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Venture Investments Are Not Bets
2 min read

Venture Investments Are Not Bets

Venture Investments Are Not Bets

Countless times over the last decade, I’ve heard other venture investors refer to their investments as “bets.” Earlier in my venture career, I was absolutely guilty of this because I wasn’t being mindful and probably lacked some necessary empathy. At the time, I don’t think I truly appreciated what it meant and took to be an active investor and support a company over the long haul. A few years ago after a conversation with my wife, I began to question that vernacular.

Regarding an investment as a bet certainly makes sense on the surface. According to Merriam-Webster, a bet is, “something that is laid, staked, or pledged typically between two parties on the outcome of a contest or a contingent issue.” The more I thought about labeling venture investments this way, the more I began to realize it was a bit lazy, potentially insensitive and didn’t necessarily align with my values. Simply put, this label didn’t feel right to me.

In my role as a venture investor, I don’t make bets. Bets tend to be passive unless you’re playing the hand. When I put a friendly wager on a game such as the Super Bowl, my involvement has zero bearing on the outcome. My job as a venture investor is to actively partner with and serve founders. There is nothing passive about this. Professional venture investing shouldn’t be confused with gambling even though a lot luck and a little bit of skill are required for success. Essentially, betting implies gambling and investing implies taking calculated risks.

After a founder has trusted me to serve his or her company and the investment closes, I do not passively wait for and expect a positive outcome. This is when the real work begins. Every company regardless of the stage requires a shit ton of patience, support and effort by everyone around the table. I felt characterizing an investment as a bet mentally excused me, the investor, from the real work ahead.

Here’s what I’d like to know from the venture community: What do you mean when you call it a bet? Are you impatiently waiting on the sidelines to see if you beat the odds? Or have you simply adopted the vernacular since many of our peers have? That’s where I found myself earlier in my career.

We, myself included, should never view our work as gambling given how much time, effort and energy goes into building companies and long-lasting relationships with founders. Instead, we should characterize our work as investing, partnering, supporting and serving. Founders put everything they have on the line — years of their life, physical and mental health, financial security, and family and friends— to bring their vision to reality. These are enormous and important sacrifices which is why I believe referring to an investment as a bet doesn’t reflect what we do.

(A special thanks to Alice Lloyd George and Jerry Neumann for reading an early draft)

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