This question came up in the comments yesterday:
It got me thinking about whether a competitive investment is a better investment.
Most of the time we are in a competitive process when we consider an investment.
But that is not always the case.
Sometimes, we are the only investor at the table.
That could be because we got there before anyone else.
Or it could be because nobody else wanted to invest.
We have had big wins in all of these scenarios.
I am not big on social proof. I think it is among the dumbest notions in all of investing.
If you can’t figure out why you want to make an investment on your own, you should not be investing.
But it is true that you have to be able to win competitive situations in order to be a top-tier venture investor.
It may, in fact, be the signature trait of a top-tier venture investor.
When I started out in the VC business, I was with a firm that struggled to win competitive deals.
We did not have a brand, we did not have a strong market position.
So when I left and we started Flatiron, I was all about fixing that.
We did that at Flatiron and we did that at USV.
You have to be able to win the deals you want to win and price is not going to do it all by itself.
The market has a way of getting everyone more or less to a clearing price and then the entrepreneur will make her choice.
And in that moment, you have to have something they want.
It could be your brand.
It could be your passion.
It could be your network.
Most likely it is all those things and more.
So being able to ask in and get in is a very big part of succeeding in the venture business.
