Venture capitalists are often asked the question about their “anti-portfolio”, i.e. companies they passed up the opportunity to invest in when they had an opportunity to and which, in hindsight, turned out to be great investments. Worse than that is when one chooses to invest in a company that doesn’t do well but their direct competitor ends up rocking.
VCs are after all rewarded when their investments give outstanding returns. But, we are also in a business where we often meet more than 100 times the number of companies we actually invest in. At the seed stage, any investment is a judgement call of the entrepreneurs, market opportunity, business execution, competitive landscape, board involvement and dynamics, and last, but not the least, luck and serendipity.
Secondly, any early stage VC is more than a cheque writer. It’s a profession where one plays the role of a strategist, coach and also a friend, all the while working very closely with the founders.
“What if we had invested in TaxiForSure or Urban Ladder when we had the chance to?”
After all, we knew and saw them well before anyone else did and heck, Ashgo (Ashish Goel) and Rajiv from Urban Ladder sat in our office in the first three months of their ideation.
The fact of the matter is that in neither case did we get the conviction to invest and it would be arrogant of me to assume that we had the opportunity to do so. And even if we had, who knows if those companies would’ve taken the same trajectory they did.
It is, however, important to introspect. We need to ask some important questions like, did we not understand the business or the team? Were we too slow? Did we over-analyse? Did the market change and could we have anticipated it? Learning from these decisions are perhaps the biggest benefit of looking at the “anti-portfolio”.