Thread by @dunkhippo33

Tonight's thread is about what it's like to be a fund manager. I think the best analog is actually a sports coach.

Which seems like a weird analogy, right? 🤯

But here's why >>

1) If you're a basketball coach, your goal is win championships with the best team. There are many strategies to assembling the best team. In doing so, you need to recruit. Sell players on working with you. And collectively win.

2) As a coach, you aren't playing the game. You don't get to control the court. Your players do. Your players get the glory if they win.

At the same time, you don't beat yourself up if one of your players had an off day.

Pros and cons to playing vs coaching.

3) You make the most $$ if you are a great player. And even very good money if you are a good player.

But, you have to be one of the best coaches to really make $$ as a coach.

The $$ is with the players. Not the coaches.

The same applies to VC.

4) To be a coach, you don't even need to have played the game. There are great coaches who have never played. And there are horrible coaches who were star players.

Playing is different from coaching.

But, it helps to understand how hard the game is from having been there.

5) Portfolio construction is how you win championships. There are many different strategies that can win.

You have to run the strategy that works best for the team you've assembled.

There's no one strategy that works. And even a winning strategy won't work for all teams.

6) In bball, ppl know a team doesn't need 8 pt guards.

If I'm a pt guard, I know I'm not going to be recruited by a team w too many pt guards.

Most startups, though, don't realize the same applies to funds.

Funds have to assemble teams. Not pick individual players.

7) Some teams pick a couple of hot shot players & pay up for them. But they need those hot shots to really return big.

Other teams have the opposite strategy. Pick unknown, undervalued players & let them become stars.

The same strategies show up in venture.

8) Coaching helps players become better, but ultimately greatness comes from within individual players.

You don't know who will end up leveling up.

Just because a player did well in HS, doesn't mean they'll do well in college. And unknown players will often surprise you.

9) In coaching, feedback is more of an art than a science.

You have to keep morale high amongst your players, especially when ppl are having a bad day (wk/month/year).

Sometimes, you need to push players to be better. Sometimes you need to back off.

10) Coaching is a ppl game - you need to understand what makes each of your players tick. If you don't like working with ppl, coaching/being a VC isn't the right occupation.

11) You are always selling your team to recruits. It's a sales game. You gotta love sales. If you don't, this is not the right game.

The best recruits - even the overlooked - know they have a lot of options. So why should they play on your team?

12) As a new coach, you don't have track record, brand, or budget. So, it's harder to win.

You win it by being on the court w your players when they are out there. Regardless of the hour. You have to show up at their house to win contracts sometimes.

13) As a new coach, you don't have much to show for yourself except your own hustle.

As you build these things, then eventually you can hire a staff. And you can build more processes to review more player tapes from more recruits and built a better team over time.

14) As a coach, you TOO have to practice.

You have to watch tapes of your players (& others you missed). You have to track data. You have to understand how to recruit and pick better, what to look for in recruits, and how to coach better.

That's the only way to get better.

15) Lastly, people don't go into coaching for the glory. They do it because they love working with ppl. They love seeing their players get better and go on to do amazing things either now or beyond the sport. They love winning games as a team.

Coaching / VC is about team.