Great post! I couldn't agree more. I was a book editor for a while a well know publishing company and to be honest the perspectives are fairly similar. Publishing is a hard business. Less than 2% of all books ever return on their investment. When you consider in 2008 alone 285,000 new titles were published in the U.S. alone likelihood that your book will make money is slim. There for as an editor you have to be incredibly tough. For a book to even pass my desk in the first place it had to be submitted by an agent, which means it had to got through three rounds of vetting before reaching me. When it hit my desk it had to meet stringent criteria including an author with a background, a great piece of writing and something instantly saleable (i.e. can you sum it up in a sentence). People view VC (and Editors) as negative people trying to bring them down. In truth we're people with real insight in a tough market. You're judging based on that.
Kevin Vogelsang
· 1 month ago
"Deep Conviction" That's key for the entrepreneurs and investors. There's an art and great skill involved in what the early stage community does. Deep Conviction is absolutely necessary for greatness. And becomingly deeply convicted is a skill in itself. To some degree, the process is self-fulfilling. For a founder, it's easy to say, "I'll commit to this when x happens." What needs to happens is, "I'm going to commit and I'll make X happen."
By the way, I vote for COSI in Kendall for those office hours. Andala already has OpenCoffee.
robchogo
· 1 month ago
Why not double down on Andala then?
Thanks for the comment. What goes without saying is that the conviction of an entrepreneur is much greater than an investor since they don't have a portfolio and usually invest a meaningful % of their life savings into a venture.
min viable
· 1 month ago
Appreciate your take on VC investor mindset--
May I please clarify the following (which I hope is not unduly pedantic): does "mojo" [ http://www.merriam-webster.com/dictionary/mojo ] fully capture the dynamic you describe here? The term seems to account inadequately for the VC's ability to impact operations post-investment, at a reasonably early stage of the company's development.
For example, Roger Ehrenberg noted that the participation of so-called "Super Angels" introduces "the skills and contacts to make a success a self-fulfilling prophecy by getting involved" [ http://www.informationarbitrage.com/2008/04/sup... ]. Presumably, VCs can apply similar, if not superior, assets.
I would respectfully propose "moxie"--energy, determination, know-how [ http://www.merriam-webster.com/dictionary/moxie ]--instead; of which "mojo," as a measure of preternatural personal confidence in a course of action that does not make sense to many observers, would be a notable subset.
Does it overstate the VC's role as operating partner to argue that, unlike choices by both retail and most institutional investors from the pool of publicly traded securities, the VC's investment decisions are driven not only by conviction in the companies' capabilities but also by conviction in his ability to augment them with his own skillset? The VC would thus benefit from increased visibility re: what can be achieved by any given company, because of a personal assessment of his own potential contributions to its operations--
Thanks!
robchogo
· 1 month ago
Thanks for the comment. Moxie is possibly a better terms. But I'm really not taking into account the ability of the investor to influence outcomes. I'm speaking more of the conviction, guts, confidence, etc required to make an investment in a world of massive uncertainty.
I would agree with your last statement that VC's do believe in their ability to augment a company with their own skillset. But I would say that most VC's have enough experience and humility to know that their impact is limited relative to the influence of great teams and attractive markets.
min viable
· 1 month ago
Thanks again, that additional color is extremely helpful--in other words, insofar as a VC's abilities are more or less equally applicable across the set of opportunities within his chosen industry (sub)sector/circle of competence, then the act of "pulling the trigger" on one investment rather than another requires a special temperament as much as it does any specific technique--
All Comments
That's key for the entrepreneurs and investors. There's an art and great skill involved in what the early stage community does.
Deep Conviction is absolutely necessary for greatness. And becomingly deeply convicted is a skill in itself.
To some degree, the process is self-fulfilling. For a founder, it's easy to say, "I'll commit to this when x happens." What needs to happens is, "I'm going to commit and I'll make X happen."
By the way, I vote for COSI in Kendall for those office hours. Andala already has OpenCoffee.
Thanks for the comment. What goes without saying is that the conviction of an entrepreneur is much greater than an investor since they don't have a portfolio and usually invest a meaningful % of their life savings into a venture.
May I please clarify the following (which I hope is not unduly pedantic): does "mojo" [ http://www.merriam-webster.com/dictionary/mojo ] fully capture the dynamic you describe here? The term seems to account inadequately for the VC's ability to impact operations post-investment, at a reasonably early stage of the company's development.
For example, Roger Ehrenberg noted that the participation of so-called "Super Angels" introduces "the skills and contacts to make a success a self-fulfilling prophecy by getting involved" [ http://www.informationarbitrage.com/2008/04/sup... ]. Presumably, VCs can apply similar, if not superior, assets.
I would respectfully propose "moxie"--energy, determination, know-how [ http://www.merriam-webster.com/dictionary/moxie ]--instead; of which "mojo," as a measure of preternatural personal confidence in a course of action that does not make sense to many observers, would be a notable subset.
Does it overstate the VC's role as operating partner to argue that, unlike choices by both retail and most institutional investors from the pool of publicly traded securities, the VC's investment decisions are driven not only by conviction in the companies' capabilities but also by conviction in his ability to augment them with his own skillset? The VC would thus benefit from increased visibility re: what can be achieved by any given company, because of a personal assessment of his own potential contributions to its operations--
Thanks!
I would agree with your last statement that VC's do believe in their ability to augment a company with their own skillset. But I would say that most VC's have enough experience and humility to know that their impact is limited relative to the influence of great teams and attractive markets.