At the recent ACA Summit, Stanford professor and venture capital expert Ilya Strebulaev shared insights from his decades of research into what makes unicorns—and the investors who back them—so successful. Drawing from his work with the Venture Capital Initiative and his book ‘The Venture Mindset,’ Strebulaev offered a data-driven look at how top VCs think, act, and win. Here are the key takeaways for angel investors looking to find their next unicorn.
Investment Strategies: Home Runs Matter
Strebulaev emphasized that successful VCs focus on home runs—those rare investments that return 100x or more. In a typical early-stage portfolio, 15 out of 20 investments may fail, and only one might deliver outsized returns. The lesson for angels: don’t fear strikeouts. Instead, optimize your strategy to increase the odds of hitting a home run.
Market Trends: Follow the Fast Movers
Innovation is accelerating. Technologies like ChatGPT reached a million users in days, not years. VCs are increasingly investing in AI and GenAI, with 45% of new unicorns in these sectors. Angels should watch these trends and be ready to move quickly when new markets emerge.
Startup Evaluation: The Team is Everything
The most important factor in startup success? The team. Strebulaev’s research shows that top-performing startups are led by founders with strong academic and professional backgrounds—often from universities like Stanford or companies like Google. Teams that have worked or studied together before are especially promising.
Due Diligence: Learn from Your Anti-Portfolio
Top VCs track their ‘anti-portfolio’—the deals they passed on that went on to succeed. This practice helps refine decision-making and avoid future misses. Angels should do the same: analyze the deals you didn’t do and ask why. You’ll learn more from your misses than your hits.
Networking and Mentorship: Build and Share
Successful investors don’t go it alone. They build networks, mentor founders, and collaborate with other investors. Strebulaev highlighted the importance of sharing deal flow and supporting founders even when you don’t invest. A strong ecosystem benefits everyone.
Continuous Learning: Stay Curious and Patient
Unicorns take time—often 8 to 12 years from founding to exit. Investors must be patient and continuously refine their approach. Strebulaev’s data shows that the best returns come from those who stay the course, learn from experience, and keep improving their strategy.
Finding the next unicorn isn’t about luck—it’s about mindset. By focusing on big wins, learning from your misses, and investing in great teams, you can dramatically improve your odds. As Strebulaev’s research shows, the venture mindset is not just for VCs—it’s a powerful tool for angels too.
Professor at Stanford | Bestselling Author | Innovation | Venture Capital & Private Equity
