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For Fund Managers

5 Best Books To Read If You’re Forging a Path in VC

Building a solid brand, fund, or investment firm  — like any other business— is equal parts exciting and intimidating.

Regardless of how you’re feeling, there’s good news: nobody starts with a perfect understanding of how their business will grow.

And while practical experience is best, we’ve curated a list of 5 books every emerging fund manager should read.

Consider these titles part of your fund manager onboarding.

The first one you’ve probably heard of …

Thinking, Fast And Slow by Daniel Kahneman

Fund managers need to think clearly and make good decisions.

Learning this is a skill that takes time but understanding how the mind works is a good foundation on which to build.

This book provides that foundation.

Published in 2011, Thinking, Fast and Slow is considered one of the best books on behavioral economics and thinking. It provides a detailed explanation of how the human mind makes decisions.

The book compares two systems:

  1. the intuitive fast system
  2. the rational and slow system

Kahneman shows both systems' incredible powers, how they impact our judgment, and how we can use them both in life and in our work.

The author breaks down behavioral economics principles to display how we make mistakes in situations where the stakes are high.

Things like estimating risk and overcoming cognitive biases can be much easier to navigate once you know how these two systems work with — and against — each other.

About the author: Daniel Kahneman is an Israeli-American psychologist who won the National Academies Communication Award for best creative work that promotes public knowledge of behavioral science, engineering, and medicine.

In 2002, he was also awarded the Nobel Prize in Behavioral Economics.

Follow Daniel on Twitter.

Principles: Life and Work by Ray Dalio

Ray Dalio is a legend in the investing world.

A bit of an oxymoron, Dalio calls himself a global macro investor but runs a hedge fund — two things you don’t usually see in the world of high finance.

He’s regarded as one of the best thinkers and decision makers in the world.

Published in 2017, Ray Dalio's book Principles: Life & Work lays out the principles he used to run Bridgewater Associates, the largest hedge fund in the world with assets north of $150 billion.

The book has a simple premise: by following a set of principles you can develop a successful business by protecting you against wrong decision-making.

These principles are divided into three sections:

  1. general principles
  2. fundamental life principles applicable to everything
  3. management principles as they are used at Bridgewater

These principles are not only simple to follow and remember but are highly effective at helping young companies grow.

About the author: Ray Dalio is an American investor and is one of the most successful hedge fund managers of all time. With a net worth of over $20 billion, he is also one of the richest men in the world.

Follow Ray Dalio on Twitter and LinkedIn.

Secrets of Sand Hill Road: Venture Capital And How To Get It by Scott Kupor

Some consider Secrets the venture capital bible.

And for good reason: it’s useful for founders and VCs alike.

So what about that name?

Sand Hill Road is where some of the industry's largest names may be found. By laying out the secrets of Sand Hill Road, the author instructs the reader on how VCs think and invest in startups.

In addition, the book explains how entrepreneurs may secure the best deal and make the most of their connections with venture capitalists. It even gets into the weeds, showing founders how to develop a conceptual framework about deal terms.

This is a guide that every entrepreneur — including emerging fund managers —or anyone starting their career in VC needs to read to turn their ideas into the next successful business.

Kupor draws on his personal experiences to offer advice and practical takeaways on:

  • the fundamentals of fundraising
  • the skills required to secure venture capital
  • the need to establish connections with potential acquirers even before securing a deal

About the author: Scott Kupor is a Managing Partner at Andreessen Horowitz and is best known for his books on the venture capital industry.

Follow Scott Kupor on Twitter and LinkedIn.

Angel Investing: The Gust Guide To Making Money And Having Fun Investing In Startups by David S. Rose

Angel Investing is a quick read packed with real-life examples and an in-depth understanding of the subject.

The book gives readers an inside look at:

  • what angel investors are
  • how they work
  • how they can build a portfolio that can earn a 25% annual return

The book was one of the first comprehensive guides to angel investing, covering topics such as what it is, how to get started, and practical examples.

Rose outlines:

  • how angels and venture capitalists vary
  • how businesses can gain access to them
  • other important tools for investors entering the field of startup finance,

Most of the content is based on his personal experiences and those of other angel investors, including Reid Hoffman — the co-founder of LinkedIn and a successful angel himself.

The book includes tools, methods, and tactics you need to invest successfully into early-stage companies. Even the tough things like:

  • how to analyze opportunities
  • how to negotiate terms
  • how to interact with other VCs

About the author: David S. Rose is known as a serial entrepreneur, angel investor, and Inc. 500 CEO who has established or funded over 90 groundbreaking businesses.

He is described as "New York's Archangel" by Forbes, “Global Conquering Entrepreneur” by BusinessWeek, "the father of angel investment in New York" by Crain's New York Business, and "patriarch of Silicon Alley" by Red Herring magazine.

He is the founder and CEO of Gust, an international startup funding collaboration platform that has been named the world's most innovative financial technology firm.

David is also the:

  • Managing Partner of Rose Tech Ventures
  • Founder and Chairman Emeritus of New York Angels
  • Associate Founder and Founding Track Chair for Finance, Entrepreneurship Economics at Singularity University
  • Google/NASA-sponsored post-graduate program in exponential technologies

Follow David on Twitter and LinkedIn or read his work on his personal site.

Starting Your Own Venture Investment Fund: A How-To Guide by Kevin J. Moore

This book is a quick read but worth every second.

It’s simply about starting and managing your own venture investment fund. Like any other business, raising your first fund is a lengthy and difficult process full of challenges that could lead to failure

By focusing on distinct aspects of the fundraising process, this step-by-step guide provides clarity and insight into the complex process of fundraising.

About the author: Kevin J. Moore is a partner of Spur Capital Partners, a venture capital fund of funds that invests in technology and other healthcare-related venture capital funds.

In his book, he walks readers through the process of setting up and operating a venture capital firm by drawing on his own experiences working in the industry.

Follow Kevin J. Moore on Twitter or read his blog.

Get started then get going

Any fund manager on Allocations will tell you: raising your first fund is a challenging but rewarding experience.

We’ve seen some of the “war stories” play out in real-time.

But don’t let that challenge stop you. The best fund managers fight through the tough first stages and reap the rewards later — for themselves and their LPs.

At Allocations, we’re here to help you on your journey. That’s why we’ve built a full suite of products and services to support fund managers and angel groups.

A rising trend among new angel investors is to spin up an SPV first, testing the market and their ability with a single deal.

Whatever help you need, we’re here to help.

Get in touch with our team today and we’ll help you get started. Then, we’ll help you get going, on to your second fund and beyond.

Disclaimer: The information provided in this document does not, and is not intended to, constitute legal, tax, investment, or accounting advice; instead, all information, content, and materials available are for general informational or educational purposes only and it represents the personal view of the author. Please consult with your own legal, accounting or tax professionals.