Five Books for Venture Capital
Or what I wish I had known
Students and people early in their careers often ask me how I made the transition from journalist to venture capitalist. The answer—luck, chance and the largess of many founders and investors— is unsatisfying because it’s impossible to replicate in an ordered way. But the thing I wished that I had throughout my journey was a better roadmap—a guide for the perplexed, if you will— that could have helped me be more discerning in the early years.
Venture capital is both solitary and socratic in nature. It requires reason and revelation— and the judgment to know which takes precedence at any given moment. As someone who knew little about venture capital when I pursued it, many people suggested books to read about the industry. They sent me to podcasts and blogs from famous investors to understand the stories, the case studies and language of the business. All of these were important and enjoyable, but no one sent me books that helped me decide whether this career could become a calling. And it was through stumbling upon some books during my search for a meaningful career that helped me build conviction in this field and my place in it.
Thinking of jobs as callings rather than careers changes the nature of how and why you work. It takes you outside of yourself and allows for a more honest assessment of what the world demands from you. These books helped me figure out what’s demanded of me. They highlight the five elements of the job that I believe a person must accept and truly own to become a venture capitalist. Note that these books are sequenced in the order I discovered them. The first book predated my entry into venture capital. I read the second and third during my first few months as an intern at a venture capital firm. I read the fourth during my first month as an associate. And the fifth is a practical guide to the thorny human questions you’ll encounter every day. These books are all important, though their significance will mean more at different times in your day, your career and your life. I’ve read them multiple times because I think they carry truths about this practice and the incredible times we’re living in. I hope they’re as helpful to you as they are to me.
1. Philosophy: Zero to One: Notes on Startups, or How to Build the Future, Peter Thiel
The unfortunate reality about venture capital is that one doesn’t need a coherent thesis or philosophy to become successful. There are very good venture capitalists that follow signal and read trends, and I’m sure they enjoy their jobs and the fruits of their successes.
But there are investors who are guided by a different code, and their experience of what they’re building is likely more profound because of it. Zero to One is the canonical example of venture capital as philosophy. It explains how having a deterministic view of the future—which every exceptional founder you work with will have— is ultimately the key to pursuing venture as a calling rather than a career. I recommend starting with this book as an introduction to technology’s purpose and what’s at stake when you show up to every meeting. Zero to One demonstrates the seriousness that a budding investor should have before pursuing the field: not with the mindset of a money manager or a broker, but with the mindset of a perpetual student pursuing truths and supporting the founders who expose them. By holding this belief— that there are truths you must uncover and help magnify—you will empathize with founders in a way that cannot be faked (though it will no doubt often be mocked).
2. Mechanics: Venture Deals: Be Smarter Than Your Lawyer or Venture Capitalist, Brad Feld and Jason Mendelson
When I first arrived at business school, I was what is known as a “nontraditional candidate.” This was a polite way of saying I was clueless about the world of business and there solely to be a foil to the other students. Most of learning a new culture is immersion, and to prepare myself for business school I spent a summer reading the Wall Street Journal cover to cover every day. The fine details of a particular merger on page A27 might as well have been written in Latin, but by the end of the summer, I had read most jargon and could say it with some degree of confidence in front of the very important business people I would meet.
One business word I had not yet heard was “catcalling.” On the second day of my internship, one of the partners referred to the upcoming catcall. Never afraid of the dumb question, I turned to him and asked “what’s a catcall?” After pausing for a few moments, he politely informed me that a cap call, or a capital call, is when a firm requests a portion of pledged capital from the firm’s limited and general partners.
That night, I went home embarrassed but with a copy of “Venture Deals.” Written for founders and investors alike, it is the quickest way to immerse oneself in the glossary of venture capital, which one should familiarize oneself with to avoid the many embarrassing mistakes I made in the early years of my career. You’ll still slip up, of course, but immersion in the mechanics of venture is helpful, and there’s no quicker way to learn it. You’ll often hear young investors discussing financial mechanics, and that’s a tell that they’ve done the bare minimum of study. Know the mechanics—they’ll hasten the awkward teething period of your early days— but don’t dwell on them. They’re definitely not the point of the job.
