How To Identify Undervalued Skill Sets In Early Stage Companies According To VC Sarah Guo | Forbes

Detailed Summary

Introduction (0:00 - 0:16)

• Diane Brady introduces Sarah Guo, former general partner at Greylock and now founding partner at Conviction.
• Sarah Guo expresses excitement about starting her own fund.

Why Start A Venture Fund? (0:16 - 0:47)

• Guo was inspired by Greylock's entrepreneurial culture and her parents, who are entrepreneurs.
• She sees the current macro environment, despite its challenges, as a huge opportunity due to significant transition.
• Her investment thesis is fundamentally early-stage, focusing on founders committed to taking risks in this climate.

Investment Thesis and Opportunities (0:47 - 1:52)

• Guo believes the next decade will see a shift from mobile and cloud benefits to new enabling technologies like AI and crypto.
• She plans to invest significantly in these areas, seeking out great entrepreneurs.
• A key interest is the "future of work," including enabling remote teams, digital work, and building remote relationships.
• She highlights past investments in companies like Mystery, Remotion, and Figma in this space.

Identifying Investment Opportunities (1:52 - 3:35)

• Guo describes her investment approach as "founder-first," with strong opinions on secular changes.
• She emphasizes looking for core entrepreneurial characteristics and a deep understanding of problems, rather than just pedigree or prior executive roles.
• She values meeting people in person to identify potential greatness in founders.

Ensuring VC Diversity (3:36 - 4:47)

• Guo is privileged to work with many female and Hispanic founders, and other underrepresented groups.
• She notes Greylock's efforts to foster diverse talent, recognizing that diverse investors are essential for connecting with and investing in diverse entrepreneurs.
• She follows in the footsteps of industry leaders like Eileen Lee and the All-Raise team in promoting diversity.

Impact of Economic Climate on Founders (4:47 - 6:17)

• Guo believes the current economic shift changes the selection set of who creates companies.
• In a period of cheap capital, the risk of starting a company was low, allowing engineers to easily return to large tech companies if their startup failed.
• Now, starting a company requires a more considered decision, which acts as a positive signal for investors, as only truly committed entrepreneurs will take the leap.

Thinking About Crypto (6:18 - 8:16)

• Guo's interest in crypto is primarily at the infrastructure level, citing companies like Zerox and Magic Eden.
• She acknowledges the current "crypto winter" will be severe but views it as a positive "cleaning out" of speculative interest, fraud, and uneducated investment.
• This cleansing will allow focus on core principles like data ownership, internet platform ownership, and programmatic cross-border finance, which she finds very interesting for long-term investors.

Illuminating Under-appreciated Skill Sets In Early Stage Founders (8:17 - 10:10)

• Guo highlights the growth curve of entrepreneurs who create platform companies, using Dylan Field of Figma as an example.
• Dylan, a college dropout, demonstrated an extraordinary "constant searching for input" and an "unapologetic desire for the company to be great."
• She looks for entrepreneurs with a high work ethic, ambition, and who set a high bar for their team's performance, requiring investors only to provide resources.

Lessons From Greylock (10:11 - 12:18)

• Guo learned from extraordinary investors at Greylock, noting their diverse approaches to venture capital.
• She mentions Ashim Chandna's deep domain knowledge in enterprise infrastructure and security, and Reid Hoffman and David Sze's focus on network effects, creative ideas, and iteration speed for consumer products.
• She emphasizes that being consistently good in venture is challenging and achieved in many different ways.
• Key investor characteristics she seeks include intelligence, strong work ethic (hustle), empathy for entrepreneurs, and intellectual curiosity combined with commercial judgment.

Value Of Conviction (12:19 - 13:05)

• The name "Conviction" reflects her mission to provide conviction to entrepreneurs, especially for those writing first checks.
• She values loyalty to individuals and the stories behind great ideas, recognizing that success isn't always immediately obvious.
• In the current bear market, providing conviction to entrepreneurs will be an uncommon and valuable contribution.

Notable Quotes

"I have always wanted to start my own fund. My parents are entrepreneurs and this time in cycle, even though I think it's very easy to look at the macro and say, you know, it's a scary time, it's a risky time, how much capital is available to funds or startups, we're at a huge time of transition, so I think it's actually a huge opportunity." — Sarah Guo

"I think the cleaning out of the ecosystem of a lot of that speculative interest is very good for the ecosystem because I think the principles of more ownership of your data, of more ownership of internet platforms, of uh potentially um you know programmatic finance that uh is cross-border like all of those are actually very interesting ideas." — Sarah Guo

"The thing that I seen in Dylan that has just been extraordinary that I look for in other entrepreneurs is the sort of constant like searching for input on everything that he has to go learn." — Sarah Guo

"A very humbling thing about venture is um it's very hard to be good consistently and people do it in very different ways." — Sarah Guo

"I think part of um what I endeavor to give to entrepreneurs is conviction around them and around ideas." — Sarah Guo