reading + listening list.

Last updated on Jul 7, 2025

💡 MUST READ: The Minto Pyramid Principle: Logic in Writing, Thinking, & Problem Solving

VC Specific

Books

Articles

Picking Winners

Default Alive or Default Dead?

Year of post: 2015

Name of investor: Paul Graham

High-level theme: The importance of startups understanding their financial trajectory.

Summary: Paul Graham emphasizes the critical importance for startups to know whether they are "default alive" (able to reach profitability with current resources) or "default dead" (unable to reach profitability without additional funding). He argues that many founders don't ask this question early or often enough, leading to potential fatal situations. Graham warns against overhiring as a major cause of startup failure, particularly after raising funds.

Calculator

Key takeaway: He suggests that founders (or funders) should constantly evaluate their financial trajectory, have a backup plan if fundraising fails, and resist the urge to overhire. The post underscores the importance of addressing fundamental product issues and seeking sustainable growth paths rather than relying on increased staffing to solve problems.

Miners vs. picks and shovels: a contrarian venture capital investing approach?

Year of post: 2007

Name of investor: Satya Patel

High-level theme: Contrarian approach to venture capital investing.

Summary: He argues that investing in companies providing tools and technologies (the "picks and shovels") to support consumer-facing media properties is often a better strategy than trying to identify the next big consumer hit (the "miners"). Patel suggests that this approach offers a better risk/reward tradeoff, more predictable monetization, and aligns investor interests more closely with entrepreneurs.

“Searching for a single big win forces investors to take an aggressive approach to managing their portfolio of “bets”. Approaches to financing and exits can diverge dramatically when an investor is swinging for the fences at the potential expense of the entrepreneur. While the economic rewards of investing in picks and shovels may not be as great (although this can be argued), the satisfaction of building a sustainable business in partnership with entrepreneurs is well worth the cost associated with watching this current “gold rush” from the sidelines.”

Key takeaway: He argues that betting on companies that provide essential services to the entire industry is often more sustainable and predictable than trying to pick individual winners.

Investing is About Passion

Name of investor: David Hornik

Year of post: 2012

High-level theme: If the idea doesn’t get your mind turning, it's not worth your time.

Summary: David Hornik emphasizes that passion is a crucial element in both entrepreneurship and venture capital investing. He argues that great entrepreneurs and VCs are driven by a desire to change the world, not just make money. Hornik describes his decision-making process as being heavily influenced by the level of passion he feels for a startup's team, product, and mission. He uses a personal metric of how much a startup occupies his thoughts, especially when going to sleep, as an indicator of his passion for the investment opportunity.

“The best test of my enthusiasm for you and your company comes when I go to bed the evening you pitched me. I have learned that the companies about which I'm the most passionate take over my subconscious. I'm serious about that. They literally occupy my brain. When I lie down to go to sleep that evening, I won't think about my schedule tomorrow or my daughter's soccer game or the latest episode of _Girls_, I will be preoccupied with your company. It doesn't happen often. But when it does, it is really exciting.”

Key takeaway: He suggests that VCs should look beyond traditional metrics and consider their own emotional and intellectual engagement with a startup as a key factor in investment decisions. This approach emphasizes the importance of alignment between investor and entrepreneur in terms of vision and enthusiasm for the project, which can help sustain both parties through the challenges of building a successful company.

Building Capital-Efficient Businesses

The Wisdom of Jeff Bezos, Part 3

Name of investor: David Hornik

Year of post: 2012

High-level theme: Amazon's low-margin, high-volume business strategy

Summary: David Hornik analyzes Jeff Bezos' approach to building Amazon, focusing on the company's strategy of pursuing low margins and high volume. He explains how Bezos views low margins as a competitive advantage, requiring extreme efficiency throughout the company's operations. Hornik highlights Amazon's focus on driving down costs in areas like distribution and customer support, as well as the development of Amazon Web Services (AWS) as an extension of this efficiency-driven approach.

Key takeaway: Hornik argues that Bezos' commitment to a low-margin, high-volume strategy has been key to Amazon's success. This approach requires relentless focus on efficiency and cost reduction, allowing Amazon to offer lower prices and attract a larger customer base. While acknowledging that this strategy is challenging, Hornik credits Bezos for consistently executing on this vision from the company's inception. He also notes that while high-margin, high-volume businesses (like Apple or Google) can be even more profitable, Amazon's model has proven highly effective in building a dominant market position.

