Why Venture Capital Investors Are Usually Wrong About Startups
And the intangibles that will get you on the right side
If an investor has passed on investing in your startup, it’s probably for one of these reasons:
- Your startup isn’t investable.
- Your business doesn’t fit their investment thesis.
- There’s only so much room in their portfolio.
But often, the reasons they pass are less clear. And sometimes, they’re making a mistake.
Let’s take a look at where Venture Capital investors sometimes get it wrong.
Why investors make mistakes
According to basic VC math, investors have about a 1 in 10 success rate.
They make mistakes. They dump millions of dollars into companies that don’t make money, and in some cases never will never be profitable. They pass on early opportunities to invest in the next Google, Amazon, or Facebook. They sign up for one thing, then immediately expect another.
Investors aren’t stupid. Despite what reality television might lead you to believe, it’s hard to be stupid and get rich. It’s even harder to be stupid and remain rich.
