VC Titans of the Past: Lessons from Legendary Investors Who Shaped the Industry

enture capital (VC) has long been the lifeblood for many startups, providing not just the financial backing but also the strategic guidance necessary for startups to grow and disrupt industries. The landscape of VC has been significantly shaped by a handful of legendary investors whose foresight and innovative approaches to investing have left a mark on the industry.

Below, we take a look at the lessons learned from legendary individual and institutional investors that shaped the industry.

Lessons From Individual Investors Who Shaped VC

1. Arthur Rock

Every historical deep dive into VC starts with Arthur Rock, often credited as one of the fathers of venture capital. He played a pivotal role in the early days of Silicon Valley, and his investments in companies like Intel and Apple were based on a deep belief in the potential of technology and the visionaries behind these companies.

After earning an MBA from Harvard Business School, he moved from New York to California in the late 1950s, a period when Silicon Valley was transitioning into becoming a hub for technological innovation.

Rock's investment philosophy was unique for its time. He focused on the quality and potential of the entrepreneur, rather than just the product or business plan. The importance of visionary leadership and innovation are principles that continue to guide venture capital investment today.

Lesson: Look beyond the numbers.

A great team with a strong vision can create groundbreaking companies, and it’s important to invest in people and their visions, not just their current financials or products.

2. Georges Doriot

Georges Doriot's journey into venture capital began after his academic and military career. He graduated from Harvard Business School (HBS) and later joined its faculty, eventually founding the INSEAD business school in France. Throughout his academic career, he was committed to fostering leadership and innovation among his students.

It was his founding of American Research and Development Corporation (ARDC) in 1946 that cemented his place in venture capital history. Doriot introduced the concept of leveraging institutional and public investors' capital to fund nascent technologies and businesses.

This was an unconventional approach compared to the traditional, more conservative investment models of the time, which relied heavily on private wealth from affluent families. Doriot's vision of funding high-risk, high-reward ventures laid the groundwork for the venture capital ecosystem we see today.

Lesson: Embracing risk is essential for breakthrough innovation.

His conviction that the American economy needed to experiment with unknown ventures to progress is the perfect example of the importance of supporting businesses that many could be skeptical about but that have the potential to revolutionize industries.

3. Don Valentine

Don Valentine, the founder of Sequoia Capital, was known for his ability to spot potential in early stages of companies, investing in companies that would later become giants such as Cisco, Oracle, and Apple. Valentine's philosophy was to invest in areas that were "inflection points" in technology.

His background in sales and marketing, including his time at Fairchild Semiconductor and National Semiconductor, played a big role in his success.

Lesson: Focus on market transitions and inflection points.

Valentine's success was due to understanding broader industry trends and positioning investments to capitalize on these shifts before they become obvious to everyone.

4. Tom Perkins and Eugene Kleiner

The founding of Kleiner Perkins Caufield & Byers (KPCB) by Tom Perkins and Eugene Kleiner was a significant moment in VC history. They were among the first to offer not just capital but also operational support to their investments, a model that has become a standard in the industry.

Eugene Kleiner was an Austrian-born American engineer and one of the "traitorous eight" who left Shockley Semiconductor Laboratory to co-found Fairchild Semiconductor, laying the groundwork for Silicon Valley's semiconductor industry. Tom Perkins, an engineer and business executive, brought a wealth of experience from Hewlett-Packard and had a knack for identifying and nurturing high-tech startups.

Perkins and Kleiner fostered a culture of entrepreneurship within their firm, encouraging their partners to think like the founders of the companies they invested in. This approach helped build strong, collaborative relationships between KPCB and its portfolio companies.

Lesson: Active involvement and operational support can significantly add to the value of investments.

5. John Doerr

John Doerr joined KPCB in 1980, after a stint at Intel, a period during which he was exposed to the rapid advancements in technology and the burgeoning potential of the personal computing industry. This experience at Intel, combined with his engineering background and an MBA from Harvard, equipped Doerr with a unique perspective on technology and business, which led to funding companies that have defined the internet age, such as Amazon, Google, and Twitter.

Doerr has also been a mentor to many aspiring entrepreneurs and has played a significant role in shaping Silicon Valley's culture of innovation and risk-taking. His book, "Measure What Matters," has been adopted by numerous successful companies to drive growth.

Lesson: Passion and belief in innovation are critical.

Doerr's investments show that being deeply invested in the mission and vision of the companies you back, and choosing founders who are genuinely passionate about their work, can lead to extraordinary outcomes.

