Early on in Covid many businesses, of course, worried about the ways that Covid would affect their business. Many made various contingency plans and quite a few adjusted spending (marketing, sales, hiring, etc) in anticipation of Covid’s impact. While in hindsight I think many (in the tech world, I’d probably say most) companies ended up faring better than they expected, some did not and I think even those that ended up being fine were happy that they took the matter seriously and had contingency plans, even if not all of those plans needed to be implemented.

As we begin to come out of Covid there’s another kind of business impact that I think is important to anticipate and plan for. And it’s not something that many people are yet talking about – post-Covid employee churn. Companies talk about customer churn all the time (it’s the Achilles heel of SaaS businesses, for example, but employee churn is also something to pay close attention to and to plan for.

The Covid era has prompted many people to reassess their priorities and, once we’re able to move around a little bit more, I think we’re going to see a number of employees deciding that Covid has caused them to reassess their priorities. I think some number will leave to pursue other ideas and passions. We have a few companies in the Foundry portfolio that are starting to see the beginnings of this, which is why I thought I’d write about it. I don’t think the right response is to convince employees to stay (at least not in every case), but rather am suggesting that companies consider other ways to mitigate the likelihood that voluntary employee churn increases in the coming 12 months, such as by ramping up their recruitment efforts, considering their “work from anywhere” policies (more on that in an upcoming post), and offering some long-standing employees the chance to take an extended break (phased and planned, not reactive and chaotic), etc.

Not every business will see the effects of this, but as in the early days of Covid, it’s worth planning for.

Net Dollar Retention (NDR) and Net Revenue Retention (NRR) are both important measurements in any business but many companies conflate the two or (more frequently) only report on one. Both are key metrics but for different reasons. Equally important is separating out NRR for your largest customers versus the rest of your customers since often the behavior of large customers is markedly different than average customers. Their effect on a business and can be hidden in aggregate data and a sense of their impact is lost.

• NDR measures the average percentage change in revenue over the first 12 months of a customer.
• NRR measures the percentage of revenue retained from all customers (regardless of time as a customer) over a rolling moving 12-month window

Both tell you a lot about the health of your business, but I’ve found that most companies report on NRR (which they typically call NDR) rather than on both.

Quick food for thought for today…

The democratization of capital may be messy at times, but it’s much better than the alternative. And it’s long over-due.

Robinhood’s actions to restrict trading in GameStop stock, as well as several other issuers, was completely the wrong response to an increasingly active capital class. It’s time to give up this old notion that small investors somehow need to be saved from themselves (as they claimed was the reason they halted trading in GME and other issues *). For years, capital investment has been the sole purview of the wealthy in the United States and elsewhere. We’ve long had a series of laws that restricted people’s abilities to invest in private stocks and at that same time, given fee structures and the general opaqueness of the public markets, it’s generally been the purview of only wealthy Americans. Both of those trends have started to change over the last handful of years – trends we should be encouraging not limiting.

The Jobs Act, passed in 2012, was a positive step in opening up private investment to more Americans. Title III of the JOBS Act (which was adopted in 2016) lets startups raise money from non-accredited investors. Previously, investors had to income (at least $200,000 a year over) and/or net worth (at least $1 million excluding your home) to be considered “accredited” and allowed to invest in any number of private assets. Title III allowed anyone to invest via equity crowdfunding. There are some challenges to Title III that still need to be addressed. For example, companies are limited to raising just over $1M million through this method, which limits the scope of businesses that can take advantage of capital formation in this manner. Additionally, there isn’t a mechanism for individuals to create “funds” under Title III to spread out their investment risk (they can only do so by investing project by project). Perhaps most importantly, there are significant per investor limits on their ability to participate in Title III Crowdfunding offerings that limit individual investor participation in crowdfunding marketplaces. But, opening up the ability to invest to a broader swath of Americans – democratizing capital – was a positive and long overdue step. At the same time on the retail side, platforms such as Robinhood have opened up public markets trading to more and more people eager to gain a foothold in the markets. To me, these trends are incredibly positive.

