driving consensus through conviction
2/6/25
Bet on things you believe, especially when others don’t. That is conviction.
The simplest way to define venture capital is investing in startups with high upside potential. Yet, while the definition is clear, the inputs and processes make it complex—
Team: Can this team do what hasn’t been done before? Or are they simply just better than everyone else?
Market: Is the TAM large enough?
Why Now?: Why does this company need to exist today? What are the tailwinds that will catalyze the business?
Economics: Based on the likely exit scenario, will our entry cost basis provide us with enough upside to offset the risk?
Partnership: If this is the best company in the space, we compete with everyone else. Why us? How do we win the deal?
In this industry, “tier-1” firms exist for a reason. They earned that reputation by investing in opportunities where they saw value—when others didn’t. They backed companies that became highly valuable before consensus formed, not after. The byproduct of this success? Both LPs and founders want to work with them because they want to work with the best.
You can either work for the best or compete to become the best.
Competing with the best means you start at a fundamental disadvantage: fewer resources, less capital, a smaller team, and a less developed track record. But these same disadvantages are what founders face when they take on industry incumbents. In the same way, I am competing with Founders Fund, Sequoia, Thrive, USV, [insert amazing fund]. They are competing with Meta, Google, Uber, Coca-Cola, Activision, Abbot Laboratories [insert legacy incumbent]
To compete with the best & win, you have to do what others aren’t doing.
In venture, this means discovering undiscovered talent that is being overlooked or mispriced by the market. Discovering the undiscovered is hard. Once you find that person, the next hurdle is driving consensus internally. This might be harder. Internally, everyone has inherent biases for opportunities they source, relationships they develop, and categories/stages they favor.
Until recently, I thought I could overcome internal biases by voicing my excitement louder, bolstered by the data and work I presented. I thought that was conviction. It was conviction, but only mine. I learned the hard way that although everyone appreciated my excitement and work, that alone wasn’t sufficient to make them bet on these bold ideas.
I needed to influence the team to feel excited about the deal independently, help them understand my conviction, rather than just suffocating them with my excitement.
Influencing others to draw the same conclusions or have the same realization about opportunities is challenging and takes time and skill to develop. Looking back, this is an EQ101 crash course because (1) every person is different and has their own motivations, and (2) I learned that showing others, rather than telling them, is much more powerful.
My colleagues sourced a deal they were highly excited by despite it being a pre-launch company in a category that we view as less interesting. What got them excited was the founder.
Initially, I was pessimistic about the deal because of my disposition to not wanting to do anything pre-launch and in this category. Also, this was a deal I didn’t source, and I had a bias for wanting to push my own deals over the line.
Although pessimistic, I met with the founder 1-on-1 and immediately saw the vision. In 30 minutes, I went from not wanting to meet him via Zoom, to booking a flight the following day at 5AM to meet him in person.
We spent the entire next day together, eating breakfast, lunch, and dinner, touring his city, and seeing his life. When we met for breakfast, we started at the beginning, learning about his childhood and family life. We swapped stories about everything we did as first-time founders: the lows, the highs, the mistakes, the learnings, and everything in-between.
I learned so much about him and the business he was launching that day, insights I would not have had if I stayed on Zoom.
That day gave me the conviction to fight tooth and nail to get the deal over the line. Although my team was initially excited, that feeling faded over time. There would be a lot of pushback based on the key items I mentioned earlier: pre-launch, low multiple categories, legacy incumbents, expensiveness, etc.
That didn’t discourage me from trying to influence the team. I did a reframe: this isn’t just a pre-launch company in a boring category; this was a founder bet. My conviction lies in him.
When it came time to show, not tell, I shared examples of how, historically, we have mistaken early-stage companies as founders’ bets. When, in reality, we were indexing on a pre-existing relationship, a category we favored, early traction, etc. We were not indexing on the strength of the founder.
This is a true founder bet. He is obsessed with what he is building, almost irrationally obsessed, to the point where he would rather die than fail. He has leveraged every relationship to get to where he is today, demonstrating resourcefulness and an ability to execute. Without our capital, he:
Closed several million dollars in funding for the Company
Onboarded strategic talent partners with a social media following of 100M+
Recruited and secured a proven CEO in the category, who scaled his previous company to high eight figures in revenue
Secured nationwide distribution from the largest retailer in the U.S.
He accomplished all of this without us. He can and will succeed without us.
It’s up to us. Do we want to bet he is the founder to build this successfully? If it isn’t him to do it, then who?
This is a scenario where we are not competing with the best funds, because he is undiscovered. Discovering the founder, when he is undiscovered, is how you become the best.
My newfound framing opened the team's eyes to see what I was seeing. They could not just see but resonate with my perspective, viewing it through their own lens. This drove consensus on the decision, although not unanimous (which only exists when viewing things retroactively), but consensus, nonetheless.
If this happened six months ago, the deal would have never happened. I would have been resentful and hoped that the company would be successful so that I could be right. But I learned I would rather be successful than right, and to do that, I need to influence others, not jam them.
I have by no means mastered the art of influencing others, but I am learning and improving every day. This moment was a testament that I am on the right path. Hopefully, I am both successful and right in this scenario! I likely won’t know for 5-7 years, but that is the beautiful nature of the VC industry—delayed gratification.
If you are building at the intersection of consumer & culture, let’s chat!
-m