Pushing uphill🫷🏼

Short reflections on venture

I just returned to London after four years in Amsterdam of which three years were spent investing in seed to series B across Europe. I joined venture at the peak of the market in 2021. It was web3 and the metaverse mania. Questionable companies SPAC'd even if the unit economics didn't smack (just needed something to rhyme). It was wild. Then sustainability companies became hot, fintech fell off a cliff, energy became cool, defence tech even cooler, AI the coolest.

QED's Frank Rotman said on a podcast that "venture investing is easy to do poorly and difficult to do well." I would be lying if I said I wasn't guilty of some of the below at some point in time. Nonetheless, the quote always stuck with me.

A few reflections:

  1. Putting in the work matters and not enough investors do
  2. You are paid for decision-making. Not for content, showing up on panels, attending conferences
  3. Junior investors are incentivised to do as many deals as possible which skews #2
  4. Experience inflation is acute on both sides of the table
  5. Most conferences are a waste of time but have their place in network building
  6. Allocating good money after bad money happens often; follow-on capital is rarely assessed like a new investment
  7. Fund automation is anaemic; automate where possible
  8. The investor's money might be their only value-add and that's OK; the sooner the investor and founder(s) come to terms with this, the better
  9. Most investors choose to sh*t on other investors when competing rather than focus on their merits
  10. Empathy for founders is critical; founders take single-asset risk, VCs take multi-asset risk
  11. Just because the work is transactional, it doesn’t mean the job is
  12. A strong NPS amongst founders and investors goes a long way
  13. Strong deal flow really is a firm's elixir but liquidity will decide whether you survive endure as a firm in the long run
  14. It's a really easy job to do badly

The above isn't meant to be negative, just some honest reflections on the job, which is a terrific one and a great industry to be in.