Capital Efficient Businesses

Year of post: 2023

Name of investor: Elad Gil

High-level theme: The importance and benefits of capital efficiency in startups

Summary: Elad Gil discusses the value of capital efficiency in startups, citing examples of major tech companies that began as highly capital-efficient businesses. He argues that capital efficiency often reflects strong product-market fit and frugal, cost-conscious management.

In general there tend to be two drivers of capital efficiency.

Customers will pay (a lot) for the product.** The “capital” side of capital efficiency is often a proxy for both product / market fit and an intense customer need. Customers are willing to pay up for a product that is important to them, and there is insufficient competition in the market to commoditize pricing or destroy the category (so the product is somehow differentiated). Pricing is often a proxy for value & differentiation of a product.
The company is run efficiently.** During COVID roughly all tech startups lost their way on spending. Capital was flowing freely and teams often rapidly and dramatically over hired, boosted expenses on things non-crucial for the business, and spent wastefully. The most capital efficient businesses tend to be frugal and have a low cost approach to the world. Salaries are lower to help make equity more valuable. The founders and employees of these businesses treat the dollar spent by the business as their own money (which it is, as they are shareholders in the business). They realize that profitability gives them infinite runway and enormous freedom on decision making and future path optionality.

Key takeaway: Gil advocates for a return to capital efficiency in the startup world, especially after a period of loose spending during the COVID-19 pandemic. He suggests that the most successful companies often start with a capital-efficient model, which demonstrates both customer demand and good management. However, he also cautions that excessive focus on profitability can sometimes hinder a company's ability to scale and dominate its market

Embrace the Discomfort

Name of investor: Kara Nortman

Year of post: 2016

High-level theme: The importance of founders embracing discomfort and learning all aspects of their business in the early stages

Summary: Kara Nortman argues that startup founders should resist the urge to immediately hire for their perceived weaknesses in the early stages of their company. Instead, she advises founders to embrace discomfort and try to be the "first and second employee" in every function or project. This approach helps founders:

Better understand all aspects of their business
Make more informed hiring decisions later
Build empathy for different roles within the company
Improve prioritization skills
Foster a culture of learning and cross-functional appreciation

Key takeaway: Nortman encourages founders to roll up their sleeves and tackle unfamiliar tasks, even if they're outside their comfort zone or expertise. This hands-on approach can lead to better product-market fit, more effective leadership, and a stronger company culture. She emphasizes that the best entrepreneurs are lifelong learners who aren't limited by their past experiences and are willing to engage with all aspects of their business.

Why VC Funds Fail

Year of post: 2023

Revisiting The Death of a Venture Fund

Name of investor: Kyle Harrison

High-level theme: The changing landscape of venture capital and the increasing risk of fund shutdowns

Summary: Kyle Harrison discusses the surprising shutdown of OpenView Venture Partners and uses it as a springboard to analyze broader trends in the venture capital industry. He revisits his earlier analysis on how venture funds can die and notes that the current market conditions are leading to an increase in fund mortality. Harrison highlights changes in the VC landscape, including shifts in funding amounts, value creation, and allocation to private markets.

3 body problem deck
- Specifically the slides around non-consensus alpha VCs (aka TWV)

Key takeaway: Harrison argues that venture funds are now facing increased pressure to justify their existence. He suggests that successful funds will need to clearly articulate their value proposition and "product offering" to founders and limited partners. This could involve specializing in certain areas (like capital-intensive investments) or finding other ways to stand out in a more competitive and challenging environment. The era of easy money is over, and venture funds must adapt or risk shutting down.

Year of post: 2024

Why One Venture Capitalist Decided to Call it Quits

Name of investor: Jai Malik

High-level theme: Challenges facing small, specialized venture capital funds in the current market

Summary: Jai Malik, founder of Countdown Capital, a small fund focused on industrial startups, announced the closure of his fund. He cited the difficulty of generating necessary returns due to competition from larger, multistage funds that are increasingly active in early-stage deals. Malik argued that the microfund model (funds under $50 million) is becoming unviable, especially in sectors like industrial tech where there have been few big winners.

Key takeaway: Malik's decision to shut down his fund highlights the growing challenges for small, specialized VC firms. The article suggests that the VC industry is transforming, with larger funds increasingly dominating across all stages of investment. This trend is making it harder for smaller funds to compete, both in terms of deal access and the ability to provide comprehensive support to startups. The situation raises questions about the future viability of the microfund model in venture capital.

Articles

Picking Winners

Building Capital-Efficient Businesses

Why VC Funds Fail

Other Interesting Reads