Secure That First Investor, and the Rest Will ComeVenture capital's dirty little secret: investors don't like going it alone.
BySam Hogg•
This story appears in theJune 2014issue of狗万官方.Subscribe »
The $19 billion acquisition ofWhatsAppby Facebook fascinated me not just for its sheer size but because the primary investor, Sequoia Capital, went it mostly alone. This is highly uncommon in the "me, too" world of venture capital, where everyone appears to invest as part of a syndicate. Indeed, the typical first question out of a VC's mouth when talking to a startup about investing is, "Who's leading this?"
The question points to a paradox about VCs in general. Everyone wants to tout that they're the best at sniffing out the next WhatsApp, but when it comes to putting money behind that startup, they want some other firm to have skin in the game first.