6. Mary Meeker

Mary Meeker started her career on Wall Street in the 1980s, eventually becoming a leading technology analyst at Morgan Stanley. In the 1990s, during the dot-com boom, her research and predictions about the internet's growth and its impact on businesses were groundbreaking.

Her work earned her a reputation as a go-to expert on digital technology trends. In 2010, she transitioned from her role as an analyst to become a partner at Kleiner Perkins Caufield & Byers.

In 2019, Meeker founded Bond Capital, a venture capital firm where she continues to influence the tech industry through strategic investments.

Lesson: Deep industry knowledge and market trend analysis are invaluable for identifying the next wave of mega entrepreneurs.

7. Peter Thiel

Born in Frankfurt, Germany, in 1967 and raised in the United States, Thiel is one of the most-renowned names in the startup world. He is the co-founder of PayPal and an early investor in Facebook, and his approach to venture capital is anything but conventional. Through Founders Fund, his venture capital firm, Thiel has funded many ambitious startups.

He studied philosophy at Stanford University, where he received his Bachelor's degree, followed by a Juris Doctor from Stanford Law School. It was during his time at Stanford that Thiel began to develop his critical thinking and contrarian views, which would later become part of his investment philosophy. His investment philosophy, as outlined in his book "Zero to One," advocates for backing companies that create new markets or monopolies, not just those that enter existing ones.

He also founded Thiel Fellowship, which provides $100,000 grants to young entrepreneurs willing to drop out of college to pursue their business ideas.

Lesson: Investing in companies that can define a new market segment can yield unprecedented returns.

8. Vinod Khosla

Vinod Khosla, along with Stanford classmates Scott McNealy, Bill Joy, and Andy Bechtolsheim, founded Sun Microsystems. Sun Microsystems contributed significantly to the development of network computing and the widespread adoption of the Java programming language.

In 2004, Khosla Ventures was founded, with a focus on technology, energy, and the environment. Khosla's approach to venture capital is all about "black swan" ideas—ventures that, if successful, could lead to disproportionate impacts on society and industry.

His investments span a wide range of sectors, including biofuels, robotics, healthcare, and artificial intelligence. Despite his successes, Khosla has also faced notable failures, something that is inevitable as a VC.

Lesson: High risks can lead to high rewards, but only if you're prepared for the failures along the way.

9. Ann Winblad

Ann Winblad co-founded Open Systems Inc., a company specializing in accounting software, with a modest initial investment. Her leadership and vision led the company to success, and it was eventually sold for over $15 million in 1984, a significant sum at the time.

Winblad then co-founded Hummer Winblad Venture Partners in 1989 with John Hummer. This was the first venture capital firm focused exclusively on software investments. She’s been heavily involved in mentoring aspiring business women, and helped paved the way for future generations of women in VC.

Lesson: Diverse perspectives and mentorship are critical for fostering innovation and growth in the tech ecosystem.

10. Jim Breyer

Jim Breyer, founder and CEO of Breyer Capital, is a true titan in the VC world. He has a remarkable track record of identifying high-potential startups early in their journey, standing out for his exceptional ability to identify and nurture founders and startups in the technology and social media sectors.

Breyer's early career saw him at McKinsey & Company, and later at Apple Inc., where he developed a passion for the intersection of technology and consumer behavior. However, it was his role at Accel Partners, starting in 1987, that really pushed him into the VC spotlight.

Perhaps the most notable of Breyer's investment decisions was his early stake in Facebook in 2005. Breyer, through Accel Partners, led a $12.7 million investment in Facebook when the social network was just a year old and largely unknown outside college campuses.

In 2006, Jim Breyer founded Breyer Capital, a global VC firm, further expanding his influence and ability to support innovative companies across various stages of growth.

Lesson: The quality of the founding team is as crucial as the idea itself in the success of a startup.

11. Marc Andreessen

Marc Andreessen, the co-founder of Mosaic and Netscape, later became a prominent venture capitalist through Andreessen Horowitz (a16z). In 2009, Andreessen, along with his longtime business partner Ben Horowitz, founded a16z, a venture capital firm that quickly became one of Silicon Valley's most prominent and influential firms after investing in companies that have become household names, such as Facebook, Twitter, Airbnb, and Coinbase, among others.

Andreessen’s investments span across a wide range of sectors, including social media, software, and biotech. His belief in software "eating the world" has driven his investment strategy, focusing on companies that leverage technology to disrupt traditional industries.

Lesson: Look for companies that use technology to address fundamental problems in large markets, as these are poised for exponential growth.

