This Founder-Turned-Venture Capitalist Helped Build A Unicorn, Co-Founded A Company That Sold For $300 Million, And Is Now a Best-Seller Author and Harvard Business School Professor

In the dynamic world of startups, few figures personify the full arc of the entrepreneurial journey like Jeff Bussgang. A computer science graduate from Harvard with a passion for artificial intelligence since the 1980s, he has navigated nearly every phase of company building.

Jeff has taken his companies through the full cycle from founding and scaling to exiting by taking them public. He endured the dot-com bust and ultimately transitioned to the other side of the table, becoming a highly respected venture capitalist.

In this conversation, Jeffrey reflects on his four decades of entrepreneurship, his latest book The Experimentation Machine, and what it takes to build and fund great companies in the age of AI.

Listen to the full podcast episode and review the transcript here.

A Legacy Rooted in Resilience and Innovation

Jeffrey was born in Cambridge, Massachusetts, in 1969, not far from where his father, a Holocaust survivor and tech visionary and entrepreneur, had studied at MIT and earned his PhD at Harvard. His father’s invention of the “Bussgang Theorem” in signal processing left a deep impression on him.

From a young age, Jeff was immersed in a household where math, science, and entrepreneurial thinking were part of dinner table conversations. He taught himself programming during the Apple II era and chose to study computer science and AI at Harvard.

Jeff recalls arriving at Harvard in 1987 as a freshman to study natural language processing, neural networks, and computer vision decades before AI would become mainstream.

He loved the idea of being able to communicate with AI, pass the Turing test, parse grammar, language, and read. Using computer vision to read and recognize images was utterly fascinating for him.

Learning to Deconstruct Complexity at BCG

After college, Jeff joined The Boston Consulting Group (BCG), where he sharpened his problem-solving and strategic thinking skills. “Consulting helped me break down big problems into solvable pieces,” he explains.

This foundation in structured analytical thinking proved invaluable as Jeff transitioned into the startup world. At BCG, he also learned about value pools and value creation. He became skilled at using PowerPoint, communicating effectively, and synthesizing complex issues and problems.

Since the beginning of his career, Jeff wanted to be a tech entrepreneur like his dad. An MBA from Harvard Business School would be an excellent first step. Shortly after arriving in 1993, he encountered the Mosaic browser and was impressed by the idea of the Internet as a potential business environment.

Jeff co-authored one of the first articles in Harvard Business Review on that topic and joined a seed-stage internet startup after graduation in 1995.

Rocket Ship Beginnings: OpenMarket and the First IPO

After earning his MBA from Harvard, Jeff joined Open Market, one of the earliest internet infrastructure companies backed by Greylock. “Hardly anybody was starting VC-backed companies in 1995,” he recalls.

When Jeff joined the company, it had raised a few million dollars and had a small team and vision. Open Market’s bold mission was to commercialize the internet by providing the tools, platforms, and infrastructure to enable that. And it delivered!

Just a year later, in 1996, the company went public with a billion-dollar valuation, years before the term “unicorn” became common parlance. It hired a few hundred people within the first couple of years and scaled rapidly, building several products.

Still in his 20s, Jeff remembers being on the executive team of a terrific rocket ship ride. At Open Market, he had the opportunity and privilege of learning how to scale and build a valuable company in a very rapid timeframe.

But success came with internal challenges. Jeff experienced firsthand the classic tension between founders and professional CEOs. The CEO they had hired just before the IPO built a professional management team, revamped the team, and took the company public.

Jeff found himself mediating high-stakes disagreements in boardrooms in a rapidly changing market environment (building companies in the early days of the Internet was the Wild West).

Those experiences taught him that adaptability, persuasion, and teamwork were as critical as scaling technology.

By late 1999 and early 2000, Open Market achieved a $2.5B market cap and remained a crucial player in the Internet 1.0 infrastructure space.

Founding Upromise and Surviving the Dot-Com Crash

In early 2000, Jeff co-founded Upromise with marketing veteran Michael Bronner. David Fialkow, the founder of General Catalyst, introduced Jeff to Michael, who had founded Bronner Slosberg. The company was later renamed Bronnercomm and eventually became Digitas upon its IPO.

Jeff and Michael had the vision to help families save for college through a loyalty rewards system tied to everyday spending. They wanted to combine loyalty marketing – Michael’s expertise – with the internet and leverage Jeff’s skills with internet commerce.

The money families saved would go into a tax-free 529 account, which the Bush administration had just created. The duo raised their first round of financing–$34M at a $114M valuation just before the dot-com crash in March 2000.

Jeff considers it an extraordinary first round for a handful of founding team members and roughly 20 PowerPoint slides. The company was pre-revenue, pre-product, and pre-partners. As markets collapsed, the company doubled down, raising an additional $55M in October 2000 to fuel its hyper-growth.

Using a total capital of $90M, Jeff and Michael hunkered down and built a valuable business, which survived the crash. They endured pivots, layoffs, reconfigured their strategy, and brought in new team members, including a professional CEO. The company also went through cultural changes.

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Jeff credits the company’s survival to staying laser-focused on its mission: helping families save for education. They also remained committed to efficiency in operations and marketing. That resilience paid off when Sallie Mae acquired Upromise for $300M.

Jeff underscores that one cannot control external markets or the fundraising market. But founders can be excellent at what they do. They can build an outstanding product that solves a critical problem people care about. A good business will survive.

From Entrepreneur to Investor: Launching Flybridge

Shortly before the Sallie Mae acquisition, Jeff left Upromise to join forces with Chip Hazard and, later, David Aronoff, both former partners at Greylock in Boston. Together, they launched Flybridge Capital in Boston. It was another founding moment, this time on the other side of the table.

More than 20 years later, Flybridge has invested in over 300 companies, managed over $1B in assets, and played a foundational role in backing firms like MongoDB and Codecademy. Looking back at his journey as a venture capitalist, starting his fund, Jeff stresses important inflection points.

He talks about the partners working closely together to figure out their strategy in a rapidly evolving market. 23 years down the line, Chip and Jeff are still managing partners at the firm, with David having retired and now serving as partner emeritus.

Shifting gears and moving to the other side of the table while building and scaling another company was an incredible experience, as Jeff remembers. By this time, he had gone through the life cycles of two companies with ups and downs, acquisitions, M&A, IPO, and economic cycles.

Talking about his decision to become a venture capitalist, Jeff felt he had something to offer entrepreneurs. He wanted to coach them and help them avoid the mistakes he had made as a founder along the way.

Further, he had the opportunity to partner with two friends whom he highly respected. Currently, Flybridge Capital has raised seven seed funds and two opportunity funds.

Pattern Recognition and the DNA of Great Startups

Jeff was asked–what do successful startups like MongoDB, BitSight, and FalconX have in common? What’s the pattern recognition when it comes to being on the investment side?

According to Jeffrey, it boils down to three elements: a world-class team, a massive and expanding market, and a touch of luck. He talks about having the privilege of investing in the incredible team of MongoDB, whose founders had previously built DoubleClick.

DoubleClick was a Greylock-backed company in the advertising space, one of the OG internet companies in the New York tech scene that had been successful, gone public, and had been acquired by Google.

MongoDB’s team built an excellent, resilient, and valuable company, endeavoring to pursue the very dynamic database market. At the time, Flybridge had estimated that the database market was possibly an $8B market. MongoDB was taking on giants like Oracle, IBM, and Microsoft.

Flybridge recognized that a platform shift was underway, transitioning into the entire NoSQL world, driven by the internet application era and the cloud era. A great technical team could hit that market window, and MongoDB delivered on their expectations.

The product delivered immediate value. It was distributed virally among engineers and captured demand from the bottom up, rather than top down. It was open-source and downloadable with a developer-driven adoption model.

Jeff recalls how individual developers at Goldman Sachs IT downloaded and integrated it into their applications. A year or two later, Goldman Sachs contacted MongoDB, stating that it had their application running in its environment in 20 to 30 locations. The company needed a partnership with MongoDB.

The folks at Flybridge had estimated the market was $8B, but it became $40B to $50B when data exploded. MongoDB had great tailwinds, excellent execution, a very good technical product, and a novel distribution strategy at that time. Today, it is called product-led growth or PLG.

MongoDB has had three CEOs over its lifetime, has gone public, and is now worth somewhere between $15B and $20B. Jeff notes that it is one of the most important anchor pillars of the New York tech scene in today’s era.

MongoDB proved for the first time, in a long time, to critics that you could build a real, native New York enterprise software company.

Writing for Founders—and the Joiners Who Build With Them

Jeff has built a reputation as a thoughtful educator and author. His first book, Mastering the VC Game (2011), distills lessons for founders on how to align with venture capitalists and treat fundraising like a sales process.

In the book, Jeff advises founders to have a pipeline, a value proposition, and compelling reasons to continue along each stage in the process. At the same time, they must ensure alignment throughout the journey, which is the essence of mastering the venture capital (VC) game.

Jeff’s second book, Entering Startupland, empowers would-be early employees—“the joiners”—to find their place in the startup ecosystem. As he sees it, founders are the mad magicians that everybody puts on a pedestal.

But behind every single or two or three founders, there are employees number four to 400–the joiners who helped build the company and create enduring value. Jeff’s book is dedicated to individuals who aspire to enter the startup ecosystem.

They may not have a brilliant idea or may not self-identify as a founder, and the book is intended to provide them with a roadmap on how to get in and what to do once they are in.

At Harvard Business School, where he has taught for over 15 years, Jeff regularly mentors students navigating these paths. His book attempts to answer the question many students ask, “How do I break into this startup ecosystem? I have general skills, but I don’t really know how to navigate it.”

The Experimentation Machine: Product-Market Fit in the AI Era

Jeff’s latest book, The Experimentation Machine, is a timely guide for founders building in the age of AI and finding product-market fit. AI is shifting the habits and behaviors of founders.

Jeff wrote the book over the course of 2024, drawing inspiration from his experiences at Flybridge, an AI-focused seed-stage venture capital fund that invests in startups out of Boston and New York.

Working with students at Harvard, Jeff observed how tech entrepreneurs and AI-first founders leverage modern AI tools to accelerate their work. That’s the essence of the book’s message.

Jeff realized, “The 10X founder of the future is one who uses AI to supercharge timeless startup techniques and principles like customer discovery, MVPs, and rapid experimentation.” Founders are using AI to develop earned insights and secrets and execute novel go-to-market techniques.

The book presents a compelling argument that AI won’t replace founders, but rather, founders who utilize AI will replace those who don’t.

Investors and founders are concerned about the competitive moat, as AI is making it easier to rapidly build application software, resulting in plummeting software development costs.

Application software franchises like Salesforce, Adobe, and Workday are worried about competitors catching up quickly. Jeff opines that there is no longer a single competitive mode.

Instead, it’s about execution and speed. A series of small competitive modes should be established as the startup is executed. And that builds brand, distribution, and a system, which is the competitive mode.

The Three Critical Moats of the Contemporary AI Startup World

Jeff identifies three critical moats in today’s fast-moving AI startup world:

• Proprietary Data – owning a dataset that general models can’t replicate. At Flybridge, they look for startups with the ability to establish some proprietary data that general-purpose models cannot replicate.
• System of Record – building tools that are used daily and deeply embedded. Alternatively, building a platform in the enterprise software space that everyone uses, similar to Spice, one of the companies in Flybridge’s investment portfolio.
• Human-AI Interface – creating interfaces that make complex AI tools intuitive, like ChatGPT did with natural language prompts. The platform manifested incredible AI capabilities in a way that was accessible to humans.

Jeff cites the example of Topline Pro, another company in the Flybridge portfolio. Topline Pro is a platform that helps service professionals, including roofers, plumbers, electricians, and landscapers, with their sales, marketing, and customer service needs.

The company provides powerful, agentic AI capabilities for website building, marketing, sales, and customer service, all of which are seamlessly integrated. These capabilities are accessible to service providers and are growing to serve thousands of customers. Flybridge looks for and invests in ideas like these.

The Science of Startup Valuation

In the book’s appendix, Jeff demystifies the process of startup valuation. His approach is pragmatic:

• Identify milestones that can justify a valuation inflection point over 12 to 24 months. Hitting the inflection point can double or triple the valuation.
  Raise just enough capital (with a buffer) to hit those milestones. That’s the amount of capital you should probably raise in this round, whether it’s the pre-seed or seed round.
• Follow the Rule of 20–aim to sell no more than 20% of your company per round. Modern AI can enable startups to build companies with fewer resources, which is why it is advisable to stretch seed funding as far as possible.
• Benchmark against market norms for round size and stage-appropriate valuations. How much are other people raising, and if they have similar components, such as quality of market, market size, quality of progress, and momentum? Are they first-time or repeat founders?

For example, pre-seed rounds may raise $2M or $3M at $10M to $15M post-money, seed rounds $5M to $6M at $30M to $40M post, and Series A rounds in the $10M to $20M range with $60M to $100M post valuations.

The Shifting Landscape of Venture Capital and the Power of Enduring Partnerships

As the world of venture capital undergoes a fundamental transformation, Jeffrey sees it as a convergence of private equity, entrepreneurship, and venture funding. Or, a third wave redefining the startup ecosystem.

At the heart of this shift are two simultaneous trends that are reshaping how startups are built and financed.

The Seed Strapping Phenomenon

On one hand, launching a startup has never been easier and cheaper. Founders can now build products and reach early traction with unprecedented efficiency.

The rise of AI agents and low-cost software infrastructure means that what once required a team of 10 to 15 people can now be accomplished by a lean team of two or three, supplemented by powerful automation.

As a result, many founders are “seed strapping” by raising a modest $2M to $4M seed round and stretching it further than ever before, often reaching the coveted $1M ARR milestone with minimal burn.

For early-stage investors like Jeffrey’s Flybridge, this creates a new kind of challenge. With startups needing less capital to prove themselves, the window for participation in early rounds has narrowed.

There is more competition for limited cap table space, forcing seed investors to fight harder to secure their spots in promising companies.

The Opposite End of the Spectrum

Meanwhile, on the opposite end of the spectrum, companies aspiring to become enduring, global brands still require substantial capital to scale their operations. The emergence of megafunds from firms like a16z, Lightspeed, and General Catalyst is a response to this need.

These funds are writing massive checks to companies like Anthropic and Perplexity as they aim to build multi-billion-dollar franchises.

The venture ecosystem has thus bifurcated into tight competition for early-stage entries for a smaller pool of cap table room and fierce pursuit of a few clear mega-winners raising pre-IPO and IPO rounds.

Advice to His Younger Self

When reflecting on what advice he would offer his younger self before launching a business, Jeff is unequivocal: choose your partners wisely.

Whether in co-founding a company, selecting investors, or committing to life partners, enduring success hinges on building strong, trusted relationships.

He speaks from experience, having been married for over three decades and in partnership with Chip Hazard, co-founder at Flybridge, for more than 20 years.

For those considering a business partnership, Jeff highlights three non-negotiables:

• Trust and character: Trust is foundational. Partners must believe that each person is acting in the interest of the whole.
• Competence: Beyond trust, competence matters. It’s essential to work with individuals who are not just capable but exceptional at what they do, bringing world-class skills to the table and holding each other to high standards.
• Fun: Jeff emphasizes the importance of enjoying the journey, without which the grind can quickly outweigh the reward.

Final Reflection: Endurance as the Ultimate Edge

Whether founding billion-dollar startups, investing in iconic companies, or mentoring the next generation at Harvard Business School, Jeff Bussgang’s journey underscores a timeless truth.

He says that while market cycles and technologies evolve, enduring value is created through principled execution, strong partnerships, and relentless experimentation.

Listen to the full podcast episode to know more, including:

• Jeff Bussgang’s career spans the full founder-to-investor arc, combining deep technical roots in AI with decades of experience in entrepreneurship and venture capital.
• He emphasizes that startup success relies on execution, adaptability, and enduring through market downturns, not just timing or capital.
• Flybridge Capital, which Jeff co-founded, focuses on early-stage AI startups with moats like proprietary data, systems of record, and intuitive human-AI interfaces.
• Jeff believes modern founders must leverage AI as a force multiplier to experiment faster, discover insights, and extend capital efficiency.
• Pattern recognition in VC boils down to three key factors: world-class teams, huge markets, and a bit of luck.
• His latest book, The Experimentation Machine, reframes product-market fit in the AI age, stressing rapid iteration and defensibility through execution.
• Jeff’s enduring advice to founders: choose partners with integrity, capability, and chemistry—success is a long road best traveled with the right people.

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Keep in mind that storytelling is everything in fundraising. In this regard, for a winning pitch deck to help you here, take a look at the template created by Peter Thiel, Silicon Valley legend (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash. 

Remember to unlock the pitch deck template for free, which founders worldwide are using to raise millions, below.

 

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