Capital ownership should be more broadly distributed. And while there need to be sensible regulations in place to prevent fraud, the notion that somehow people with less than a certain threshold of net worth can’t make intelligent investment decisions in the private markets is absurd. Robinhood restricting the trading of these stocks is just a continuation of old thinking. They’re a capitalist platform. They should believe in the capital markets and that, even if there are short term aberrations, ultimately the markets will figure it out. The fact that their actions helped stem a short squeeze that was hurting larger Wall Street traders and hedge funds exacerbates the perceptions that they’re not truly democratizing capital in the way that they have suggested that they are. Fred Wilson wrote a similar post earlier this week that I strongly agree with and would highly recommend reading as well. The solution to these sorts of aberrations in the market is to let the market play them out. In the long run, efficient markets will do exactly that (find the efficient price) and the long-term value of the stock will eventually trend back to its underlying and intrinsic value. 

* It’s worth noting that while Robinhood claimed they stopped trading to “protect customers” the true reason was perhaps a bit more complicated. After admitting that there were some “regulatory issues” that prompted the trading halt, the company eventually revealed that the company itself lacked the liquidity (capital) required to allow trading to continue at the levels it was seeing. It subsequently put together a hasty $1bn financing.

I’ve been doing a light mindfulness practice over the past month and a half through a portfolio company of Foundry’s called Meru Health. It’s been a great experience (my first time trying to do work like this on any consistent basis) and has taught me a number of things. Perhaps the most important has been the realization of how infrequently I do only one thing. I had no idea how infrequently I was able to focus on just a single thing. In fact I almost always have several things going on at the same time – I’m walking the dogs but also Voxing. I’m on a Zoom, but also replying to a quick text. I’m taking a shower, but also planning out my day. It’s insidious. And probably not all the healthy.

I know that everyone does this to some extent or another due to the culture we live in. There’s a high expectation to accomplish and produce, and many of us base our self-value or even our identity on our daily output. The mental sharpness and high productivity we attribute to being an effective multi-tasker can be sources of great personal pride.

There have been some really interesting studies (see here and here for examples) showing that, despite what we think, humans really aren’t good multi-taskers. We’re simply not very good at switching tasks quickly and moving efficiently from one thing to the next. As we switch our attention back and forth between multiple tasks, we’re not performing any one of them optimally and we’re much more effective at each function when we focus on it individually.

As I’ve gotten into this mindfulness practice, I’ve been amazed at how often my mind wanders away from what I’m trying to focus on. I’ve had to really stop myself and actually practice doing one thing at a time. But as I do this more and more and hold myself accountable to doing one thing at a time, it’s become easier for me to focus and I’m getting better at it. I think many of us, myself included, have trained our brains to shift constantly from topic to topic or task to task. I’m hoping that as I continue my practice, focusing on one thing at a time, and one thing only, will become more natural to me.

I thought it would be helpful to flag for you all as well.

As I listened to Kamala Harris and Joe Biden give their speeches from Wilmington on Saturday, I was struck by the contrast they offered to the rhetoric we’ve heard coming out of the White House for the past 4 years. Perhaps I had forgotten what ‘normal’ actually was. Both Biden and Harris spoke to the entirety of America – those that voted for them and those that didn’t. They spoke of character, honesty, science, and a belief that our strength comes from collective action, not from divisiveness. I woke up Sunday morning, as I imagine many of you did, with the feeling that a weight had been lifted from my shoulders. That, while America remains surprisingly divided, we’re back on the right track. I was struck by the outpouring of pure emotion we saw, not just from around America but from around the world. It will clearly take us years to heal from the divisiveness, hatred, and animosity that our soon-to-be former president stoked and thrived on. And without question, there are voices around the country who feel marginalized and that they have been left out. We need to acknowledge that and understand why 70 million people believed that the right conduit for their voice was a racist, bigoted, selfish, lying autocrat.

I’ve been thinking a lot about the legacy Trump leaves behind – especially his legacy of racism and hatred – and wanted to share a story to put some of that thinking into context.

Trump took bigotry and hatred, that had clearly been simmering just below the surface in this country for centuries, and brought to a boil. He made it acceptable and seemingly righteous to be racist, sexist, homophobic, and generally intolerant (if not malicious) towards anyone that is somehow “different.” And while I think it’s a mistake to paint all Trump voters with a broad brush, certainly a vote for Trump was at least a statement that these things weren’t a deal-breaker. It’s ok to vote for a racist, as long as you get X (whatever that thing is that you think is more important than character and integrity).

Last week, our family dealt with a situation that was a reminder just how harmful this embracing of racism and intolerance has been to our society.

