i've invested for ~20 yrs, met 1000's of founders, seen 1000's of decks, done 100's of deals -- yet it's still humbling how often i'm wrong or uncertain about what's going to happen. like Yogi Berra sez: "It's tough to make predictions... especially about the future". #sigh🤷
i read about a lot of other VCs bragging about their big investing wins (and how they had #CONVICTION about investing early), but i'll be honest it's rare that i'm sure things are going to go great... and again, often that i'm wrong when i feel that way.
now don't get me wrong, i've met some amazing founders and had the good fortune to write a check / not fuck it up, but i've also passed on amazing deals more often than i've said yes -- so i'm painfully aware my hitting % is at best only around .300 (maybe).
but seriously, the more deals i've done, the more i feel like a fucking idiot that i haven't figured out that #PatternRecognition thing everyone else talks about... and in fact as i get older i think i may be getting worse (less technical, more clueless, more out of touch).
at best, i can probably tell "good" from "not-so-good" (and even then i'm wrong sometimes), but i certainly have a tough time with "good" vs. "great", or also "not-so-great" vs. "terrible"... only over time and more exposure can i figure those things out.
i've also seen inexperienced entrepreneurs get a LOT better, and very smart people who i think are amazing still FAIL. so many false positives and false negatives, it's just difficult to "have CONVICTION"... and i'm jealous (or skeptical?) of those who claim to have it.
maybe i'm just a slow learner, or maybe other investors are just a shit ton better... but i guess i wonder if there isn't just a lot of unicorn survivor bias / non-unicorn amnesia by many VCs? sort of like great cornerbacks -- we seem to forget our mistakes quickly.
so at least for me -- with apologies to malcolm gladwell -- CONVICTION isn't something that happens in the blink of an eye. sure, i can make quick decisions, but they're just as likely to be wrong as right (more likely wrong, actually).
at same time, it doesn't mean that my decisions get any better just bcz i do more "due diligence", or bcz i talk to lots of other smart VCs & get their opinions -- more chimpanzees typing on keyboards doesn't improve the quality of the novel. (we are all idiots, just diff levels)
anyway i don't know what lessons i take away from all of this except that i think "investing with conviction" is a bit of a myth. some of us are smart, some of us are lucky, some of us get both, and some of us get both more than once. and maybe i'm just fucking clueless.
but the lessons i take from 1000's of deals over the past 20 years is just this:
- the more swings i take
- the more shots i make
- the more likely i hit a home run or score a goal.
it's not some great mystery or even much practiced craft. it's just gradual and quantitative.
- the more swings i take
- the more shots i make
- the more likely i hit a home run or score a goal.
it's not some great mystery or even much practiced craft. it's just gradual and quantitative.
you want to place all $100 on one spin of the roulette wheel because you have conviction?
hey buddy, go for it -- to each their own.
for me, i'd rather bet $1 on 100 bright-eyed entrepreneurs, and feel like i'm lucky as pie when 2 or 3 of them make it big. YMMV. /end
hey buddy, go for it -- to each their own.
for me, i'd rather bet $1 on 100 bright-eyed entrepreneurs, and feel like i'm lucky as pie when 2 or 3 of them make it big. YMMV. /end
sorry, one caveat -- most of this thread was about doing very early-stage / first-check investing, not so much about later-stage investing (where there is often more traction / customer data to look at)
