Subscribe NOW

Enter your email address:

Text Message our CEO:


or on twitter

Free Resources

Click Here to learn more

In The Media

What a Supermodel Can Teach an LP About Seeking Alpha

by Larry Chiang on October 17, 2011

Larry Chiang scandalously takes you behind the scenes to break down how business really works. He edits the Bloomberg BusinessWeek channel “What They Don’t Teach You at Business School”. After Chiang’s Harvard Law keynote, Harvard Business wrote: “What They Don’t Teach You at Stanford Business School“ (its the same title as his NY Times bestseller). He is Entrepreneur in Residence at Stanford University. If you read his hilariously awesome “What a Supermodel Can Teach a Stanford MBA” and “How to Get Man-Charm”, you will like his latest post:

What a Supermodel Can Teach an LP (Limited Partner) About Seeking Alpha

By Larry Chiang

Seeking that ever elusive alpha is what me, VCs and celebrity founders are all after. Alpha is return that is above and beyond regular investment returns. On Thursday October 20 in SF, I will be there at Venture Alpha.

Here are the patterns I observe, how my pattern will iterate and how I plan to pattern replicate.

-1- I Kiss Rings.

You name the fashionable ring, I have kissed it. Is there a angel investor en fuego?! I wine em, dine ’em and let them pitch for free at my Reverse VC pitch panels.

Is there an incubator ginning out the hits?! I bow down at their feet and pucker up.

Is there a tech founder that forgot to invite me to their Christmas soirée?! I send bottles anyway. If Mumm’s in Napa had kegs of chilled Champagne, I’d send them.

-2- I Kiss Ass Downstream.

Know of a random collection of cs majors at MIT, Urbana, or Palo Alto’s Community’s college?!

Effen text message me!

They probably need $500 for a hack-a-thon. Maybe they’re hosting an oh-so-shiek Startup Weekend and need food and snacks. I’m your first call. When you dollar cost average every CS major that lands in my rolodex, I pay about one Andrew Jackson per lead. If you are foreign, it is $20.oo US.

For example, I am hosting a movie premier at Stanford: Something Ventured. If you’re a cs major, I pay you $20 if you show up. Gawd, I am a hiLarryAss.

It leads me to my next point…

-3- I Develop a Farm System.

VCs talk Moneyball but who executes Moneyball.

No one.

VCs that are false-ly in the ‘know’ are seeking to get their equivalent stat to ‘on base percentage’. Plot spoiler: OBP doesn’t correlate in entrepreneurship.

The right way is to develop a farm system of possible tech co-founders. You see, the best founders are currently employee number 4-12. Before you are employee #9, you probably were an intern. I hack and execute the Moneyball theory by helping CS majors engineer three internships in a row. Yes, I also fly cs majors out to tech conferences like SXSW in Austin or Austin City Limits.

God, I am so fun to be with on a boondoggle.

This dovetails into my alpha seeking smart bomb…

-4- I invest in sub Seed Stage

You can’t make a return when you’re doing an $800k no cap note rounds with zero board seats.

Instead… Invest in sub seed stage.

Ya know how I used date the hottest coolest smart women right here in the bay area?! I used the pepper and pass lead generation system to build up my ‘sales funnel’. My sub seed stage is just like my farm team. My sub seed stage is just that. It is before your seed and way before your a-round.

I calculate that 8 years before a 24 tech founder started something, they were 15.9 years old.

Think about it.

Remember, you can’t violate COPPA if you get a kid not old enough to have a drivers license to text message you. My lawyer has me carry parent guardian waivers on my iPad 5.

-5- Landlord and Tenant Maneuver.

When you’re landlord and tenant, you benefit.

Majority of business value comes from the land that the business sits on. I never forgot this pattern that I recognized. I replicate this pattern not by getting founders to buy land, I pattern replicate by doing the opposite of a Pyrric Victory. You see, I collect together team of CS majors to copy-paste 80% of an existing business. I teach them to sell.

If they fail, then I have a team of 3-5 CS majors that I can sell into another one of my portfolio companies. They get an exit under their belt. Later, even if they fundraise with a different firm that tries to invest in everything I do, I can still wedge in some money because I was the guy that gave them their big break.

This is me:

Larry Chiang
CEO, Duck9
Stanford Entrepreneur in Residence

Duck9 = Deep Underground Credit Knowledge 9
125 University Ave Suite 100
Palo Alto CA 94301

Editor of the BusinessWeek Channel “What They Don’t Teach at Business School
NY Times Bestselling Author
“What They Don’t Teach at Stanford Business School”

650-566-9696 (direct)
650-283-8008 (cell)


If you liked this…
Larry’s mentor Mark McCormack wrote this in 1983.
His own book came out 09-09-09. It is called ‘What They Don’t Teach You At Stanford Business School

*** BONUS ***
a party invite for you…


This post was drafted in an hour and needs your edits… email me if you see a spelling or grammatical error(s)… larry@larrychiang com

Larry Chiang started his first company UCMS in college. He mimicked his mentor, Mark McCormack, founder of IMG who wrote the book, “What They Don’t Teach You at Harvard Business School”.
Chiang is a keynote speaker and bestselling author and spoke at Congress and World Bank.

Text or call him during office hours 11:11am or 11:11pm PST +/-11 minutes at 650-283-8008. Due to the volume of calls, he may place you on hold like a Scottsdale Arizona customer service rep. If you email him, be sure to include your cell number in the subject line. If you want him to email you his new articles…, ask him in an email :-)

You can read more equally funny, but non-founder-focused-lessons on Larry’s Amazon blog .

Leave a Comment

Previous post:

Next post: