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The Trouble with Theme-based Venture Investing
Written by: Paul KedroskyArticle Overview: Pithy comments from Sequoia's Moritz on his trouble with theme-based venture investing:
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The Trouble with Theme-based Venture Investing
Pithy comments from Sequoia's Moritz on his trouble with theme-based venture investing:
Moritz waxed philosophical by comparing venture capital investing to bird spotting. "I rarely think about big themes. The business is like bird spotting. I don't try to pick out the flock. Each one is different and I try to find an interestingly complected bird in a flock rather than try to make an observation about an entire flock." For that reason, while other firms may avoid companies because they perceive a certain investment sector as being overplayed or already mature, Moritz said Sequoia is "careful not to redline neighborhoods".
Continuing with the ornithological analogy, Moritz pointed to Cisco and said, "There's a lot to be said for investing in the ugly duckling." When Don Valentine led Sequoia Capital's investment in Cisco, many others had passed on the husband and wife founding team of Len Bosack and Sandy Lerner.
I buy the contrarian aspect, but is there more to this than that?
Article Tags: analogy, cisco, flock, husband and wife, investment sector, len bosack, observation, s moritz, sandy lerner, sequoia capital, ugly duckling, valentine, venture capital
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About the Author: Paul Kedrosky RSS for Paul's articles - Visit Paul's website Dr. Kedrosky is currently the Executive Director of the William J. von Liebig Center in San Diego, California. Using an innovative seed capital program, the Center catalyzes the commercialization of technologies from the internationally-ranked University of California, San Diego. Dr. Kedrosky is also a venture investor with Ventures West, Canada's largest institutional venture capital firm, where he is most active in consumer technologies and software. He is currently on the board of Marqui Corporation, a marketing automation software company. Click here to visit Paul's website More Roundtable Musings The IPO Problem If Youre So Dumb Why Arent You Rich Part II Freds Five Rules for ProductMarket Fit Mark Cuban Hates Suits Googles Retention Problem |
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