Book · How the machine works

Secrets of Sand Hill Road

Name: Secrets of Sand Hill Road
Author: Scott Kupor

Scott Kupor · 2019

How a venture firm actually operates — where its money comes from, what its own investors demand of it, and why that shapes every decision it makes about your company.

Why it is here

Written by the first employee at Andreessen Horowitz, this explains the layer above the deal: how funds raise from limited partners, how fund economics and fund life work, and why a firm behaves as it does at particular moments.

For an angel that is the missing context. When a lead pushes for a term, insists on a timeline, or declines to follow on, the explanation is usually structural — fund size, fund age, reserve policy, the pressure to show returns to their own investors. None of that is visible from outside and all of it affects your position.

It also demystifies the parts of a term sheet that Venture Deals covers, from the other side of the table, which makes the two genuinely complementary rather than redundant.

Read it if

You co-invest alongside institutional funds and want to understand what is driving their behaviour.

Skip it if

You invest only at pre-seed with other individuals and expect never to sit alongside a fund.

Pair it withVenture DealsBrad Feld & Jason MendelsonThe clearest explanation of how a venture financing actually works, written by two investors who got tired of founders not understanding what they were signing.

What it explains

Terms this covers

Syndicate carryThe share of an investment's profit — conventionally 10% to 20% — paid to the person who sourced, diligenced and led the deal, in exchange for letting others invest alongside them.Pro-rata rightsThe right, but not the obligation, to invest enough in future rounds to maintain your existing percentage of the company.Protective provisionsA list of company actions that cannot be taken without the consent of a specified majority of preferred shareholders — regardless of what the board or the founders want.