Perspectives

“Friend” is a noun

Photograph by: Shripriya

“Friend” is a noun. When it got turned into a verb, it emphasized the transactional nature of many relationships online. While the meaning differed across platforms, it usually meant it was someone whose updates you wanted to see on a regular basis. The platforms themselves then decided how much you would see, using every minor action of yours (intentional or otherwise), thereby controlling the relationship. The platform maintains the connection for you, and instead of sitting on a couch talking to one person, looking them in the eye, you are speaking to a crowd, none of whose eyes you can see, and hoping that keeps the relationship warmish.

That’s not a friendship. That’s a potentially useful exchange of information. The act of “friending” the person was a one-off initiation of this exchange. Building a friendship, making someone into “a friend,” takes more.

Friendships can be created online, but they require:

  • the ability to form a connection. One way to form connections is to have a shared purpose, goal, experience, or project/effort of some kind. That’s why we feel so strongly about Product-Led Communities.
  • a constructive alignment of values that allows collaboration.
  • getting to know the person, in a nuanced way—what they care about, their sense of humor, how they solve problems, how they spend their time, whether they are an asshole to people close to them.
  • a commitment to show up. Online groups where people intend to show up on schedule, and actually follow through, are much more impactful rather than ones where there is no firm commitment to show up and people float in and out as they choose. The decision to make this group a priority means a lot to the people in the group.
  • enjoyment of the interaction—an interaction with a real friend makes you feel better after than you did before.
  • relaxation, enjoyment, or learning. Interactions when you can be yourself, laugh, not watch every word, or walk away smarter, with a new perspective, are all interactions you will want to have again.
  • time, to develop all these dimensions of the relationship over many months.

As I look back at last year, I realize there were a lot of events, one-off talks, lectures, and hangouts. Some involved icebreakers, which are helpful. There were efforts at “community,” but did those result in real friendships, as opposed to “friending”? Real community, versus minor interactions that are easily forgotten?

A couple of weeks ago, I was on a Clubhouse chat where an influencer told the audience we were all lucky to be on the platform this early because we could 100x our audiences if we did things right. And that would be very valuable. That’s our mindset right now: do this thing because it’s valuable. Hang out here because you can meet XYZ, who might invest in/hire/help you down the road.

There is a place for this and there is definitely value in this kind of transactional relationship. But the internet has skewed toward this worldview because when measurable value is created, it can also be extracted.

But how do you really make the online world less transactional? How do you enable the formation of deeper connections where people are willing to spend the time because they enjoy the company of the other person or group rather than find transactional value in it?

There is value in deeper, more meaningful connections and it behooves us to think about how to create these interactions online. The “value” may be harder to measure immediately, but over the long term, will likely lead to more valuable, resilient platforms, and  therefore a healthier internet.

I’m thinking out loud here. How did you feel about your online experiences last year? Do you want to repeat them? What would you like to see changed or improved? Please reach out—I’d love to discuss (in a non-transactional way!)

Time travel

A new day, Shripriya Mahesh
A New Day. By: Shripriya Mahesh

A screenwriter’s job is to capture the human condition and the fantasies and torment of the human mind. That’s why there are so many time travel movies: humans are constantly thinking “what if” and “if only.” Back to the Future is all about what would have been different if something small had changed in the past. Bill & Ted’s Excellent Adventure is about exploring what the world was like in different times. Terminator is about killing someone from the past so that a savior child is not born.

These movies are all artistic interpretations of thoughts we have all the time. For example:

  • What if things had gone differently?
  • What if I had done this, instead of that?
  • If only I could go back and fix this one thing…
  • What if I could erase all the horrible mistakes?
  • What if I could go back and do all the things I thought I’d do, said I’d do, and wanted to do, and therefore become the imaginary person I thought I would one day be?

In reality you cannot. You can only focus on where you are and what you can do going forward. You’re never too old, too young, too anything.

In a way, these are all comfortable excuses for not being who we want to be, living the life we want to have. Anyone reading this post has some level of agency. Believe in your agency. Instead of regret, imagine what you can do today to make your future self proud.

2020 was a really hard year. When I look at it in a certain light, it’s easy to beat myself up over a “lost” year. But, the achievement, in a year like this, is getting through it the best you can. We still have 16 days left of this year; let’s focus on getting out safely and with our sanity intact. There’s hope, thanks to hardworking scientists.

The best thing we can do is look forward, towards a better world where we are more aware, less naïve, yet more hopeful about the amazing things human beings can create. The amazing things you will create.

Where Do Missions Come From?

