Nivi: To get into good deals, you must give startups a reason to pick you over other investors. You need a brand. Typically, this means adding value to the startup in some unique way. Let’s talk about 101 different ways to build a brand.
Naval: This is the meat of it, the heart of it. We’ll get into how you develop judgment and the ins and outs of raising capital. All of that is secondary.
The single most important thing is having the ability to get into a deal that you want to get in to—that’s access. The way you get access is by building a brand.
A brand is an authentic reputation you have with founders and investors that tells people around the table, “Let’s invite this person to invest in our round, even though it’s scarce and everybody wants in now that the signals are there.”
So how do you build a brand?
Investing in winners is the best way to build a brand
The classic brands in the venture business developed reputations for making great investments. Sequoia was built this way. Andreessen was partially built this way, where you pay more for deals in later rounds. You associate yourself with the company’s brand, and then you use that to get into earlier, hotter deals.
It’s a tautology: Invest in the winning companies, and you’ll develop a brand that lets you invest in winning companies. But that’s circular; it doesn’t help you much.
You can build a brand through content
Another way to build a brand is to provide something new that’s pro-founder. This could be a stance: Andreessen Horowitz is famous for its founder-friendly stance; they want to see the founders run the company.
It could be content. I built a brand through Twitter. Elad Gil developed his brand partly by writing the High Growth Handbook. Reid Hoffman also wrote books, though he also has many other reasons to have a good brand.
You can build a brand through blogging. When he was getting started, Paul Graham wrote amazing pieces that attracted people to YC and Hacker News. Fred Wilson still maintains the most popular blog in venture capital at AVC. Brad Feld laid out the mechanics of VC investing—allowing him to run a fund out of Boulder, which is unusual.
Back in the day, David Hornik, Andrew Anker and I started VentureBlog, one of the first venture-related blogs. We should have stuck with it.
Many investors built great brands with a very founder-friendly stance and by providing content, networks, software, platforms or access for entrepreneurs that did not exist before.