The Full Ratchet (TFR): Venture Capital and Startup Investing Demystified 334. A Decade at Costanoa, Where Large Multistage Funds Fail Founders, Denominator v. Numerator Effects, and Tips on Startup Selection (Greg Sands)
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May 26, 2022 
Greg Sands, founder and managing director at Costanoa Ventures with roots at Netscape and Sutter Hill. He discusses Costanoa’s seed/Series A focus and builder ops model. He recounts early product lessons from Netscape. He contrasts large multistage funds with founder-first approaches. He explains denominator vs numerator effects and shares practical startup selection tips.
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Show Momentum And Communicate Strategy
- When fundraising, demonstrate momentum by recruiting high-quality individuals and smaller institutions early.
- Communicate clear strategy, reserve plans, and follow through to keep LPs engaged and willing to re-up.
Prioritize Founders At Seed
- Prioritize people above all at seed stage since so much remains unknown.
- Evaluate founders' learning ability and growth mindset as core signals of future success.
Learn Product Fit On Sales Calls
- Product-market fit often shows itself on sales calls and customer conversations.
- Costanoa goes on sales calls to learn rapidly because founders won't always introduce prospects pre-close.
