How did Silicon Valley's top VC Greylock Discover the next Facebook?

Greylock is one of Silicon Valley's top VCs, having previously invested in a series of famous companies such as Facebook, LinkedIn, Instagram, Pandora, Dropbox, Airbnb, Greylock's partners, including David Sze, Aneel Bhusri, Reid Hoffman, and so on, have thousands of business plans sent to Greylock each year, with only 20 to pitch to all partners, half of which can be invested.

So how did Greylock find one of the star startups, and the story from Newsweek might inspire us.

When the VC starts arguing about your model, it means you might have a chance.

Start-up company Sprig CEO Gagan Biyani came to Greylock headquarters, he wanted all Greylock Partners pitch his project, several partners also raised questions, Biyani for this pitch has been prepared for several months, he can Ching.

After pitch, Biyani realizes that if the partnership starts talking about your project, you're probably doing well. They are interested in your project and want to know more details.

Sprig want to do the catering industry Uber, so that anyone can be anywhere in the mobile phone point to sell. This is in an unconfirmed market to open up a new business model, early logistics and distribution investment is huge, may be a few years of time are not profitable, project risk is very high.

Pitch two partners on the project had a heated debate, Biyani felt very disturbed, watching two Silicon Valley big guy talking about his fledgling company. Eventually, Sprig received 10 million dollars in investment from Greylock.

Greylock Investment brings not only capital

Nextdoor is a private neighborhood social application that won Greylock investment two years ago. Nirav Tolia, founder of Nextdoor, said that after gaining Greylock investment, "as if by the pope's blessing," Nextdoor received other VC flood-like offer.

Many VC don't even know what Nextdoor is doing, but heard that David Sze in the board of directors, he did not hesitate to decide to invest.

Glenn Kelman, the CEO of Redfin, a real-estate start-up company, asked who he wanted to join the board after a greylock investment, and eventually his preferred CarMax founder Austin Ligon joined. Kelman said: "I feel that if I elect Obama he can come." "Greylock not only good at choosing companies, but also good at building companies.

A genius or a madman?

Facebook, LinkedIn, Instagram, Pandora, and Tumblr, the star companies, were once considered crazy ideas. But from these seemingly exotic patterns, Greylock saw the opportunity.

For example Airbnb, in 2009 when Greylock investment, this model looks very strange, everyone thinks, who will be on the internet to rent their home to strangers live. But last year, 6 million people around the world used Airbnb services, while Airbnb, which had not yet been listed, valued $10 billion in January.

Reid Hoffman said that when a person puts forward the idea is big and radical, he is not a genius is a madman, we have to do is to identify both.

Respect for dissent

Most voting systems are consensus-oriented and require the unanimous consent of the team. But Greylock is different. A few years ago, several partners studied their past pitch and found that the projects that were unanimously and unanimously opposed were not very good at all, but were controversial companies such as Facebook, Pandora, and Airbnb, which became the most profitable investment.

Airbnb this project, the original Sze is very opposed, and Hoffman but force it, fortunately Hoffman not so easy to compromise. Sze explains: "We are looking for more extreme situations, so we try to widen the conflict." ”

Investing in LinkedIn and Facebook's history

Greylock's partners have created early employees of companies or start-ups, and they have a clear understanding of the development of technology companies.

But Greylock is not always the case, it was a very famous venture capital company on the east coast of the United States, participated in some important investment in the 890 's, but it has no right to say on the West coast. So Greylock hired Sze to change the situation. Sze, a graduate of Yale University and Stanford Business School, created search engine excite before Google was born.

2004 Reid Hoffman left PayPal, founded LinkedIn, he was looking for investment when he did not take Greylock Heart, but later Hoffman and Sze talk to find that he had previously seen the VCs completely different, Sze is very interested in the LinkedIn mechanism, and he proposes what kind of employees the company should recruit, how to attract users, and even what the site should look like. Hoffman thinks it's more like talking to entrepreneurs than investors. After the listing of LinkedIn, Hoffman also joined the Greylock, and recently published documents in Greylock pitch in 2004 to help entrepreneurs.

Facebook then turned out to be a greylock pitch in 2005, but eventually it fell apart because Sze was busy with another investment, at a time when Facebook valued 100 million dollars. A year later, Facebook's valuations jumped to $550 million trillion, and Zuckerberg began looking for a new round of funding, Sze decided to sell.

In fact, there are few controversial projects like Facebook in Greylock history. Facebook's business model is still unproven and there are plenty of rivals in the social arena, and there are still too many unknowns about whether Facebook will succeed. But Sze the future of Facebook to other partners, detailing how social networking will evolve in the future, how to get out of campus and be the way for everyone to communicate.

Eventually, the partner agreed to open a cheque for the company's largest amount-10 million dollars. At the end of May this year, Facebook's valuations have reached $160 billion trillion.

The intense competition of VC in Silicon Valley

Today, Silicon Valley's VC competition is extremely fierce, greylock investment in almost every project can see its main competitors (Sequoia, Accel, Benchmark, Andreesen Horowitz) figure. Thanks to the high valuations of Facebook and Twitter, investors have poured money into Silicon Valley, with huge sums of money invested in the gale, and plenty of money for startups, such as the Sprig, which has received 3 offers in addition to Greylock. So for a good entrepreneur, it's not the VCs who choose the entrepreneur, but the entrepreneur who chooses the investor.

We all need to dig a corner.

The uncertainty of startups is very large and there may be a variety of unexpected situations. Start-up companies need to develop quickly after getting financing, VC needs to do is not just investment, the funds in place, the development of the company this difficult work began.

Greylock's partners have been entrepreneurs who know how to turn fragmented ideas into real business, and their experience as experienced will be a great support to startups, and Greylock will help when the company is in trouble.

Greylock help is particularly important in recruiting this issue. The talent competition in Silicon Valley is fierce, and small startups may not be able to recruit the best people because they cannot afford to pay high wages like big companies. To help startups recruit the best talent, Greylock has set up a recruiting team and hired Jeff Markowitz and Dan Portillo's two Silicon Valley headhunters to help entrepreneurs find talent from big companies with their networks and resources.

Help entrepreneurs out of the incubator

After investing in Sprig, Greylock's partners helped determine how 10 million dollars would be used, and contacted the Realtor to help them move out of the incubator and find new office locations. Whether sprig can be the next big win is a billions of dollar issue for Greylock.

Sze says that everyone can say why something fails, but what really matters is whether you can convince others why something will succeed.

[This article compiles from: Newsweek.com]