The Death of a Venture Fund

So if not for the structure, what caused venture’s shift towards such risk-averse investing? As fund sizes grew dramatically and a tech boom spurred a startup surge, the industry's emphasis shifted from discerning selection towards a more diversified 'spray and pray' approach, diluting the value of traditional tasteful investing. When the game of b... See more

Funds taking a more concentrated approach and investing in fewer companies most likely are assuming that one of their investments has an extremely large outcome while the rest either go to zero or whose exits are much more modest. This is called the power law dynamic and historically, this can be seen happening often in venture capital. Funds takin... See more

In the 1980s, a venture capitalist could truthfully say their investment was the difference between life or death for an important, generational technology company. Funding such companies, in this way, was absolutely a good quest. But today there are more people "helping the builders" than actually building, fighting one another in a zero-sum game

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The mistake is thinking your startup idea is venture-scale and getting on the VC treadmill. Once you’re on the treadmill, here’s what changes:

1. High growth expectations: VCs are looking for companies that grow big enough fast enough. If your business isn’t suited to this kind of rapid growth, it can lead to undue pressure and unrealistic expectation

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Venture capital should come with a warning label. In our experience, VC kills more startups than slow customer adoption, technical debt and co-founder infighting — combined. VC should be a catalyst for growing companies, but, more commonly, it’s a toxic substance that destroys them. VC often compels companies to prematurely scale, which is typicall

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Today, we are in a crisis. Silicon Valley's best — our top operators, exited founders, and most powerful investors — are almost all on  bad quests.  Exiting your first startup only to enter venture capital and fight your peers for allocation in a hot deal is a bad quest. Armchair philosophizing on Twitter is a bad quest. Ya

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Venture capital will seed companies that make efficient and novel use of people’s posthumous data. Just as lifestyle product development reached its zenith in the vast proliferation of colorfully branded DTC companies, we’ll soon see an outcropping of companies embedding value back into the death condition: Boutique hardware-accessory production fi... See more

People act like having a startup fail is the worst thing that can happen to you. And man, that's not even in the top 10. It's bad, I've done it, it's awful. It's really bad, but far worse is to be in a company that won't die, a zombie, undead company that you hate, but you can't leave. Oof, have I met people like that, and we're having a mental hea... See more