Clarity Sensor, Image Credit: Clarity

Almost every company has a mission statement, but not every company has a mission. For a startup, a mission is a perspective on how the world will look when they succeed. For example, Michael Karnjanaprakorn’s mission with Skillshare was to make lifelong learning and upskilling accessible to anyone—giving people the agency to craft a career that inspires them.

The idea germinated when Michael saw this problem up close: he had graduated from UVA, but he really wanted to continue to pursue new interests. He didn’t see a place where he could stretch, grow and practice lifelong learning in a deep way.

Michael was sure a solution was already out there. When it wasn’t, he realized that if he had this problem, surely others did, too. It was time for a solution—not just for him, but for everyone. That led to his founding of Skillshare.

Sarah McDevitt founded Core after suffering a debilitating panic attack. Over the next few months, she tried many things, and the only thing that worked was meditation. But none of the options in the market made it easy. With something that requires such a regular routine, the phone apps just weren’t cutting it. As a D-1 basketball player, she always loved coaching teens and so she decided that she would build a meditation product that the most difficult customers—teenage boys and girls—could use easily and effectively. This ended up becoming Core.

David Lu arrived at Berkeley for his undergrad and was astounded that every day, he could look up and see a clear blue sky. When he was growing up in Shanghai, this was rarely the case. As he continued his undergrad, he met fellow students, some from other parts of the world, who were also surprised at how the Bay Area seemed to have such great air (back then) compared to other places.

They realized that the first step in fixing a problem is to know there is a problem. They decided to build the most accurate sensor that could measure air quality. As they installed sensors, they learned that when traffic increased, the air quality got worse. David wanted to empower people around the world with data about their neighborhood, companies about the air their employees were breathing, and cities with information on how they could keep their citizens safe. From this, Clarity was born.

For all these entrepreneurs, a mission was born of a problem they had some connection with and cared deeply about—one they wanted to solve for themselves and also for others. Not every story is just like these, of course. But if you’re wondering where missions come from, look around you.

Mini-Obsessions as Self-Care

Photo by bady abbas on Unsplash

This has been the most insanely difficult year. And that’s saying something, because a couple of years ago, I lost all my hair!

One of the ways I have tried to keep my sanity is by finding mini-obsessions. For me, a mini-obsession has to check two boxes:

  1. There are layers upon layers, and you can choose how deep to dive.
  2. The objects of obsession are relatively moderately priced. So no cars, or watches, or high-end anything.

The first mini-obsession that I picked several months ago was house plants of all sorts, including bonsai. I have never been able to keep a bonsai alive. Bonsai retailers should just rebrand to “we grow them, you kill them”—at least when they are targeting me with ads. And so I decided to actually take a mini-course on bonsai (and yes they exist, online of course).

My first bonsai was a jade, which I thought would be easy. And it was, until I decided to try to wire the bonsai to make it look like a “real” bonsai. I also decided to re-pot it with my newly found “skills” (what was I thinking?!). So, yeah… the lovely little tree is now a stump.

I then decided to hold off on the more advanced techniques of wiring and re-potting and got a lovely little Chinese Elm that is pre-shaped. All I have to do with this one is water it. So, fingers crossed. But during the course of this mini-obsession, I learned about bonsai, their history, the care (ahem), how to wire and shape them, how to water them, the differences between indoor and outdoor bonsai, and the various tools used to shape them.

Given my desire to not harm any more living creatures during the pandemic, I then decided to shift my focus to inanimate objects, where the most I could do was lose interest.

My friend Ellen told me about her shiny new mechanical keyboard, and the seed for a new mini-obsession was planted. Growing up, I used mechanical keyboards (b/c I’m old), but in the recent past, the joy of using one is something I’ve missed. And so it began.

As a Mac user, I found there were a relatively small number of keyboards that are made to work with the Mac out of the box. In this case, you get a piece of software to remap your keyboard. But after years of using the super-slim Apple bluetooth keyboards, I did not want to return to wired keyboards.

Voilà, the Keychron K2 was the perfect keyboard. The next decision was what kind of switches I’d want. Switches are the mechanism that lie under the keycaps and above the board. There are three versions, and I knew I didn’t want the super-loud clicky ones. So at first, I went with the linear Gateron reds. Lovely.

But soon, I realized that on some keyboards, the switches could be swapped out without any soldering. So then, I got the K6, which allows hot swappable switches. This time, I chose the tactile Gateron brown switches. But the whole world of switches was calling out to me. After getting a Gateron switch tester, I realized the ZealPC switches are even nicer than the Gateron ones, so… I had to get the tester for the Zeal switches. And then I fell in love with the Zilents, which are both tactile and relatively silent.

