Venture capital is one of the driving forces of technological innovation and economic growth. In principle, the model is simple, with general partners at venture capital firms raising capital from limited partners to invest in promising early and growth-stage companies. However, there are multiple intricacies that every VC, aspiring VC, or entrepreneur should understand to increase the likelihood of the venture capital deal’s success.
Whether you are an experienced venture capitalist, are new to the industry, or trying to get in, you should always be learning, especially in an ever-changing industry like technology and venture capital. Regularly reading books, thought leadership pieces, blogs, and listening to industry podcasts is a must for any investor.
If you are in the process of fundraising and getting ready to launch a fund or starting out in the world of angel investing, we highly recommend you read these books. There is no such thing as too much knowledge.
We have categorized the books in our list by experience level, starting from aspiring VCs, Associates/Analysts, and senior VCs. This way, you will know where to best devote your precious time.
Top Books for the Aspiring Venture Capitalist
These introductory books introduce the reader to basic venture capital and entrepreneurship principles. We recommend you understand these underlying concepts before applying to internships or junior-level positions at venture capital funds, especially if you do not have a business degree.
Secrets of Sand Hill Road: Venture Capital and How to Get It
Secrets of Sand Hill Road, by Scott Kupor, the first employee at the world-famous firm Andreessen Horowitz is probably one of the most acclaimed VC books ever written. It is named after Sand Hill Road, the location of many well-known venture capital firms in Silicon Valley.
This book is full of first-hand experiences and actionable advice for first-time founders. It helps you understand how VCs think and how they make decisions. This is an excellent book for entrepreneurs who want to make their companies (and themselves) more attractive to investors or people interested in learning about the inner workings of venture capital.
The book serves as a “Venture Capital for Dummies” guide for first-time founders or someone interested in learning more about the industry. The author explains the VCs thought process behind evaluating a potential investment and determining an initial valuation.
One of the reasons why we like this book is because of Kupor’s argument that the venture capital landscape has changed in the last couple of decades. Launching a startup today requires fewer resources and capital than ever before, and accelerators like TechStars and Y Combinator provide valuable mentorship and support to entrepreneurs.
This change means VCs need to provide more than just capital if they want to remain competitive and attract the brightest founding teams. Instead, they have to play a role in the company’s success, often by helping it make good decisions and leverage their networks to connect founders with the right people.
Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist
This book by Jason Mendelson and Brad Feld, TechStars founder and founding partners at Foundry Group, a Boulder-based VC firm, is an excellent resource for entrepreneurs, venture capitalists, and even lawyers to learn about the VC processes and strategies. It adds clarity to the discipline of venture capitalism, shows you what it takes to be a successful entrepreneur in the modern world, and discusses strategies for entrepreneurs seeking to raise funds from venture capital firms.
Furthermore, this book breaks down two of the most crucial components of VC investments: the term sheets & valuations. The authors explain how to read and interpret the term sheet, decode the jargon, and help you understand whether VCs are offering you a fair deal—making the book valuable for aspiring investors as well as entrepreneurs seeking VC investments.
“A really great book, full of information and clear examples that uncover a lot of things from the unknown about startups and the VC world,” says one reviewer. “If you are an entrepreneur, an investor, or something in between, you should read the book.”
Fred Wilson, the Managing Partner at Union Square Ventures, says: “My biggest nightmare is taking advantage of an entrepreneur without even realizing it. “This usually happens because VCs are experts in financing, and most entrepreneurs are not. Brad and Jason are out to fix that problem with Venture Deals. This book is long overdue and badly needed.”
All in all, this book offers a reasonable, balanced perspective of the industry, how VCs can find suitable investments, and how entrepreneurs can find the right kind of funding for their projects.
Zero to One: Notes on Startups, or How to Build the Future
Most people in the tech/VC industries are familiar with Peter Thiel, co-founder of PayPal, Palantir, and Founders Fund, and one of the first early investors in Facebook. He’s one of the most famous (perhaps infamous?) players in the investment and technology worlds. His book, Zero to One is a must-read for anyone currently running a company or interested in entrepreneurship.
In this book, Thiel calls on entrepreneurs to create something new. Don’t try to compete in a market. Avoid existing markets entirely. As Thiel says, “don’t go from 1 to n”. Instead, build something so unique that you don’t have any competitors, effectively going from zero to one. The next Bill Gates will not build an operating system. Instead, he will create something unique we do not even know about yet.
“The perfect target market for a startup is a small group of particular people concentrated in a group but served by few or no competitors,” Thiel writes.
VCs would find this book valuable since Thiel provides information and tips on problem/industry selection, a crucial concept they must understand to filter out the most promising investments from the thousands of pitches they hear each year.
