The failure of due diligence (in Fintech)

For as long as there has been business, there has been fraud, and ‘cooking the books’ is about as old as it gets. In recent years, the extreme focus on revenue has produced dangerous incentives for founders and investors to cut corners. Those chickens are now coming home to roost. Now a regular feature in tech… Continue reading The failure of due diligence (in Fintech)

Adverse selection and venture capital

There’s a weird phenomenon among VCs where the less successful they are, the more evil they become to founders to squeeze more money out of their best startups out of necessity which then becomes a vicious cycle of adverse selection. Garry Tan, President & CEO of Y Combinator Including the above, criticism of venture capital… Continue reading Adverse selection and venture capital

Larian’s unfair advantage

This post was inspired by two things I saw recently: The connection between these two items is not obvious, but it is interesting. The lemon problem WeFunder, for the uninitiated, is a crowdfunding platform for (primarily) technology companies. It allows community-oriented startups to sell a small % of ownership to their users and supporters. Unfortunately,… Continue reading Larian’s unfair advantage

It’s all about identifying outliers

What startup investors can learn from sports betting Early stage investing is a complex and relatively new practice, which makes it fertile ground for analogies which can help explain the more abstract concepts to both newcomers and veterans alike.  In this particular case, grappling with the intrinsic value of pre-revenue startups, there’s an interesting parallel… Continue reading It’s all about identifying outliers

Startups are the clients of Venture Capital

As a founder learning the ropes of venture capital, you might see VCs as asset managers, with LPs as their customers and your equity as the asset being managed. This is heavily implied by the chain of responsibility: you are required to report your progress to your VC investors who want to see milestones crossed… Continue reading Startups are the clients of Venture Capital

LPs should encourage VC evolution

In a previous article I wrote about the threat of consensus in venture capital. A few days later, Eric Tarczynski shared a fascinating thread about the journey with Contrary, his VC firm. He addressed this point about consensus with admirable candour, summarised here in two points: It’s unusual to get such an unvarnished look at… Continue reading LPs should encourage VC evolution

AI as a Utility

Investors don’t really need to invest in net new companies to get exposure to AI’s potential halo effect; If all your portfolio companies start to integrate with the right existing tools on the market, they could bloom too. It’s the promise of horizontal tech. Natasha Mascarenhas, TechCrunch In a previous post I used the games… Continue reading AI as a Utility

Why venture capital should be consensus-averse

In The General Theory of Employment, Interest and Money, Keynes wrote about investment through the metaphor of a newspaper contest to select the six best looking people from a group of photos, with the prize being awarded to the contestant whose choice most closely corresponded to the average of all contestants. Keynes’ point was that,… Continue reading Why venture capital should be consensus-averse

The Negligible Cultural Impact of AI

Good art (including novels, games, movies) is defined by the humanity involved. Emotion, humour, tension. Even when AI attempts to mimic those attributes, we’ll still prefer human experiences over synthetic ones. We’re inclined to believe each new innovation is the ‘best’, and that the technology-driven approach is always superior. To overlook almost anything in pursuit… Continue reading The Negligible Cultural Impact of AI