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Jensen Huang: “VCs don’t invest in business plans”

Name: Jensen Huang: “VCs don’t invest in business plans”
Uploaded: 2025-01-10T11:40:00+00:00
Duration: 1 min 27 s
Channel: Lorenzo
Description: A short excerpt from a YouTube talk by Jensen Huang arguing that venture capitalists invest in people and vision rather than written business plans…

10 Jan 2025 · 1 min

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1:27

A short excerpt from a YouTube talk by Jensen Huang arguing that venture capitalists invest in people and vision rather than written business plans because plans are easy to produce. He emphasizes the importance of reputation and prior collaborations (naming Andy Bechtelsheim and founders of Synopsys and LSI Logic), the need for a large market opportunity to justify investment (examples: $10 million investment vs $20 million market; $200 billion market), and the ability to reinvent a company over time with great people.

Questions this video answers

Andy Bechtelsheim, and the founders of Synopsys and LSI Logic.

If a VC must invest $10 million into a company whose market is only $20 million, they'll likely not get a reasonable return.

A $200 billion market.

Chapters

VCs don't invest in business plans because business plans are easy to write. I couldn't write it, but other people could. Right? And so they invest in this, they invest in great people. And so the question is, do they trust you? Your reputation matters, your history matters. Because I had done so much work with Andy Bechtelsheim, which was another graduate of Stanford and the founder of sun, and worked with the founders of Synopsys and LSI Logic, and we were all very successful and we did good work. Your reputation will proceed you even if your business plan writing skills are inadequate. The second thing is you need to have a vision that's sufficiently large to invest in because their statistics, their probability of success is rather low. And if they need to put in $10 million, if the market's only $20 million large, they'll never get that $10 million back with reasonable return. But if it's a 200 billion dollar market, then of course it's a rather different thing. Okay, so the size of the market, that last part is probably second because also I think it's the least important. You might have to reinvent yourself over time. And if you want to reinvent yourself, you need to have great people. That's why great people.