Late Thursday night, around 11 pm, we received a call from our daughter. She had been alerted by a well-intentioned friend that the NAACP was circulating a warning that white supremacist groups were plotting to kidnap black men and boys with the intent to torture and kill them. She was worried about her brother, who is black, as well as her friends at school who are black and brown. I can’t tell you how upsetting it is as a parent to know your child is up late at night worried about themselves and their family because they are targets simply because of the color of their skin.

As parents of two black children, we’ve learned a lot about the state of race in our country in a way that our privileged, white upbringing (even in liberal households) didn’t allow us to understand. When a family of black children refers to “the talk,” they’re not talking about the birds and the bees. They mean the talk that black families have, to tell their children to watch out. To be careful about how they interact with people in authority. To explain to them that they will likely be targeted (pulled over by police, followed, etc) because of the color of their skin, but that they need to be careful in diffusing those situations, lest they be in harm’s way (like somehow this racism is their fault). We’ve already seen our kids be followed and targeted because of the color of their skin. In our family, we had “the talk” when our son was just 8 and our daughter was 11 (tbc, the talk is an ongoing conversation, not a one-time thing; over and over we’re forced to confront a racist society and racist acts and put them in context for our family).

And I can say unequivocally that overt racism has increased since Trump was elected. He didn’t invent racism, but he made it great again (to use his marketing term). We’ve experienced it as a family. Our kids have experienced it. So many others, too. I was recently talking to a black friend, a woman who has lived in Georgia all her life. She said the same thing. In 45 years she had never been called the n-word. The week after Trump was elected she was. And then repeatedly over the course of the last 4 years. Trump awakened something that was just under the surface of our society. And it’s not going to go away just because he is no longer president.

The supposed NAACP alert that our daughter sent to us turned out to be a hoax. It felt off when we saw it due to the language used, and when we looked online it turned out to be false. The idea that this warning was valid was completely plausible, given the social climate we’ve been living in and the hype we saw in the media over the past several weeks about potential election-related violence. And no doubt there were people out looking to do harm to those that they felt had caused their guy to lose the White House. While many people reading this are likely a few steps removed from the realities of what this really means to many people in our society, I wanted to share this story to provide a bit of direct and real world context. We were up that night thinking about whether our kids are safe, only because of the color of their skin, and sad and disheartened that they are afraid. Black parents (and other parents of black and brown children) around the country have to think about this all the time. That fact shouldn’t be news for anyone. Being white (and male), I can only scratch the surface of understanding what it really feels like to be a minority in the U.S. 

The post below was written by a friend who wanted to share it but asked to stay anonymous (so as not to call her mom out). I think it’s really powerful, I hope do you as well. The strain this political season is putting on families is real. November 3rd will be here soon, for better or worse…

Why a 47-Year Republican is Crossing Party Lines and Lessons in Life and Business from Her Daughter’s Painful Journey

I’m very close to my mother and I have deep respect for her. However, there’s been a nagging distance between us since Donald Trump ran for president four years ago.

My mother has been a loyal Republican for 47 years. I’m an Independent. We often voted differently, but we could almost always find common ground because we share many of the same values, most of which she instilled in me.

She raised me to be an independent woman and to believe that I could do everything that my brother could do. She taught me to be compassionate, to respect all races and religions, and to always take the high road. Whenever I faced conflict and wanted to lash out, she told me to “kill them with kindness.”

When Donald Trump ran for president in 2016, I was sure she would cross party lines to stand for the values that she taught me to believe in. To my surprise, she did not.

Then, the infamous “Grab her by the” Access Hollywood tape surfaced. I was certain that this would change my mother’s mind. How could my mother, a woman who raised me to be a strong, independent woman, support a man who so viciously objectified women? Yet, she stood by him. She admitted that his behavior was disheartening, but excused it because he was a “man of a different generation.”

I mustered the courage to tell her how disappointing that was for me to hear. I revealed that when I was 16, I overheard my bosses engaging in similar behavior as we saw from Trump in that video. As a result, it took me ten years to overcome my fear of being alone in a room with any of my male colleagues or superiors. It wasn’t until I heard that tape that I felt that same feeling of fear and sadness that had taken me ten years to overcome. To hear this from the man who may be the next president of the United States and to know that my own mother was supporting him was hard to swallow.

