Book review Entrepreneurship Recommended Read

Book Review | Secrets of Sand Hill Road: Venture Capital and How to Get it

A fascinating deep-dive into how the Venture Capital business works.
Publisher: Virgin Books (Paperback)
Originally Published: 2019
Pages: 320
Author: Scott Kupor

Rating: 3.5 out of 4.

Scott Kupor’s Secrets of Sand Hill Road treads the less-beaten path. It’s one of the few books ever written about the Venture Capital business and how it works. Kupor’s book scores over its competition by delving deep into the subject and uncovering several less-explored parts.

Kupor brings his A-game to his debut book. His wealth of experience working with Andreessen Horowitz – a Silicon Valley-based venture capital firm and before that with leading a startup and taking it public gives him a great vantage point to cover both sides.

Scott Kupor is an Investing Partner at Andreessen Horowitz and has been with the firm since its inception in 2009. He also teaches at Stanford Law School and Haas Business School.

Twitter: @skupor

If you are someone aspiring to launch their startup or someone looking to deepen their knowledge about entrepreneurship, then you should read this book ASAP. It will arm you with enough knowledge to tackle funding negotiations with the VCs as well as manage internal conflicts with the board should they arise.

This book also illuminates you about certain term-sheet-related pitfalls and how to circumnavigate them. If ignored, these snags can have disastrous consequences down the road for you as a founder.

After reading this book, you, as a more enlightened reader, would know:

  • What are Limited Partners (LPs) and how do they interact with venture capital firms they fund?
  • What are General Partners (GPs) at venture firms and how do they interact with startups they fund?
  • Interplay between founders and VCs and the resulting scenarios.
  • What is a term-sheet and what are its various constituents?

The following quote from the author captures the crux of the book:

“I want to give you, a founder, some insider information, secrets and advice so that you can best navigate your way through your interactions with VC firms, from the initial pitch all the way through to an IPO or acquisition.”

Scott Kupor, Secrets of Sand Hill Road

Scott Kupor’s writing does come across as bordering on the text-bookish in some parts, but I won’t hold it against him. The fact that he manages to decrypt the most technical of the VC speak should be commended and not criticized.

There is solid merit and depth to the Secrets of Sand Hill Road. Even if you are uninitiated in the VC arena, reading Scott Kupor’s book will make you well-versed with it. The detailed yet lucid explanations don’t let the reader off the hook. Kupor constantly throws something interesting and insightful at the reader to keep him riveted.


Secrets of Sand Hill Road

Secrets of Sand Hill Road teems with invaluable bits of information. Below I am listing down some of my own key takeaways (mind you, this is not an exhaustive list. These points piqued my interest and I hope they do yours, too).

#1. Three Key Heuristics.

While VCs use all kinds of heuristics to evaluate a startup, broadly, they fall into three categories: People, Product, and Markets. Can the founding members work in concert with one another? Does the product solve a major problem and make a tremendous impact on society? What is the Total Addressable Market (TAM) for the startup? Everything starts and ends with the market size.

#2. Potential to Scale

While a small percentage of VC firms manage to rake in massive returns (>10-100X), most investments result in mediocre returns or worse, abysmal failures. As a potential seeker of VC money, you should know that unless a VC sees the potential to earn a handsome return on his investment, he won’t sign the cheque.

#3. VC Fund Lifecycle

Scott Kupor notes that most VC funds invest with a horizon of 10 years. It can help your cause if you figure out where exactly in the life cycle of a particular fund you are coming in. If you get an investment from the fund in its early days, the VC will be under a lot less pressure to return capital to its Limited Partners (LPs). If you are getting funded in the later part of that fund’s lifecycle, then the pressure for a near-term exit for the VCs will be immense. As a founder, that means that you will be under the pump right away.

#4. Stock Vesting

One of the most interesting and reappearing topics in the book is that of stock vesting. Kupor spends considerable time explaining its various facets. The basic idea behind stock vesting is to tie down founders and early employees (often the Kitchen cabinet) with the prospect of increasing equity. This way they stay with the startup and contribute to its growth.

However, vesting schedules (typically four years) can also give rise to several problems. One of many scenarios discussed in the book is that of a co-founder leaving the company before the four-year period. This leads to a dead equity problem for the remaining founders.

Secrets of Sand Hill Road

#5. How much money to raise in the first round?

If you are going to raise money for the first time, this question can befuddle you. Kupor suggests that you should raise as much money as possible so that when you walk in for the next round of financing, the new investor could see that you have sufficiently de-risked the business already and made adequate progress, too.

“Your B round investor will pay you for your success in the form of higher valuation. You will also have to sell less of the company per dollar of capital you raise.”

Scott Kupor, Secrets of Sand Hill Road

#6. Display strong beliefs, weakly held

When pitching your product to the VCs, you should demonstrate that you have strong beliefs, weakly held. What that means is you should come across as someone who is nimble-footed and not overly invested in their initial product. Since things often don’t work out as planned in the startup business, VCs want founders who are ready to pivot when things take a left turn.

Though I don’t generally do this, if I have to recommend a specific portion from the book, it would be the two chapters titled The Alphabet Soup of Term Sheets – Part I and Part II. Together they form the meatiest part of the book. You would learn everything about financing, governance, and conflicts in those two chapters.

There are chapters wherein he uses real-life case studies to put across his point.


From stem to stern, Secrets of Sand Hill Road is loaded with facts and information. The only thing that could work against the book is its technical subject matter.

It’s not a breezy book that you can finish over the weekend. I mean, you can, if the subject matter is up to your alley. If not, then comprehending some parts, especially, those related to raising finance and signing term sheets can pose a challenge. That said, Kupor deciphers a lot of technical mumbo-jumbo and makes the content both engaging and edible for the reader. However, the book, still, may not appeal to a wide audience.

On a different note, the fact that it’s one of the few books available on the subject of Venture Capital, seeing it get recommended as reference material in universities shouldn’t surprise anyone. Especially in institutions where they teach entrepreneurship courses such as venture financing and venture commercialization, it could fit in nicely. All in all, a highly recommendable read.

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