Venture investing is hard

Venture investing is incredibly difficult due to low success rates, the need for massive wins, and the emotional toll of constant rejection and company struggles. Despite the challenges, the potential to work with innovative founders and shape the future makes it a rewarding, albeit demanding, career path for those willing to embrace uncertainty.

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VC success hinges on a small percentage of investments generating massive returns (10x+), highlighting the critical need to identify and aggressively back potential winners.

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Pattern recognition in venture investing is crucial but takes significant time and experience; even then, mistakes are common, emphasizing continuous learning and refinement of judgment.

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Venture investing is emotionally taxing due to constant rejection, missed opportunities, and the challenges faced by portfolio companies, requiring a rare balance of optimism and pragmatism.

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We know venture investing is hard. But do we really know how hard?

The venture capital industry is built on a foundation of uncertainty. Every investment decision is made with incomplete information, betting on founders, markets, and technologies that may or may not succeed. The odds are inherently stacked against you.

The Math is Brutal

Out of every 10 investments a VC makes:

5-6 will fail completely
2-3 will return 1-2x capital (barely breaking even)
1-2 will need to return 10x+ to make the fund work

This means you need to be right on only 10-20% of your investments to succeed. But here’s the catch: you need to be spectacularly right on those winners.

Pattern Recognition Takes Time

The best investors have seen thousands of pitches, backed hundreds of companies, and experienced dozens of cycles. They’ve developed an intuition that’s impossible to codify.

But even with decades of experience, the best investors still get it wrong more often than they get it right. The difference is they know which bets to make bigger.

The Psychological Toll

Venture investing is emotionally draining:

You say no 99% of the time
You watch your winners raise at higher valuations without you
You sit through down rounds and wind-downs
You deal with founder conflicts, pivots, and existential crises

The job requires eternal optimism combined with ruthless pragmatism. It’s a rare combination.

Why Do It?

Despite all this, venture investing remains one of the most intellectually stimulating and impactful careers. You get to:

Work with brilliant founders building the future
Learn about emerging technologies and markets
Help companies scale from 0 to millions of users
Occasionally hit a home run that changes everything

The hardness is the point. If it were easy, everyone would do it. The difficulty creates the opportunity.

Final Thoughts

Venture investing is hard because the future is fundamentally unpredictable. No amount of analysis, pattern recognition, or experience can eliminate the uncertainty.

The best you can do is:

Build strong relationships with exceptional founders
Develop deep domain expertise
Make decisions quickly with incomplete information
Support your companies through thick and thin
Play the long game

If you’re thinking about becoming a VC, go in with eyes wide open. It’s a privilege to have this job, but it’s not for the faint of heart.