3. Strategy: Ready Player One, Ernest Cline
Among the best advice I’ve ever received on venture capital came from a competitive gamer. “Venture capital,” he told me, “is a multiplayer strategy game.” I am not an avid gamer, but I’ve always loved strategy games and puzzles. Understanding the day-to-day work of investing not as a practice but as a strategy game was the key to helping me realize that no background or pedigree makes one expertly prepared for a career in venture capital.
Ready Player One is a close simulation of an associate’s role at a venture firm. You will begin your quest alone, discounted and playing against well-resourced and smarter people. You will have allies, but you will not know who they are and they will shift with each play. Seemingly useless knowledge will become important, but you won’t know what useless knowledge is important until later in the game. As you level up, the challenges will become harder and you’ll have to continue mastering the skills of the previous levels while learning new ones. You will have to alter your game play routinely as others emulate your strategy. You will ally with other discounted people and then counted people will begin allying with you, as well. And you will ultimately come head-to-head with those who are clearly superior to you. And in the final rounds, one day, you will realize that because you are in the final round with those who are superior, that perhaps you have learned some things and have earned the chance to be there.
Too many people focus on the final chapters of the investing journey, but the process of learning and seeking—beautifully detailed in Ready Player One—is the real joy of strategy games (and building too). Trophy children may find it an uncomfortable read, and thus, an uncomfortable job. But if you find joy in Parzival’s quest, you’ll likely embrace the chaos of an ever-changing chess board.
4. Futurism: But What if We’re Wrong? Thinking about the present as if it were the past, Chuck Klosterman
It is tempting for a budding investor to believe she is too late to the party. All the secrets are out. All the companies built. It’s too late to build new things. But What If You’re Wrong? is a reminder that we are so early, and that healthy skepticism of the dominant narrative is not only rational, it is one hundred percent guaranteed to be correct in the future. The book—which I truly cannot do justice-- illustrates how wrong we are about most cultural and scientific beliefs throughout history. The reason I encourage reading this early is because much of the venture capitalist’s career will be dotted with the feeling of being absurd, being wrong, and hopelessly out of touch with reality. The future may be just over the horizon or 100 years away, and in a long enough timescale, you will likely be vindicated for many beliefs.
Venture capital is a job where the inevitability of looking and feeling absurd is a large part of the point of it. Your wins will look like losses. Your losses like incredible wins. Nothing will be as it appears and you will often be alone with these feelings of uncertainty. Most people hate the feeling of uncertainty and shy away from potential failure. Successful venture capitalists are often wrong about many things, and somehow, the failure allows for recalibration and learning.
This book illustrates why we feel right when we’re wrong, and vice versa. And why we need people to question and disprove a dominant narrative to push the story forward.
5. Culture: What You Do Is Who You Are: How to Create Your Business Culture, Ben Horowitz
If you’ve read this far, it will become clear that there are no books strictly written for company-building on this list. While many investors will tell you they are “company builders,” I believe that sacred title should be reserved for founders, the people doing just that. While an investor will be enmeshed in helping founders build, the shock to many operators-turned-investors is just how far removed an investor is from the daily pains and lows of being a founder. And that reality—for almost all investors except those who incubate companies— should be noted and treated with reverence. The founder is doing God’s work, not you.
Which leaves us with a thorny question: if investors are indeed bit players in this wild opera, then what is the measure of a good investor? After the strategy, the mechanics, the philosophy, comes the truly human part of this job—and What You Do Is Who You Are is the book that makes sense of all of it. Those late-night phone calls, the introductory emails, the thousands of meetings that make up the hours, days and years.
We know culture is everything, but that is because it is a reflection of belief. Daily choices and small decisions—whether in a high-security prison or the army of Genghis Khan-- ultimately determine exactly who we are and the code by which we and our teams operate. And what I appreciate about this book is how it illuminates something uniquely important for venture capital firms: when everyone is seemingly selling a commodity, differentiation on culture is truly all that matters on the vast time scale discussed in But What If We’re Wrong? Culture is what a founder will experience and remember of you. While your brilliant record will (hopefully) become clear in decades, your reputation is decided in minutes.
The actual job of venture is supporting people doing something far harder than you, whom history will rightfully remember long after you are forgotten. This realization usually comes later for investors, that we are bit players despite our objections. But how wiser and more beautiful one’s rise will be if we’re focused on supporting the heroes from behind the curtain. If we know that this whole thing wasn’t ever really about history or the future but the urgent, unrelenting present.