We like this book because it’s short and insightful. There’s no fluff. And Thiel doesn’t pull any punches regarding how much work it takes to build a successful business. Skill will always outweigh luck. But, unfortunately, there are no free lunches in the startup world.
Venture Capital is a highly competitive industry; that is why we highly recommend you also read the following books before your interview with a VC fund. The more you can empathize with entrepreneurs and understand their pain points, the better you will do in your interview.
The Lean Startup by Eric Ries: In this foundational book, the author talks about how early-stage startups should use the scientific method to search for a sustainable business model while mitigating risks. This book introduces the minimum viable product (MVP) concept and explains why founders should not rely on the same frameworks used by large corporations. We highly recommend you read this book if you are involved with a startup in any capacity.
Raising Venture Capital for the Serious Entrepreneur by Dermot Berkery: This book is a guide that uses three case studies to explain how VCs arrange financing for companies, including what they are looking for in a company, how they value an early-stage venture, how to structure the term sheet, etc.
Top Books for Venture Capital Analysts or Associates
Congratulations, you landed your dream job and are now working as a Venture Capital Analyst or even got promoted to Associate. You are busy sourcing deals, listening to pitches, conducting diligence, etc. But you can’t just sit back and rest on your laurels. Continuous learning is key to your success as a VC. These are some books you need to read as you continue to grow your career.
The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers
This book is an essential read for anyone who wants to know what it’s like to run a company—written by Ben Horowitz, the co-founder of Andreessen Horowitz and one of the most famed investors in Silicon Valley.
Horowitz takes a brutally honest look at building businesses and discusses his time working at Netscape and leading LoudCloud and OpsWare. He also talks about some of the most challenging parts of being a startup founder and CEO: hiring and firing friends, creating culture, focusing on people, underhanded tactics from competitors, and the tiny yet critical decisions founders are forced to make every day. Finally, he recounts the challenging – and often painful – lessons he learned along the way as an investor, executive, and entrepreneur.
These valuable lessons teach VCs to understand what the founder is going through, which helps them empathize with the founder since, ultimately, they are one of the VC’s customers.
In one stand-out section of the book, Horowitz discusses the difference between a peacetime CEO and a wartime CEO. “My greatest management discovery […] was that peacetime and wartime require radically different management styles,” he writes. “Interestingly, most management books describe peacetime CEO techniques, and very few describe wartime.”
We like this book because it’s written just for CEOs at the top of the game. However, it applies to anyone who wants to run a company (or is already running one). Horowitz is brutally honest yet aspirational.
It comes as no surprise that this book is part of the “Top 48 Best Books for Building a Business”, a list compiled by the Forbes Councils.
Mastering the VC Game: A Venture Capital Insider Reveals How to Get from Start-up to IPO on Your Terms
Mastering the VC Game is an excellent overview of startup financing from both sides of the table. Author Jeffrey Bussgang is an experienced investor who co-founded two startups (one of which went to IPO) before joining Flybridge Capital Partners.
In this book, Bussgang shares his own entrepreneurial story and profiles the journeys of several well-known investors and founders, including Twitter’s Jack Dorsey and LinkedIn’s Reid Hoffman. In addition, he delivers a lot of insight into how entrepreneurs should go about sourcing investments, including finding the right kinds of VC and angel investors and evaluating deals.
The author makes a great point that every investor and founder should understand: Both parties must have similar goals. If goals aren’t aligned, there will never be a healthy relationship. This is so critical for success that finding the right investor is often more important than the deal’s details.
The late Tony Hsieh said it best: “Finding the right VC for you and your company can be a challenging task. Bussgang’s recounting of his experience gives a unique perspective on the VC world and is a compelling read for entrepreneurs.”
The Business of Venture Capital: Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies
With a foreword by Brad Feld, this book was written by Mahendra Ramsinghani, a serial investor with stakes in more than fifty pre-seed and seed-stage companies, founder of Secure Octane (a cybersecurity seed fund), and the former director of venture capital initiatives for the Michigan Economic Development Corporation. Some readers refer to this book as “The definitive guide to demystifying the business of venture capital.
Ramsinghani combines expert knowledge and mountains of experience in The Business of Venture Capital to create a complete treatise on the industry. He covers the whole gamut of topics: raising funds, structuring investments, performing due diligence, determining exit strategies, executing the deal, and more. There are also 25 interviews with leading venture capitalists who add their own insights and opinions and a companion website with some extra resources such as various due diligence checklists to evaluate potential LPs and investments.
We like this book because it’s explicitly written for VCs, not entrepreneurs raising money. So unlike other books on this list, it’s very one-sided. The format is similar to a textbook, without overly complex language or assumptions.