She cried and said that she was so sorry that I had that experience. She then shared a story about how her father’s friend brutally sexually harassed her in front of my grandfather and my father shortly after they were first married. Neither my father nor my grandfather stood up for her. That, as you might imagine, was deeply hurtful to her, but she said that she was able to forgive them because they, like Trump, were good men who simply came of age in a different era.

Shortly before the election, she called to let me know that she had made her final decision to vote for Trump and that, while she was ashamed to admit it, she realized that she “was not ready for a female president.”  In that moment, I realized that the woman who had raised me to believe that I could do anything my brother could do did not actually believe that to be true. While my instinct was to lash out, I swallowed my tears and thanked her for the tremendous amount of courage it must have taken for her to make that call.

In the four years since then, I had many more urges to lash out. I always stopped myself because my relationship with my mother is more important to me than winning a political argument. I even started to appreciate the opportunity to be so close to someone with political views so different than my own, and to admire her ability to stand by her convictions. There was this one moment when we were sitting with eight other people who just assumed that she had voted for Hillary Clinton. This woman started going on and on about how she just couldn’t understand how people could be so ignorant and selfish to even consider casting a vote for Trump. I watched my mother squirm in her seat for a few minutes until, finally, she took a deep breath and said, “I just want you to know that I voted for Trump and I don’t believe I did so for ignorant or selfish reasons.” The woman apologized, and my mother proceeded to calmly and respectfully explain why she had voted for Trump. We all emerged from that conversation with greater compassion and understanding for both sides of the aisle, and I was deeply proud of my mother. I watched her interact with people with opposing political views on many occasions without ever muttering a hateful word. I’m proud to say that we never shared a hateful word about each other, until the first presidential debate of 2020.

As I watched the debate, I thought about how horrified my mother would be if her four-year-old grandson emulated the behavior of our president. I composed an angry email to ask her how she could possibly be so stubborn and stupid, and to tell her that I would never forgive her if she voted for him. Because I’ve learned to never send an email when I am below the line, I decided against sending it.

The next morning, she called me to ask for my advice. She had spent her morning working out with her 75-year-old trainer, who is recovering from cancer, at a gym where masks are required by state mandate. She asked a woman who was not wearing a mask if she would consider complying with the law, and the woman aggressively lashed out at my mother, stating that it was her gym, too, and that my mother had no right to police her. It spiraled into a dramatic 45-minute argument that involved the manager and several gym patrons. She called me to run through all of the facts and content of the argument, and I told her that none of that mattered because the woman was reacting emotionally rather than rationally. I gave her some tips on how to relate emotionally without evoking defensive behavior and then I said,

“Mom, I am afraid we will all continue to experience more incidents like this if we elect a president who promotes bullying and aggression.”

The next morning, I woke to a Facebook notification with this post from my mom:

“My daughter said something to me yesterday. A vote for Donald Trump is promoting the example that a person who behaves and conducts themselves as he does can rise to be the most powerful leader in the world. I have been a Republican for 47 years, but I will be casting my vote for a kinder, gentler candidate.”

As I reflect on this five-year journey, I am struck by how much I have learned and how applicable these lessons are to all aspects of my life. Because, as entrepreneurs and VCs, we are in the business of changing behavior and disrupting the status quo, I thought it might be helpful to share some of the tips I learned along the way.

People respond poorly to shame. The more self-righteous I became, the more she retreated.

Understand your own patterns and the patterns of those around you. I’ve been on a parallel path to become more self-aware to deepen my knowledge of Conscious Leadership. This paid dividends to my business and to my conversations with my mother. The Enneagram and the Four Tendencies have also been particularly helpful.

Build close relationships with people with opposing viewpoints. This journey with my mother has helped me approach all sorts of opposing viewpoints with more compassion and empathy, and it has led to much more productive conversations.

The reason people give is rarely the real reason for their decision. Over the past five years, it became increasingly obvious that my mother’s behavior was driven by conscious and unconscious gender bias, and 65 years of programming herself to believe that the path to a virtuous life was to be a good Republican.

Uncovering the most important behavior driver is the key to driving change. At the end of the day, I believe my mother made this decision for me. Above all else, she is a mother who would do anything for her children. I think our journey would have been much shorter if I would have recognized and tapped into that from the beginning.

Never send an email in a state of anger. I am not sure why the mask incident was the straw that broke the camel’s back, but I am certain that had I sent that below-the-line email to ask her how she could be so stupid and stubborn to support Donald Trump, she would have cast her vote for Donald Trump.

