended it though.
May 21, 2021
The book will help you layout the groudwork by explaining the VC lingo like Term Sheet, Liquidation Preference, Pre Money, Post Money, etc. It also contains accounts of Entrepreneurs that had great exits for the VC funds.
Biggest Takeaway: if you didn’t go to a prestigious school in the states, you can kiss the VC dream a goodbye.
Biggest Takeaway: if you didn’t go to a prestigious school in the states, you can kiss the VC dream a goodbye.
October 29, 2017
Good intro to VC. Lots of stories and profiles of folks in the industry. It is not as technically detailed as Brad Feld's book though which covers most of the legal aspects as well as financial aspects.
April 15, 2018
Compared to some of the other VC books I have read, this is heavier on the war stories and lighter on the details. The underlying principle are there, but I'd see this more as a lighter introduction to many of the issues rather than a detailed discussion.
May 27, 2018
Gives a basic understanding of the VC structure and step by step description of funding startups. The book is designed for general people, lacking technical details. A concise, easy to read and articulated write up backed by real life experience of a VC practitioner.
October 1, 2020
This is one of the best books on the relationship between venture capital and entrepreneurs. The author really delves into the industry and details all the nuances and behind the scenes of tough negotiations and how to onboarding a new investor in your startup. Worth reading!
October 28, 2021
3.5 stars - I found about 45% of this book helpful brass tacks. The rest, the anecdotes and case studies, varied wildly, and I feel like you can skip the last 20% of the book re: VC around the world because it already feels pretty provincial/dated
November 15, 2022
Didn’t enjoy this book at all. As someone working in a VC find, this was very unhelpful. It’s just praising people who went to Harvard and Stanford. Nothing technical or motivational for that matter.
February 28, 2024
More anecdotal (like Investors vs. Founder by Jerry Neumann and Liz) than technical (like Venture Deals by Brad Feld and the Secrets of Sand Hill Road by Scott Kupor). Written in 2010 and showing some age.
February 28, 2024
Phenomenally underrated book. Absolutely amazing to go through the entire process from start to finish with 3 examples and from across the globe.
It really does show you the inside view of the VC mentality.
It really does show you the inside view of the VC mentality.
July 4, 2017
Interesting book to learn about the VC industry basic concepts. Contains a lot of anecdotes. I wouldn't recommend if you want greater detail about the subject matter.
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