In the crowded field of US venture capital, where arguably too much money is chasing the available quality investments and some firms bemoaning the industry's prospects , Sequoia Capital is on something of a run. Having reaped a reported $495m - or 43-fold return - on its investment in YouTube.
VC Ratings points to a new feature on the company's website - a list of 10 characteristics that Sequoia, which backed both Yahoo! and Google, looks for in companies and advice on submitting a business plan.
- Clarity of Purpose
Summarize the company's business on the back of a business card. - Large Markets
Address existing markets poised for rapid growth or change. A market on the path to a $1B potential allows for error and time for real margins to develop. - Rich Customers
Target customers who will move fast and pay a premium for a unique offering. - Focus
Customers will only buy a simple product with a singular value proposition. - Pain Killers
Pick the one thing that is of burning importance to the customer then delight them with a compelling solution. - Think Differently
Constantly challenge conventional wisdom. Take the contrarian route. Create novel solutions. Outwit the competition. - Team DNA
A company’s DNA is set in the first 90 days. All team members are the smartest or most clever in their domain. "A" level founders attract an "A" level team. - Agility
Stealth and speed will usually help beat-out large companies. - Frugality
Focus spending on what's critical. Spend only on the priorities and maximize profitability. - Inferno
Start with only a little money. It forces discipline and focus. A huge market with customers yearning for a product developed by great engineers requires very little firepower.
Whatever the product is, who could resist? And under the mysterious heading of "Inferno" - it concludes, "start with only a little money. It forces discipline and focus. A huge market with customers yearning for a product developed by great engineers requires very little firepower." How refreshing.
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