During COVID, I’ve been asking myself what I want to be able to say about how I spent my time during this pandemic. I think I finally have an answer. I want to learn how to better resolve conflicts and drive change without evoking hatred and defensive behavior from the other side. I learned a lot from this five-year journey. I want to take what I’ve learned to drive far more change in far less time. I hope this story will help you do the same.

Community is one of the driving forces at Foundry Group. We’ve kept ourselves intentionally small as a firm so we can keep our close connection with our portfolio founders from due diligence, to investment, and throughout the lifecycle of our investments. We strongly believe that fostering a mesh network model, which allows our network members to interact directly with one another, is the best way for all of us to learn, develop, and thrive together (vs the more traditional hub and spoke model that most firms end up falling into with partners as gatekeepers). Keeping this model improving and evolving is so important to us, especially in the current climate of social and economic change. We want our programming to be impactful, relevant, and able to serve our community in a way that promotes growth, development, collaboration, and ultimately successful company and fund outcomes. In light of this, we’re excited to announce that we’re hiring a Head of Network to expand and develop Foundry’s network programs. The full job description is below. If you or anyone you know fits the bill, please reach out to us at apply@foundrygroup.com. And please help us get the word out!

We’re looking for a leader to create a more robust, dynamic, and connected network program at Foundry Group. The Foundry Network, as we’ve been calling it, encompasses founders, CEOs, executives, general partners of our underlying venture capital fund investments, limited partners (our investors as well as other investors in the funds we have investments in), and other members of our ecosystem. We regularly bring together members of this community to connect, share, and learn from each other. 

We know we’re just scratching the surface for how powerful this network can be. We’re looking for someone with the vision, background, experience, and skills to help us form the next chapter for The Foundry Network and to continue to grow and adapt how we work with our ecosystem in ways that support and empower our portfolio of companies and VC funds.

ABOUT US
Foundry Group is a venture capital firm that invests in early-stage technology companies and venture fund managers. Our passion is working alongside entrepreneurs to give birth to new technologies and to build those technologies into industry-leading companies. We also seek to leverage our experience and relationships as fund managers to help the next generation of venture firms create industry-leading investment businesses. We invest in companies and funds across North America.

SOME INITIAL THOUGHTS ON THE DETAILS OF THE POSITION
We’ve put a lot of thought into the development of our network and need help taking it into the future. Below are a few ideas we have about this position and the future of The Foundry Network. We’re looking for someone who can help us craft the vision, not just execute on ours. So take this as a rough draft. 

As Head of Network you will participate in our weekly partner meetings and be a member of the senior team, which includes our CFO and General Counsel as well as all of the Foundry Group partners. You’ll have access to and know pretty much everything that’s taking place across The Network and our portfolio. At its core, this role will help strengthen connections between the people with whom we work- we believe strongly in mesh networks, not hub and spoke models. We are also excited to continue to expand The Network and the work we do in this area, such as in talent sourcing, data sharing, and community support. 

We’ve historically engaged our network through active digital communication channels, in-person events, virtual events, webinars, and small group meet-ups. Many of these we’ll likely want to continue. Some we may together decide don’t further our key goals any more and will stop doing. And, most importantly, there are opportunities to expand beyond the base that we’ve created to support our portfolio in new and creative ways. 

A LITTLE ABOUT YOU
It’s hard to put into words exactly what we’re looking for because the right person for this role could come from a number of different professional backgrounds. But there are a few things that we know will be important to success in this role and our firm culture. 

This is a relationship-centric role and we are looking for someone who has a demonstrated aptitude for building and maintaining professional relationships. You have built your own network and are driven by helping others succeed and connecting the dots between people and companies. You have connections in and around the tech industry and have interacted with executives at a senior level in prior jobs and experiences.

At Foundry, we are not top-down managers. Our Head of Network will need to be comfortable working independently and own this core functionality of our business You will be included in and supported by the core team, but the role is primarily self-directed. While we will provide input and help you understand our goals for The Network, there is a lot of room for creativity and expansion. 

In addition to creativity and vision, the ability to execute and achieve high-quality outputs are imperative for success in this role. Every senior role at Foundry – including our partners – is an individual contributor. We work collaboratively and in close coordination with one-another, but we do our own work and, while we have people on board to help with implementing events, much of the work of the Head of Network will be not just coming up with ideas, but seeing them through personally. 

