Human Side of Venture — Powerful Mental Models/Frameworks in Venture Investing

What is this show about?

It has become easier than ever to start a tech business, no matter how different and unique the founder(s) path and background. Almost every venture investor would tell you that having the right team is the most critical factor in the success of startup — it is the only part of your company that you cannot easily change and it shapes you and your future. This show aims to explore this human side of venture capital through a series of conversations with investors and founders. I will uncover some of the models and frameworks used by both investors and startup founders to assess the human side in venture.

Season 1 episodes

Season 1 takeaways

It's become easier than ever to start a tech business. Nearly every venture investor today would say that having the right team is the most critical factor in the success of startup — it is the only part of your company that you cannot easily change and it fundamentally shapes the company’s DNA. During this series, I held six conversations with thought leaders in the venture capital industry to explore and unpack the human side of the venture capital industry. We uncovered many great insights and frameworks that are beneficial to both investors and startup founders.

Identifying and backing talented founders is what a great venture investor does and, for the first time in history, we are talent more constrained than capital constraint. During my conversations, three main themes have emerged when investigating the human side of venture; (i) focus gives the compounding ability, (ii) trust is the cornerstone of being a great investor; and (iii) growth and learning mindset is paramount to success. We discuss these themes in the following paragraphs.

Great investors and founders are always focused. They build skills and networks that differentiate them and compound the work they do. With focus they develop unique insights and recognize strong patterns and networks on how to be successful; as highlighted by Ken Elefant. They evolve their approach and views from being descriptive to normative. Nevertheless, it's difficult to jump into the venture world and know exactly where you're going to be operating as well as where you should be operating. A great investor is someone who "as quickly as possible recognizes their strengths and can narrow in on utilizing those strengths to invest in companies that can also leverage those strengths"; as M.G. Siegler put it.

“Change happens at the pace of depth of trust”; Jason Green highlighted. A great investor has a deep desire to live by the success of others. He or she is always on the driver seat with founders she backs acting as a coach with deep understanding of the struggle founders go through in their journey; as discussed with Duncan Davidson. This trust enables founders to move quickly with an exceptional velocity; which defines a hustling founder as indicated by Elizabeth Yin. They trust that their investor has their back and thus are willing to move at a faster pace even if it leads to some failures in the journey.

There is almost no other industry exhibiting a faster pace of change than venture. A great investor is constantly learning and growing; they avail from the experience and wisdom from people around them. This is why venture is often referred to as an “apprenticeship business”; as discussed with Leo Polovets. Similarly, the best founders are those who have an inspiring vision with malleable tactics. They are always learning from their customers, investors, other founders and everyone around them.

The venture industry is all about finding outliers backing them in their journey. Nevertheless, being an outlier is a process of focus, building trust and a life-long learning mindset. These themes are equally important for both investors and founders to be successful in their work and make a dent in the world. I hope you enjoy and learn from those conversations as I did.