Bill Gurley’s thoughts on entrepreneurship and venture capital

Bill Gurley from Benchmark Capital has led investments in Uber, Zillow, and OpenTable.

In a 2013 interview with Pando founder Sarah Lacy, Bill shares his views on a wide range of topics pertaining to entrepreneurship and venture capital. These include Bill’s following beliefs:

  1. The VC business is an artisan business that doesn’t scale easily. As a result, Benchmark refrains from offering platform services to its startups.
  2. Every time a VC opens their mouth, they’re marketing to entrepreneurs. What VC’s say in public should therefore be taken with a grain of salt.
  3. Missed opportunities hurt VC’s a lot more than bad investments. This is because when a VC makes a bad investment their loss is capped at 1X, but when they pass on a great investment they lose the potential for a much higher multiple return.
  4. Many founders are better off not taking venture capital and instead shooting for sub-$75M outcomes where they retain a large fraction of the company, as these are more attractive corporate acquisition targets.
  5. Founders can mistake factors that have nothing to do with success (like getting an uncapped convertible note and having a pet friendly office), as well as factors which emerge as a result of achieving success (like having nice offices and giving Mac’s to each employee), for the causes of success.

You can watch the full interview below.