We live by a #givefirst mentality at Foundry, and we hope you can show us how you’ve done the same. 

Finally, we want to be clear that this role isn’t a pathway to an investment role at Foundry. We want you to be excited about this role and this position. We think it’s a great opportunity to work alongside us as we continue to build out the Foundry Network.

EXPERIENCE
There is not one particular background that fits this role and we are open to candidates across the board. Given the autonomy of the role, we believe an individual with at least 7 years of professional work experience and who has previously held a senior level role will thrive. We’re focused on how your experiences drive your interest in this position and how they will contribute to your success in this role and at Foundry.

SOME DETAILS
Our firm is based in Boulder, but we’re open to you living anywhere, so long as (once travel resumes) you’re able to be here from time to time (most of our in person events are in Boulder, for example). This is a senior position and will be compensated as such. Additionally, we offer a generous benefits package (fully paid health insurance, along with a number of other benefits). 

Foundry Group is an equal opportunity employer. We strongly encourage and seek applications from candidates of all backgrounds and identities, across race, color, ethnicity, national origin or ancestry, citizenship, religion, sex, sexual orientation, gender identity or expression, veteran status, martial status, pregnancy or parental status, or disability. We are committed to creating a supportive and inclusive workplace. 

NEXT STEPS
If you’ve read this post and think, “this is me!”, we’d love to hear from you. Please feel free to be creative and choose a medium that allows you to express yourself and give us a sense for whether you are a fit for this role. To apply, please contact us at apply@foundrygroup.com. We’d love to hear from you by the end the day on Friday, November 6, 2020 if you’d like to be considered.

Some of the most popular posts I’ve written over the past couple of years were the two that focused on just how rare outsized returns for an individual deal are in venture capital. You can see the original posts here and here. In those posts I was analyzing data from Correlation Ventures that showed just how skewed venture returns are, specifically that 65% of investment rounds fail to return 1x capital and only 4% return greater than 10x capital.

Ian Hathaway, who recently co-authored the second edition of Startup Communities with my partner, Brad, sent me the chart below which highlights how that translates to returns in venture capital as an asset class. I’ve seen versions of this chart before and while it’s not surprising it is always jarring to see it laid out like this. Specifically, the difference between the best performing and average performing firms are incredibly wide. Venture is a hits business and if you think about a typical venture fund of almost any size having somewhere between 25 – 40 investments, the chances of any one of those investments being a true outlier and returning a multiple of the fund are quite small. In order to have a successful fund, it’s almost a requirement that you have an outlier return for at least one of your investments (see below the chart for the math).

Some quick math highlights why this is the case. For example, assume a $100M fund with 30 investments. That’s a little over $3M per investment, and while there is some dispersion from the average across companies in a fund, it’s not a bad way to model it. But from the outcomes chart above (the first one) we know that on average only 1 (actually just fewer than 1) company in that group of 30 will return between 10x and 20x. And less than 1 will return 20x or greater (I’m using the company averages, the dollar averages are on a per round basis, which would make these numbers even worse). A 20x returner for a fund that on average invests $3-$3.5M in a company doesn’t return that fund. Taking the most aggressive end of these numbers would still only have this one company returning 70% of the fund’s capital. If you were going to have several of these, of course, that would work out for your fund. IRR will depend on the timing of cash flows but as a quick rule of thumb, venture funds look to return at least 3 times the invested capital – after fees, so more like 3.5x on a gross basis. That’s pretty hard to do without a true outlier return (50x+) and/or consistency of 10x+ returns that is simply hard to generate. And here’s where the dispersion comes in. The best funds do have multiple companies that return in that range. Or higher. But that means the median fund doesn’t have any. And that is why the average venture fund isn’t actually a particularly good investment and also why so many venture funds fail to return capital.

I thought about this a couple of years ago when I wrote about the optimal venture fund strategy and my conclusion was that venture firms should place more bets and have more exposure across a larger set of businesses. Obviously, those inside the industry argue that managers who are good at picking businesses would do better to own more of fewer businesses if they can show that they have the aptitude to invest in those that become true outliers. But given how rare they are, I wonder if that is arguably the optimal strategy. As David Cohen replied once years ago when I asked him what the key to being a successful venture capitalist was: “Luck”.