Institutional Investors That Shaped the VC Industry

Y Combinator

Y Combinator (YC) was founded in 2005 by Paul Graham, Jessica Livingston, Robert Morris, and Trevor Blackwell, with a unique model that was somewhat different from traditional venture capital firms at the time.

Graham, after selling his startup Viaweb to Yahoo!, wanted to create a new way to fund early-stage startups by providing not just capital but also guidance, advice, and networking opportunities.

YC introduced the concept of the "startup accelerator" to the VC industry. The idea was to invest small amounts of capital in a large number of startups simultaneously, providing them with an intense, short-duration mentorship program to accelerate their growth. This was a departure from the more traditional, one-on-one, high-stakes venture capital investment model.

The first YC batch in the summer of 2005 included eight startups. This innovative model quickly gained traction and has since supported thousands of startups, making YC one of the most influential players in the VC space.

Lesson: The power of community and network.

YC’s community of founders, mentors, and alumni is a great example of the power of the “network effect.” This network effect can significantly amplify a startup's chances of success since both founders and investors have access to a much larger pool of resources.

Sequoia Capital

Sequoia Capital was founded in 1972 by Don Valentine, a veteran in the tech industry, who played a pivotal role in the development of Silicon Valley.

Sequoia's early investments included pivotal firms like Apple, Atari, Oracle, and later, Google. The firm's philosophy was built around supporting daring ideas that push the boundaries of markets and technology.

This vision laid the groundwork for what Sequoia Capital would become: a global venture capital firm with a reputation for building enduring companies.

Lesson: Long-term vision.

Sequoia Capital's ability to invest in companies across various stages of their life cycle demonstrates the importance of a long-term vision in venture capital. Their willingness to support companies over decades is what has contributed to the firm's incredible success.

Benchmark

Benchmark was founded in 1995 by Bob Kagle, Bruce Dunlevie, Andy Rachleff, Kevin Harvey, and Val Vaden, in Menlo Park, California. Its founding principle was somewhat revolutionary in the venture capital world: all partners would be equals, a contrast to the hierarchical structures typical in other firms.

This egalitarian approach was designed to ensure that all investments would benefit from the collective wisdom and effort of the entire partnership, rather than being the sole responsibility of individual partners.

The firm quickly made a name for itself in the tech industry with early investments in successful companies like eBay, where Benchmark's $6.7 million investment turned into $5 billion, showcasing the potential of their approach.

Benchmark's strategy focused on early-stage investing, often leading funding rounds in startups that showed significant promise.

Lesson: Adaptability and evolution.

While Benchmark started with a focus on Silicon Valley tech startups, they have adapted their strategy over time to include a broader range of industries and geographies. This willingness to evolve has kept them relevant in a rapidly changing market.

New Enterprise Associates (NEA)

Founded in 1977 by Chuck Newhall, Frank Bonsal, and Dick Kramlich, NEA is one of the world's largest and most established VC firms, known for its long-term approach to investing and its broad spectrum of investments across various stages and sectors.

It has been involved in over 230 IPOs and more than 390 mergers and acquisitions, a testament to its successful investment strategy and the enduring growth of the companies it supports. NEA manages billions of dollars in assets and has invested in a wide range of industries.

Lesson: Diversification across sectors and stages.

By not limiting itself to specific sectors or stages of company development, NEA has shown the value of a diversified investment strategy. This approach not only spreads risk but also capitalizes on opportunities across the entire spectrum of business growth.

Greylock Partners

Founded in 1965 by Bill Elfers and Dan Gregory, Greylock Partners is one of the oldest venture capital firms in the United States. The firm was named after Greylock Mountain in Massachusetts, reflecting the founders' roots in the East Coast before the firm eventually moved its focus to Silicon Valley.

Greylock was founded with the belief that providing capital along with strategic guidance could help fledgling companies achieve significant growth. This core operating principle earned it a reputation as a founder-friendly firm.

Over the years, Greylock has made a series of bets on companies that have become household names. Greylock's early investments include companies like LinkedIn, Facebook, Airbnb, and Workday, showcasing its ability to spot high-potential startups.

Lesson: The importance of strategic location.

Greylock's decision to move closer to Silicon Valley highlights the importance of being geographically close to the epicenters of innovation. Proximity can help a firm's ability to identify emerging trends and build strong relationships with entrepreneurs.

The Fundamentals Remain the Same

The lessons from the titans of VC are a reminder that while technology and business is always evolving, the fundamentals of great investing remain constant: belief in innovation, support for visionary entrepreneurs, and the courage to make bold bets.