venturecapital

Rant of the Month:

It’s fascinating to me that as early stage investors we care so much about the founder, and yet founder diligence methods are primitive. 

At the same time, we run all sorts of models to try and anticipate growth scenarios, despite the fact we know it’s impossible to predict.

1/2

Building something new. Host: /venturecapital /adventures /theitinerant

But it seems like we’ve boxed ourselves in as an industry.

Maybe it's time for a change?

🤷

3/3

I get why we do it: the goal is to reduce risk and frankly, instill confidence in our LPs that we know what we’re doing.

I also understand how we arrived at where we are today and I have full respect for the many pioneers who are infinitely more intelligent than I am.

2/3

That's fair. I agree, it “works” in the similar sense that calculating a DCF with pen and paper v excel would work.

Referencing the founder works pretty well imo

Part of the model though is that VC is glorified gambling. People might want to say otherwise, but to some extent it could be considered a numbers game, so there is incentive to give room for leeway. 

There is precedent for founders to have wonky pasts and succeed exceeding.