The Reverse Effort Paradox

“Venture feels way too much like gambling these days. We all tell ourselves it isn’t, but in this market (and maybe always), it can feel like we’ve wandered into the casino.

I’ve been part of a handful of companies where the effort ran close to a decade or more. Board meetings, late calls and texts, working through the hard stuff alongside founders who gave it absolutely everything. Those ended somewhere between zero and 3x.

And then some of my biggest winners came together over a couple of dinners and a few phone calls. The founders mostly wanted to be left alone to build, and they were right 😉

I’ve started calling this the “reverse effort paradox.” The work matters, I believe that. Some days it just feels like the returns run in the opposite direction.

And the randomness doesn’t care when it shows up in your career. Some investors land a huge winner in their first fund, get called brilliant and raise a much bigger fund off the back of it. Some grind for fifteen years before one hits. Some really thoughtful investors never land one at all, and they did the work just as carefully as anyone with a famous logo on their track record.

Which makes it hard to define what a good investor actually is. LPs, founders and VCs all lean on the scoreboard, and the scoreboard tells us less than we pretend.

Some investors have come to grips with this and play it that way. Write more checks, spend less time on each one, let the power law sort it out. I get the logic. I just can’t bring myself to play it that way.

And yes, I see the irony. We run a diversified seed strategy which is kind of an admission that nobody knows which ones will hit (including me!). Spreading our checks is how you survive the randomness. I still want every one to be a real decision, and I still want to show up for the company that needs me in year ten, whatever the math says that time is worth. If outcomes can’t define a good investor, maybe the inputs are the part I actually control.

Does anyone else feel the reverse effort paradox?”