Book Review: Mastering the VC Game

I purchased Mastering the VC Game after Fred Wilson blogged about it at avc.com. I thought the book was entertaining and well-written. Having followed vc blogs for quite some time now, I can’t say that there was a lot of new information in the book, but  I did think that it brought clarity to some issues that I didn’t completely understand.

For example, in valuation there is a common misconception that the higher the valuation, the better the deal is for the management team. The problem is that entrepreneurs often forget to factor in the size of the option pool set aside for future employees. To account for this, Bussgang introduces a metric called the ‘promote’, which is the (founding team’s ownership percentage)*(post money valuation). Even though the book’s explanation is nearly identical to the explanation on Bussgang’s blog a year ago, it made so much more sense this time.

The reason for this newfound clarity is that the book introduces topics in a natural way. Bloggers often have trouble doing this and can seem random and haphazard. So when the ‘promote’ is explained in the context of an entire chapter about valuation, suddenly it makes sense.

Another reason I was able to appreciate the nuances in the book is that I’ve been following vc/entrepreneurship blogs obsessively for two years now. What I most appreciate is that the book was able to touch upon so many pieces of information that I had to internalize bit-by-bit over two years. In just a few hours, you can get a broad overview of vc, dive into interesting stories, and get surprisingly detailed information that isn’t widely available except in blog posts.

This immediately reminded me of Rework by the guys at 37signals. I was really disappointed by that book and thought it was a waste of time. It was incredibly repetitive and at some points I felt like I was re-reading a combination of the 37signals blog and Getting Real. Bussgang’s book is still derived from blog posts, but rather than being a rehash, it brings clarity to a scattered body of knowledge. If you’re interested at all in vc/entrepreneurship, and especially if you’re new to blogging, I highly recommend the book.