Venture Capital: Preparing for Failure.

Statistically, startups mostly fail. We love to think of ourselves as great investors. But Venture Capital fundamentals still didn’t change: Fund returns are driven by outliers, and returns are concentrated in few firms.

All VCs are constantly evolving and refining their thinking, processes, conviction. That’s why we write long investment memos: Not because be need that much information to convince the IC or ourselves, but so that we can go back in five or six years and read about what we were thinking.

However, there is also a meta-level that we often forget. Common wisdom has it that we need to create an environment for ourselves so that we can act on lucky breaks and take advantage of luck. Being at the right time at the right place is actually not enough. Cataclysmic events are an opportunity for inflection of how to become better:

  • What values drive your actions?
  • Who has qualities that align with yours?
  • What makes you feel that you’re performing at your best?
  • How do you want to live your life?

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