by Pete Flint, Managing Partner (@PeteFlint)

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In nuclear physics, the minimum amount of fissile material needed to create a self-sustaining nuclear chain reaction is known as critical mass. The idea is that, in complex systems, moving beyond a threshold can suddenly unleash powerful, self-sustaining change.

From my own experience of founding and investing in companies, this was an irrefutable law that I applied to startups, too. Enter a market too early, no matter how strong the founding team, and you could be stuck waiting for a day that never comes. Enter too late and you’re fighting an uphill battle against…


by Pete Flint, NFX (nfx.com / @NFX)

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In Silicon Valley, we worship the idea of superpowers — and for good reason. When you meet an outstanding Founder it’s like coming face-to-face with a true force of nature. They see what others do not. Their reality is not, nor ever has been, realistic in the ordinary world.

These “reality distortion fields” are necessary for the extreme sport of startups. I certainly found this to be true when I was building and scaling Trulia. How else can you sell a product to customers that doesn’t even exist yet? A future revenue plan for investors that is more pipe-dream than…


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Today we’re launching VCMatchApp.com.

It’s built for Founders to find the right VC faster.

Try it out here.

To uncover your best VC matches, answer 7 questions about your company and founding team, and connect to your network. You’ll then be able to see your top VC matches, including who scores #1. It works because there’s a ton of community-inputted data and complexity in the backend.

We’re sick of living in the dark ages of fundraising. We hope VC Match is the first step in finding a better way.

VC Match is a community-powered tool, and is in beta. Each…


Uncovering How VC’s See Your Startup

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by James Currier, Managing Partner

A few years ago, we realized that most investors were doing something they weren’t even aware of when they were evaluating companies. They have a mental framework that lets them judge a startup based on a core group of predictors for risk and success that we call the “Ladder of Proof.”

We thought a lot about this because we’ve founded and raised capital for ten companies, and helped hundreds more raise. We also read up on evidence hierarchies building on some ideas we discussed with the ever-brilliant Mike Maples of Floodgate. The Ladder of Proof is unique for each investor…


by Pete Flint, Managing Partner

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Silicon Valley has long championed the belief that software and algorithms alone are sufficient to innovate traditional industries. However, as innovation further penetrates our daily lives and activities, increasingly the category defining companies are those that have access and capabilities that go far beyond software. It is these capabilities that enable a wildly better user experience and build long term defensibilities. I saw this close up as the Founder and CEO of Trulia which alongside Zillow (which it later merged with) transformed access to real estate information. Now as investors at NFX, my Partners and…


by James Currier (Managing Partner @ NFX) & the NFX team

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Network effects have been responsible for 70% of all the value created in technology since 1994. Founders who deeply understand how they work will be better positioned to build category-defining companies.

This reference for Founders will be continually updated and includes a comprehensive collection of terms and insights related to network effects all in one place.

Roadmap

  1. Why Network Effects Are Important
  2. How Networks Work
  3. Properties of Networks
  4. Building and Maintaining Network Effects
  5. Related Concepts


By James Currier

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Today, Mammoth Biosciences announced their new CRISPR-based bio-development platform to the world. As the first investors in Mammoth, we wanted to share some of our thoughts around how a biotech company like Mammoth fits into our investment philosophy in network effects businesses — and how companies from traditionally analog industries like biotech are increasingly starting to resemble tech companies.

Mammoth’s Core Technology

Mammoth aims to be a true platform — a technology company on which other independent businesses can be built — so they need some serious core technology. In fact, they have two core components powering their business. …


by James Currier, Managing Partner, NFX
(nfx.com | @JamesCurrier)

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We don’t think most people really understand Facebook yet.

The recent round of negative press seems to indicate a surface-level understanding of the company. It’s important to look beneath the surface and examine the underlying laws of nature and physics that make Facebook tick.

In short, Facebook stands alone in the depth and variety of network effects they’ve built, even though most go undetected. As a result, their defensibility is unparalleled.

The network effect visible to most is many-to-many personal direct nfx. This is the core of what enabled Facebook to…


In our new series, “How It’s Built”, we uncover the thinking behind moves in the startup world. Today we’re featuring a conversation between Rick Yang (NEA / @rickyang) and James Currier (NFX / @JamesCurrier) about their recent $15.5 million series A investment in Lyric (co-founders Andrew Kitchell and Joe Fraiman).

A conversation between Rick Yang (NEA) and James Currier (NFX)

Notes from NFX

Financings are important milestones in the overall arc of the company building process. As Founders ourselves before NFX, we always wanted to get an inside view of how some of these VC financings actually went down. Now that we’re on the inside of many of them, we want to make the decision process more transparent, and share the learnings we get from the investments we make.

8 Lessons Founders can learn from Lyric:

  1. More often than not, disruption starts with data. We were impressed in 2015 that the Lyric team…


by Pete Flint, NFX (nfx.com / @NFX)

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Disorder, or entropy, always increases with time. In other words, it is a form of Murphy’s law: things always tend to go wrong!

- Stephen Hawking, A Brief History of Time

Why do apparently successful startups suddenly fail? We’ve all seen this happen on occasion, and to the untrained eye it’s hard to detect a pattern. When it happens it’s usually explained away as owing to a “lack of funding” or a “tough market”. But if you look closely at startups like these, you’ll see the internal chaos hidden beneath a well-ordered veneer.

We know from the second law of…

NFX

See what others do not. NFX is a seed-stage venture firm that is a transforming how true innovators are funded.

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