Why are VCs so indecisive?

Ever notice how indecisive many VCs are? Maybe I’m just quick tempered, but it bugs the hell out of me that so many of my venture colleagues can’t seem to make a decision. Sometimes this shows up in overanalyzing a prospective investment (just to turn it down later for a completely unrelated reason which came up in the first week of their diligence); sometimes in the line “we’re waiting to see if any other investor is interested in this deal before deciding to pursue it”; sometimes in a delay taking an action with a CEO when its clear something needs to be done; sometimes in simply not having a definitive opinion on any issue – ever – until someone else has spoken out. You get the picture (and I’m sure many of you have lived through it). I’m not at all saying we should say ‘yes’ to everything; nor am I suggesting that sometimes its not ok to simply have no opinion. But sometimes. . . perhaps most of the time . . . being definitive (even if you are definitively wrong) is better than being non-committal (and therefore noncommittally neither right nor wrong). Grrr.

  • And on the other extreme: partners relying on one of their recent MBA associates to make a decision for them — i.e, letting the first knee-jerk reaction of someone with absolutely no startup or operational experience decide whether or not to kill a deal. Both extremes suck.

  • Decision making is an art.
    Time management is a science.
    Most people aren’t artists or scientists, and most people don’t know anything about decision making and time management.
    Identifying the key drivers of an investment and coming to a quick, high quality conclusion is rare.
    Most people succumb to the noise of their own uncertainty and drown in their own inertia.
    You are one of the few non-procrastinating people I’ve ever heard of in private equity.
    You are a realist and I enjoy your insights.

  • VCs are indecisive for a simple reason: It works. Or more precisely, a generalized indecisiveness, coupled with a ruthless decisiveness when the time comes, works.
    While dithering may be unattractive, it buys time to continue monitoring the progress of potential investments.
    But once it comes time to make a decision (e.g. someone else is moving in on the deal), you have to be ruthlessly decisive or some other yabbo will swoop in and steal it out from under your nose.

  • VC’s in Ireland seem to have taken this to a new extreme.
    I recently took the unconvential step of approaching a number of VC’s via email (not the best option as I know but I had 48 hours to raise a substantial amount of investment).
    None of the Irish VC’s even acknowledged my email. This in stark contrast to the US based VC’s. Most of those not only replied but some also entered into some form of dialog and were of great help.
    It clearly illustrates that VC’s in the US (and the whole startup climate for that mater) is far more advanced than their counterparts in Ireland (or Europe)..
    E.