VC breaks down the three types of risk every investor must choose

Anish Acharya, general partner at a16z, about the future at SaaS in an AI world on a16z Podcasta16z Podcast · Anish Acharya: Is SaaS Dead in a World of AI?

So first of all, I think as an investor, you have to decide what kind of risk you wanna take.

47:46 / 48:23

Yes. Well okay. So first of all, I think as an investor, you have to decide what kind of risk you wanna take. Okay? So that is what we're paid to do. So let's talk through what are the different types of risk. So the first risk is one that you mentioned. That is competitive risk. Can I win this process or not? Okay? The second risk, and this is a a maybe a slightly less good risk to take, but I think still a fine one, is pricing risk. Did I overpay? And, again, I think the way that shows up is the difficulty of the next round based on your entry price. Right? Maybe the third risk is, team risk. Can this team actually go the distance and try, like you know, can the company be can they be big enough to fulfill the company's ambitions? Because I think the founder themself

About this clip

Anish Acharya outlines his framework for evaluating investment risk, identifying three key categories: competitive risk (can you win), pricing risk (did you overpay), and team risk (can founders execute at scale). He explains how each type of risk manifests and which ones are worth taking as a VC.

Why this clip

Provides a clear, actionable framework that both investors and founders can use to think about risk evaluation in venture deals.

47:46 - 48:2337sframework

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