Conviction Over Volume

I’ve written about the importance of follow-ons and the information asymmetry that comes with being an active investor. The asset class produces terrible risk/return results without it and newer Investors don’t understand this because the most recent super cycle propped up otherwise terrible returns.

More investments = Chasing Beta. And the Beta of the asset class isn’t good. Looking at successful “spray and pray” Investors is a survivorship bias lens that’s plain silly.

The only reason to invest capital in venture backed startups is if you think you can produce right-hand tail outcomes.

Initial investment conviction and concentration of assets once winners start to emerge is the key to driving top decile returns.

And the “more is better” theory is erroneously ascribing an uncapped right hand tail for all investments and this is sloppy and provably false.

You might as well play lottery tickets or 33X levered options on penny stocks if you want “more”.