VCs ‘Anti-Portfolio’ Lists Are Mostly Performative BS
“Ha you proved me wrong. I was too bone-headed to see it. Should have invested. Congrats!” That’s the tweet sent by the venture capitalist after a big IPO by a startup they decided not to back years earlier. Maybe there’ll even be a screencap of their pass email, or similar ‘proof’ that they were in conversation with the founders during their fundraises. Then you talk to said founders and they’re like, yeah, we never really engaged with that firm and probably wouldn’t have taken their money anyway given the options we had. The tweet is VC version of You can’t break up with me because I’m breaking up with you!
The venture investment process can be over-simplified to See, Pick, Win.
See the highest quality opportunities, the most interesting founders, the hottest financings
Pick the ones that you believe are the best of the best by whatever process you employ
Win the opportunity to give those founders your money in hopes of getting lots back at a later date
When a startup succeeds the investor winners generally take their victory lap (me and Satya included — we’re not holier than thou!). But what if you weren’t winner? Well, next best thing is to signal that you did *see* the deal, even if you didn’t *pick* it. It’s a subtle way to reassert control and narrative, vs just staying quiet, or congratulating the founders privately. Tell me the last time an investor publicly shared a loss or miss? Oh wait, I did. (Maybe I *am* holier than thou😈) No one wants to be outside of the loop, to have not even seen [fill in the blank] startup is worse than having passed on them.
For those who’ve been around a while, it’s fair to read this post and assume I’m slagging on Bessemer Venture Partners, as far as I can tell the originator of the public anti-portfolio concept. But I’m not! Like many things, the original intention was pure and introspective. A way to share some degree of humility in a business that may not typically reward this trait. Bessemer, keep doing your thing!
But everyone who isn’t BVP should find a different way to retroactively ‘think in public’ that adds some value to the community at large.
Want to talk about an investment pass you regret? Talk about what blindspots your firm had in their ‘pattern recognition’ and how the partnership worked to correct.
Realize you had an unanswered seed fundraise cold email from a now decacorn sitting in your email archives? Question more generally whether requiring a warm introduction is the alpha-collecting strategy or a relic of past GPs.
The way we get better as investors — and help founders succeed — is by challenging our own histories, not just faux-celebrating them.