Sequoia’s Doug Leone explains what made Drew Houston’s pitch for Dropbox great

Dropbox raised a $1.2 million seed round at a $5 million valuation from Sequoia in 2007. Eleven years later, the company went public at a valuation of $9 billion.

In hindsight it’s a home run, but in 2007 Dropbox was far from a sure thing. Online storage was a commodity with lots of competition. But Drew Houston’s clear thinking stood out and helped secure the venture funding from Sequoia.

Doug Leone recounts:

“Drew Houston was going to launch a company in a crowded market, yet he could clearly articulate why none of the existing products were going to make it. Crystal clear thinking is one of the things we look for—not a fancy slide pitch.”

Don Valentine and Ben Horowitz also emphasize the importance of clear thinking and the ability to tell a great story if you’re looking to raise venture capital. Ben argues:

“Storytelling is the most underrated skill… Companies that don’t have a clearly articulated story don’t have a clear and well thought-out strategy. The company story is the company strategy.”

So if you’re raising money, make sure you have a good story that you can clearly articulate. Why does the world need your company?

Full video: Stanford Graduate School of Business “Sequoia Capital's Doug Leone on Luck & Taking Risks“ (Nov 2014)