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Secure That First Investor, and the Rest Will Come

This story appears in the June 2014 issue of Entrepreneur. Subscribe »

The $19 billion acquisition of WhatsApp by fascinated me not just for its sheer size but because the primary investor, , went it mostly alone. This is highly uncommon in the "me, too" world of , where everyone appears to invest as part of a syndicate. Indeed, the typical first question out of a VC's mouth when talking to a startup about investing is, "Who's leading this?"

The question points to a paradox about VCs in general. Everyone wants to tout that they're the best at sniffing out the next WhatsApp, but when it comes to putting money behind that startup, they want some other firm to have skin in the game first.

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