You're Only as Good as Your Most Recent Deal

Keep moving forward or you'll be left behind.

It’s a maxim in our VC industry, “You're only as good as your most recent deal.” The recognition and success achieved from a recent deal are certainly short-lived.

Especially at the general partner level, when a venture exits, it’s an occasion for celebration. However, the glitter of those exits tends to dull over time, especially if it’s through an acquisition. The startup, once a unique entity, becomes a smaller part of the larger acquiring corporation, and over time its identity often fades. (This scenario further unfolds if the acquirer itself gets absorbed by a larger entity down the line.) Technology at core of the original investment also becomes outdated, making the once notable investment less relevant in contemporary discussions. Who cares about a successful investment from a decade ago when the tech isn’t relevant to today’s discussion or the name of the product+company has disappeared from memory?

Fresh investments, too, come with their own fleeting moments of glory. The initial euphoria that accompanies a new investment soon encounters harsh reality. The promise of what could be is initially quite pronounced, but that aura quickly fades as the reality (and challenges!) of building a startup confront even in best of companies. And that’s nothing to say about those lemons which ripen first!

Exceptional rising star companies can also provide some additional halo to VC’s careers even before an eventual exit event. These unicorns and those-in-the-making demonstrating a steep growth trajectory can generate a sustained level of excitement, often more enduring than the actual fleeting joy post-exit. The potential of what might becoming often holds more interest than the reflection on what has just been.

This same storyline also extends to non-partner investment professionals. Being part of a team that nurtures a new investment through to completion or is involved with a portfolio company which exists is a rewarding experience. However, the recognition from such achievements also has its lifespan internally within a firm. Success has many parents, and the senior investors collect disproportional credit.

The takeaway from this cyclical narrative is not to undermine the importance of celebrating wins. It’s crucial, it’s motivating. However, it’s equally important not rest on past laurels. Being a great investor isn’t just about making good decisions occasionally… it’s about being consistently good. Every new deal is a clean slate, an opportunity to prove oneself yet again: to learn, to grow, and to strive for a subsequent success. The journey of a venture capitalist is a marathon of resilience, with each deal being a mile-marker, not a finish line.