That negative feeling will creep into your brain, but don't let it find a home.
Venture capital is a fascinating field that can initially present itself as an ideal career path. The excitement of meeting innovative entrepreneurs, discussing strategic ideas in a variety of domains, and attending industry (social!) events makes every day a new adventure, particularly for those early in their career. Not to mention, there is the alluring promise of riches down the road. It's easy to see why many regard it as a highly coveted job.
As time progresses in a VC career, however, the initial enthusiasm may begin to wane. The daily routine of evaluating similar pitches, conducting diligence, receiving less than stellar news from portfolio companies, and making tough decisions on potential investments can become somewhat monotonous. The repetitive nature of these tasks can make VC seem less vibrant and interesting than it once was.
I find that the most challenging aspect of this VC job is living with the constant ups and downs of portfolio companies. The journey of a startup is hardly ever smooth; even the best-laid plans by the most exceptional founders go awry. The venture capital model by definition states that a significant portion of investments will not result in positive returns, with only a few standing out as exceptionally successful ventures. Spend enough years in the VC role and you’ll realize that bad news comes much more frequently than the good. This reality, while understood intellectually and conceptually, can be so difficult to grapple with emotionally. The day to day grind working with portfolio startups’ challenges can slowly erode the positive attitude present at the beginning of your investor career.
This difficulty is exacerbated when startups that you passed on go on to achieve remarkable success. It prompts a series of what-ifs — “What if we had taken a chance on that founder who pitched in our conference room? What if we believed in her? What if we better understood the product vision? What if we did not doubt the market sizing and potential?” Or sometimes the reason for passing was worse… you just weren’t willing to pay a high enough price.
All of the scenarios mentioned above can gradually lead to a sense of cynicism. It's easy to start seeing the obstacles rather than the potential in new ventures. Cynicism, essentially being a form of distrust in the process, can hinder one's ability to spot opportunities, making one more focused on challenges rather than solutions.
While it's prudent to be skeptical in accepting claims only once they've been critically and fully evaluated, I believe that there is a distinction between that mindset and succumbing to a cynical sense of the perpetual possibility of defeat. Skepticism encourages a rational approach, requiring evidence before full acceptance and confidence. Whereas cynicism leads to a rigid, overshadowing negative attitude.
The essence of venture capital lies in optimism: the belief in a brighter future enabled by technological advancements. Our role over the arc of a career is to modestly contribute to the success stories of a select few companies that manage to make a significant impact. Although this overall path inevitably entails numerous setbacks, these are part and parcel of the promise of substantial rewards both intrinsic and material.
But we are - or at least I am - in this profession because I want to believe. I am an optimist. I do believe that technology has and will continue to make a better future. And I accept the many disappointments in the interim associated with this privileged role as the ante for being involved as a small part of a few companies that are truly great.
Yes, being a VC can often feel like you’ve been transplanted into Bill Murray’s role in the movie Groundhog Day. Waking up each day to relive it as the same one as the prior one, experiencing a monotonous stream of similar difficulties. But just as his character finds a way to break that monotonous cycle by embracing change through learning, we too can find fresh perspectives in our daily venture routines. And at the core of our job is to value every entrepreneur we meet who presents a unique narrative, who has the potential to change the recurring storyline and become the foundation for a career-defining investment.
Think, you could meet that exceptional founder tomorrow.
But you might not see the true opportunity if you’re already negatively anticipating more of the same.
Especially in this challenging environment, it's essential to uphold an ethos of positivity, stifling the clutches of cynicism, so that you don’t overlook that exceptional but rare opportunity when it’s right in front of you. Your career depends on it.