The Power Law (Part Two)

“When in doubt, take the shot.”

Doug Leone, Managing Partner, Sequoia Capital

The partners from prestigious venture firm Accel stood outside an office in Palo Alto, waiting to take theirs.

These were the offices of a young startup called thefacebook.

Most startups would’ve killed to meet them. But thefacebook’s young founder gave the Accel partners the cold shoulder.

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This didn’t stop them. They lurked outside and buttonholed any thefacebook employee they could find.

Eventually, they got the meeting with founder Mark Zuckerberg. And they won the deal, a $10 million check into the company’s Series A round.

To this day, it remains one of the greatest investments in the history of venture capital.

As an angel investor, I always assumed that the prestigious firms like Accel or Sequoia had it easy. The best founders must be falling all over themselves to meet them!

Nothing could be further from the truth. As Sebastian Mallaby chronicles in his superb new book The Power Law: Venture Capital and the Making of the New Future, the greatest firms are also the scrappiest.

Sequoia Capital, perhaps the greatest VC firm in history, wrote their own code to find the most downloaded new iOS apps. One day, it flagged a small program called WhatsApp.

Sequoia partner Jim Goetz sent e-mail after e-mail to WhatsApp’s founder. For months, he never heard a word.

Finally, Goetz was able to get a meeting with WhatsApp’s founder, Jan Koum. In time, Sequoia won the deal.

The investment made Sequoia $3 billion, and WhatsApp is now ubiquitous throughout the world.

So what does this mean for small fries like me?

Even the greatest have to vigorously pursue deals and handle rejection, so don’t give up on an awesome company! If Sequoia isn’t too cool to cold-message a founder on LinkedIn (psst: they’re not), neither am I!

And when I find that rare, incredible startup, I’ll be repeating Leone’s words to myself: “take the shot.”

More on tech:

The Power Law (Part One)

Managing a Crisis the Sequoia Way

Talking Startups and Today’s Fundraising Pullback

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Photo: Doug Leone, Managing Partner, Sequoia Capital. “_SJP1148” by TechCrunch is licensed under CC BY 2.0.


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