7 Powers: Foundations of Business Strategy
Every VC Analyst and Associate should understand basic business strategy and how to apply it. A sound strategy can be the difference between a business destined for failure versus a meaningful organization that creates value.
In 7 Powers, author Hamilton Helmer- a famed consultant, investor, and professor, introduces a strategic framework to help businesses choose what to focus on. Helmer describes seven powers that provide a benefit designed to augment cash flow, help the company grow, and a barrier or moat that prevents competitors from taking away the benefit.
Using well-known companies such as Netflix, Facebook, Salesforce, and Tiffany’s, Helmer illustrates his points concisely and directly. By following these frameworks, VCs can evaluate potential investments and better understand a startup’s strategy or lack thereof.
The Startup Game by William Draper: According to the author, VCs are more than just investors; they are entrepreneurship coaches, mentors, and allies. In this book, Draper recounts experiences working with Silicon Valley’s top companies and explains how the relationship between entrepreneurs and VCs is crucial for a venture’s success.
Competition Demystified: A Radically Simplified Approach to Business Strategy by Bruce Greenwald: The authors argue that strategy is a set of plans that should focus on competitors. Strategic thinking should only focus on looking outward and creating, protecting, and exploiting competitive advantages—a similar concept to the “moat” or “barrier” from 7 Powers. In essence, the authors explain why organizations should focus on what markets to enter or leave and how to deal with competitors, suppliers, etc. This book offers a straightforward framework for evaluating a business that VCs can leverage.
Books for Senior Venture Capitalists
Even though you are a seasoned investor, there is still a lot more you can learn. So, if you haven’t already, we recommend you take a look at these books.
Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages
Technological Revolutions and Financial Capital is an academic book by British-Venezuelan Carlota Perez, a scholar specializing in the collision of technology and economic development. The book deconstructs the centuries-long relationship between technology and financial bubbles. Her model shows repeated “leaps” of technological advancement over 300 years and how these events impacted the economy (as well as the roles played by finance, state, market, and civil actors).
Why is all this relevant? Because her theories will help you understand (and adapt to) a rapidly changing economy. If a technological boom precedes economic change, how can you – as a venture capitalist – position yourself to benefit? This book shows you how to identify a technological revolution and address upcoming economic problems.
Be warned: This is not a book for novices. Perez doesn’t pull her punches. She expects you to understand complex finance, investing, and tech concepts.
eBoys: The First Inside Account of Venture Capitalists at Work
Randall Stross- a business historian and author who has been studying Silicon Valley for decades, takes readers behind the scenes and inside the heads of the six men who founded Benchmark, one of The Valley’s most storied VC firms. With investments in eBay, Uber, Twitter, and many other technology giants, Benchmark is undoubtedly a titan in the world of venture capital.
Even though this book was published over 20 years ago, Stross’s unrivaled access to the partners at Benchmark gave him a front-row seat to the conversations, meetings, and decision-making process of the most brilliant minds in the business.
We like this book because it provides a first-person account of the partners at Benchmark and how they became intimately involved in each of their portfolio companies by advising them on strategy, execution, and recruiting. Regardless of their success, the partners had their feet planted firmly on the ground, never deviating from their original goal to find and nurture new businesses.
Troublemakers: Silicon Valley’s Coming of Age
Leslie Berlin’s Troublemakers is a deeply researched narrative that tells the story of Silicon Valley by focusing on seven pioneers who gave us breakthrough technologies such as the internet and microprocessors. During the 1970s and 80s, The Valley transformed itself to become the heart of America’s economic engine by bringing together a cast of men and women who chased innovation and ended up changing the world.
Five industries, personal computing, biotechnology, modern venture capital, video games, and semiconductor logic, emerged from Silicon Valley in just a few years. In this book, Berlin explains how the perfect combination of factors came together at the right time to foster this ecosystem that spawned an unprecedented level of innovation.
Steve Jobs claimed that “you can’t really understand what is going on now unless you understand what came before.” With the tech industry facing several unprecedented issues over sexism, privacy, public trust, etc., VCs should take the time to understand how early Silicon Valley trailblazers overcame the challenges they faced during their times.
Eric Schmidt- Executive Chairman at Alphabet and former CEO of Google, calls this book “Kaleidoscopic, ambitious, and brilliant, drawing on a dazzling cast of characters to chart the rise of the five industries that have come to define technology today and, collectively, to remake the world.”
In short, Troublemakers is a must-read for anyone hoping to understand how and why the tech revolution took place in the San Francisco Bay Area.
Don’t Stop There
As you can see, there is a lot to learn from the best in the industry. While we think these are the best venture capitalism books, our list certainly isn’t exhaustive. You should always be on the hunt for more material to improve yourself and your work.