- Be Successful
- Short Description: Success as a venture capitalist is great for deal flow. When a founder sees that you were an investor in or board member of a successful company, they are more likely to approach you. While there is a debate about the degree persistence of performance across funds, there is less debate that a success halo provides increased deal flow. (See Be Famous for a slightly different approach. You can be famous for other things besides particular successful companies.)
- Benefits:
- Less Work to Maintain: The work and effort of this strategy are put in upfront and can keep reaping benefits for a long time.
- Keeps Focus: Pursuing this strategy keeps focus on doing the work of investing very directly.
- Cheaper: Be Successful does not require extra expenditures beyond doing the work of investing in great companies and generating returns.
- Trade-offs:
- Competitors and Categories: Depending on the nature of the company you are known for, it is possible that some founders in a similar category will not approach for fear of competition or information sharing. The impact varies on the reputation of the successful company and the way categories are defined.
- Hard to Execute: The Be Successful pattern is easier said than done.
- Not The Main Point: And there are other better reasons to generate great returns besides future sourcing! We include it here for completeness.
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