How VCs make decisions

VC Decision Making Methodology

VC Criteria

1. Keep teams small (8-10 or less.)

2. Create 3/3 red-team & black-team to argue for/against.

3. Read materials first.

4. Collect data from each member asynchronously.

5. Let junior people speak first.

6. Ask the expert LAST.

Say “no” 100x (!)

Why would we NOT proceed with this investment opportunity?

Corporate VCs (CVCs)

Corporations should:

1. Set the budget.

2. Set the criteria (what profile to invest/what profile to not invest.)

3. Set the number of investments/year.

Corporations should NOT:

1. Evaluate or control the type of investment.

2. Make individual investment decisions.

3. Spend a lot of time making decisions.

Source: Prof. Ilya Strebulaev, Stanford GSB

“The Venture Mindset: How to Make Smarter Bets and Achieve Extraordinary Growth” and the HBR article "Make Decisions with a VC Mindset."