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Sorting Through Modern VC Advice: Separating Wisdom from Theory

In the ever-evolving landscape of venture capital, the criteria for being a VC have undergone significant changes. Not so long ago, having hands-on experience in building a company was considered a prerequisite for venture capitalists. This requirement ensured that VCs brought not just capital but also invaluable first-hand knowledge and experience to the table.

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However, the recent surge in the number of funds has led to a shift in this paradigm. Today, many VCs come from diverse backgrounds, some without direct company-building experience.

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This change brings with it a new challenge: deciphering the quality of advice. With a broader pool of VCs, the advice entrepreneurs receive is often a mix of read theories, market trends, and second-hand experiences rather than personal anecdotes.

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This isn’t to say that such advice lacks value, but it requires a more discerning approach from founders.

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Navigating Modern VC Advice
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Age of VCs
Source: Deloitte, VC Human Capital Survey, April 2023

Key Points for Founders:

  • Evaluate the Source:

    Understand the background of the VC giving advice. If their expertise aligns with your industry or stage of growth, their insights might be more applicable.

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  • Seek Diverse Opinions:

    Relying on a single source for advice can be limiting. Engage with multiple VCs and industry experts to gain a well-rounded perspective.

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  • Context is Crucial:

    Advice that worked for one startup may not work for another. Consider your unique situationβ€”market conditions, business model, and team dynamicsβ€”when applying advice.

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  • Trust Your Instincts:

    Ultimately, you know your business best. Use VC advice as a guideline, but trust your own experience and instincts when making decisions.

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  • Look for Evidence-Based Advice:

    Favor VCs who base their recommendations on data and proven strategies over those who offer generic or speculative guidance.

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For further insights on the shifting dynamics in the venture capital world and other 2023 takeaways, explore our comprehensive listicle at Venture Capital Takeaways 2023.

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