Articles like these both reflect and perpetuate this problem. I'd don't like the idea of blaming successful people for the opportunities that they declined on principle - I'd rather look at the ones they chose to focus on, and see whether those were well-executed.
But furthermore, I'd rather have the decision to fund actually mean something more than "This is just barely convincing enough that there's a slight chance I might look like an idiot if I don't throw a bit of money at it'.
I'm painting a picture of extremes, but you get the idea. Fine, a16z made X on this investment when they could have made Y, where Y > X. But look at X itself - is that a respectable rate of return? And if not, do they make up for it by getting good returns on the other investments that they've also invested money (and time!) into?
The VC game is about identifying enough companies - not all companies - that will be successful. Errors of the first kind and errors of the second kind are not equally noteworthy, and it seems we're focusing too much on the wrong one. There are valid reasons for turning down a company even if you think it may be successful - if you feel that your limited time/money/effort will be more valuable other companies.
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Articles like these both reflect and perpetuate this problem. I'd don't like the idea of blaming successful people for the opportunities that they declined on principle - I'd rather look at the ones they chose to focus on, and see whether those were well-executed.
But furthermore, I'd rather have the decision to fund actually mean something more than "This is just barely convincing enough that there's a slight chance I might look like an idiot if I don't throw a bit of money at it'.
I'm painting a picture of extremes, but you get the idea. Fine, a16z made X on this investment when they could have made Y, where Y > X. But look at X itself - is that a respectable rate of return? And if not, do they make up for it by getting good returns on the other investments that they've also invested money (and time!) into?
The VC game is about identifying enough companies - not all companies - that will be successful. Errors of the first kind and errors of the second kind are not equally noteworthy, and it seems we're focusing too much on the wrong one. There are valid reasons for turning down a company even if you think it may be successful - if you feel that your limited time/money/effort will be more valuable other companies.