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Sonali De Rycker | How I Became a Partner at Accel; Type 1 vs. Type 2 Mistakes | 20VC #902

Sonali De Rycker is a Partner @ Accel, one of the leading firms of the last 3 decades with a portfolio that includes the likes of UiPath, Miro, Spotify and many more incredible companies. As for Sonali, Sonali led Accel’s investments in Avito (acquired by Naspers), Spotify (NYSE: SPOT), Primer, Monzo, Letgo (acquired by Naspers), Kry/Livi, Soldo, Hopin, and Sennder. Prior to Accel, Sonali was with Atlas Venture (now Accomplice). She also previously served on the board of Match.com (NASDAQ:MTCH). -------------------------------- Chapters: 0:00 Sonali's background 5:25 How did previous recessions affect your mindset? 11:00 How do you think about time allocation across your portfolio? 12:50 Are managers going to be proactive in revaluing their books? 15:05 How is it that you bring such cohesion and stability to Accel? 18:18 Is it easier to be vulnerable after you become successful? 19:30 How would you describe Accel's culture? 21:43 How do you prevent yourself from becoming a bottleneck? 23:34 How do you find talent when hiring? 27:02 Advice for young investors seeing their first downturn 32:20 How to stay ambitious during a economic downturn 34:20 Will economic downturn cause price inflation at seed stage? 37:35 How has your investing style changed over the years? 39:30 Is there any point in doing outcome scenario planning? 41:00 Lessons on Reserves 44:47 What do you do when you lose faith in a founder? 46:58 Type 1 vs. Type 2 mistakes 49:45 What are your biggest insecurities? 54:14 What do you make of the big US players coming to London? 56:57 What's your favourite book and why? 57:25 What's your biggest strength and weakness? 57:48 Hardest element of your role today? 58:30 What advice do you often give but have a hard time following yourself? 58:50 What do you know now that you wish you knew when you started? 59:08 Most recent publicly announced investment ------------------------------------ In Today’s Episode with Sonali De Rycker You Will Learn: 1.) From Small Town in India To Leading Venture Capitalist: How Sonali made her way from a small town in India to becoming one of the most prominent VCs of the last decade? What were some of Sonali’s biggest lessons from seeing the booms and busts of 2000 and 2008? What climate does the crash today resemble more? Why so? How does Sonali advise younger investors who have not lived through a downturn? What should their investor psychology be right now? 2.) Firm Building: Accel: What are the most challenging and non-obvious elements of building a firm today? What have been some of the biggest mistakes Accel has made when adding to the team? What qualities does Sonali and Accel specifically look for when interviewing candidates to join the team? What specific questions tease out whether the candidate has these traits? What specific structures do Accel have in place to encourage the team to work together as one cohesive unit? How do they use bonuses as a team incentive? 3.) Sonali: The Investor: How has Sonali’s investing style changed over the years? What moments caused these changes to happen? What are some of the biggest mistakes Sonali has made in her investing career? What did she learn from them? On the flip side, from winners such as Spotify and Supercell, what did Sonali learn from her biggest winners? Why does Sonali believe that market sizing and outcome scenario planning is useless and will lead you to make the wrong decision? 4.) Decision-Making and Risk: What does Sonali mean when she speaks of Type 1 and Type 2 decisions? How should one’s decision-making process change according to which type of decision it is? What are the two biggest risks startups are facing today? Does Sonali believe that seed stage companies will take money from crossover funds? What does Sonali do when she loses faith in the founder? How does she communicate that to them in the right way? What have been some of her biggest lessons here? What have been some of Sonali’s biggest lessons when it comes to reserves management? How does Sonali determine when to double down vs reserve cash? ---------------------------------------- #SonaliDeRycker #20VC #HarryStebbings #Accel #venturecapital #investing #startupadvice #founder #businessadvice #startup #entrepreneur

Sonali De RyckerguestHarry Stebbingshost
Jun 26, 202259mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

Sonali De Rycker on Cycles, Founders, and Building Accel London

  1. Sonali De Rycker traces her journey from socialist India to Wall Street, then into European venture capital and ultimately Accel, highlighting how early scrappiness and risk-taking shaped her investing career.
  2. She contrasts the 2000 and 2008 downturns with today, emphasizing fiduciary responsibility, realistic marking of portfolios, and the importance of never stopping investing despite market fear.
  3. A large portion of the discussion centers on firm-building at Accel London: culture, delegation, talent selection, and how to be ‘hyper-competitive outside, ultra-collaborative inside’.
  4. She also dives into founder selection, Type 1 vs Type 2 errors, reserves, cap table dynamics, and how great founders and companies routinely exceed any outcome scenario planning.

IDEAS WORTH REMEMBERING

5 ideas

Never stop investing, even in harsh downturns.

Sonali argues that when firms lose their confidence and pause investing, they lose their right to exist; many funds in 2000 disappeared precisely because they froze instead of continuing to back new founders.

Treat capital as precious and be a true fiduciary.

Her stories from 2000 and Lehman’s collapse in 2008 reinforced meticulous attention to small outcomes and disciplined valuation as core to serving founders, LPs, and shareholders responsibly.

Founders and relationships matter more than precise models or scenario plans.

She stresses that when conviction in a founder is viscerally strong, you should ‘just find a way’ to partner; outcome scenario planning is of limited use because the biggest winners always outgrow early projections.

Great firm culture combines intense external competitiveness with deep internal collaboration.

Accel aims to be hyper-competitive for deals yet ultra-collaborative internally, with shared bonuses for sourcing, real-time feedback, a dedicated talent/“Wendy” role, and norms that avoid star cultures and sharp elbows.

Select and develop investors on character traits, not just IQ.

Resilience, self-awareness, reflection, and persuasion are screened via deeper interview questions (e.g., surprising negative feedback, biggest mistake), because most of the job is emotional and relational, not spreadsheet work.

WORDS WORTH SAVING

5 quotes

I feel like I was my startup.

— Sonali De Rycker

The minute you lose your confidence, you lose your right to exist.

— Sonali De Rycker

When you have complete, unadulterated, visceral conviction around a founder, just find a way to partner with them.

— Sonali De Rycker

We want to be hyper-competitive on the outside and ultra-collaborative on the inside.

— Sonali De Rycker

It’s not about the type one mistakes; it’s all about the type two mistakes.

— Sonali De Rycker

Sonali’s personal and career journey into venture and AccelLessons from the 2000 and 2008 downturns and current market conditionsFiduciary duty, valuation practices, and LP relationshipsAccel’s culture, global structure, and firm-building in EuropeTalent identification, interviewing, and developing younger investorsPortfolio management: time allocation, reserves, and follow-on decisionsFounder selection, errors (Type 1 vs Type 2), and investor insecurities

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