My K6 – removed the Gateron Browns and replaced them with the Zilents

So that’s mostly where I am, besides of course having ordered 2 amazing sets of keycaps (ABS, PBT, and Pudding are the major varieties) and a couple of custom keycaps, too.

Except, I have now realized that some of the keys, particularly the spacebar, backspace, and right shift key are not very silent, even with the Zilents. So, I’m off to learn about stabilizers, foam, lubing, band aids, and the like.

While looking into that, I came across this most beautiful video of someone rebuilding a K6 keyboard. The level of detail, the fantastic editing, and the sheer love is wonderful to watch. While the tests of the keyboard sounds before and after are aural ASMR, the whole video is ASMR for the soul.

I have no idea how long this pandemic is going to last, or how much anxiety the election will cause, but these mini-obsessions have given me a focus on learning in a sphere where there is no upside, no downside, no specific purpose besides curiosity and the desire to learn and relax. I love spaces where the more you dig, the more there is. There is also a joy in discovering a community that is passionate about something relatively obscure, seeing the love and work they put into sharing knowledge. In this particularly tough year, these obsessive learners, artists, and creators give me hope in humanity.

Gratitude to the Giants

Justice Ruth Bader Ginsburg at her confirmation hearing. Source: Wikimedia Commons

When Justice Ruth Bader Ginsburg passed, it hit me very hard. As I thought about why, I realized it’s because she fought for the things we now take for granted.

As Jennifer Rubin of the Washington Post tweeted:

So much of what I have accomplished would not have been possible if RBG hadn’t fought for herself and for everyone who deserves equal treatment.

While RBG’s influence is overarching, there are people in other fields who, by fighting for their chance to do the jobs they loved, fulfill their potential, or realize their view of a different world, created opportunity for thousands of people in the future.

In my own life, here are a few I’d like to stop and thank.

Sandi Sissel was one of the earliest female cinematographers. When she started, she couldn’t be in the union and she had to wear skirts to work. Skirts—for a cinematographer who might have to climb a ladder, or run along with an actor, or lie on the floor. But Sandi ignored the indignities and did exceptional work, making it normal for women to be fantastic directors of photography.

Lynn Reedy was CTO and the leader of the largest organization at eBay – all of engineering, product, and design. She wasn’t the “female leader.” She was the leader. Lynn and I have to thank Meg Whitman, who, back in 1998, became the CEO of eBay. And all of us have to thank Pierre Omidyar, who hired the best candidate to be CEO. The best candidate also happened to be one of the first women CEOs in tech.

In more recent news, Gavin Newsom just announced that in 15 years, no new gas cars can be sold in California. Every new car sold in California from 2035 on will be an electric car. It warms my heart that one of the people who made his possible is also one the nicest people I know, and someone I hold in very high regard: Marc Tarpenning, the co-founder of Tesla and a Venture Partner at Spero.

We are living through a period of great stress. California has been ravaged by wildfires and some dear friends have lost their homes. Americans have been devastated by the pandemic, shocked by the violence against our black citizens, and are worried about violence and chaos around an election. Stress and anxiety is off the charts.

During this insanity, taking a moment to recognize these incredible people gives me a sense of comfort. RBG, Sandi, Meg, Lynn, Pierre, and Marc. We stand on the shoulders of these giants—and one way of repaying them is to face the future unflinchingly, trusting in our values and our ability to move us all forward. And then doing the work necessary, like they did.


I’m going to take a break from publishing for a little while, but I’m looking forward to checking back in with you with some great stuff soon!

Misinterpreting “Mission”

Photo by Shaah Shahidh on Unsplash

At Spero Ventures, we’re a single bottom line venture fund: we measure ourselves by our return to our LP.

At the same time, our investment thesis is that we invest in the things that make life worth living: well-being, work and purpose, and human connection. That means we invest in mission-driven founders.

The idea that mission and profit can be tightly bound together is unfamiliar to some people. They ask one of two questions:

  1. How can you be a single bottom line investor and say you invest in mission-driven companies? You have to measure the “impact” the company is having with different impact metrics.
  2. Oh, so you invest in mission-driven founders—that means you’re okay with sub-commercial returns, right?

AAAARGH!!

The company, by performing its core function, should take you towards your mission. And if you have a mission, we believe you will be substantially more successful than if you were not mission-driven.

The words “core function” are doing a lot of work here.

eBay’s core function is to connect buyers and sellers to execute a transaction. By performing their core function, they are fulfilling their mission of enabling economic opportunity around the world. Every transaction on eBay contributes to the mission of giving buyers and sellers agency to live the lives they want.

Tesla’s core function is to manufacture and sell electric vehicles. By performing their core function, they are fulfilling their mission of accelerating the world’s transition to sustainable energy. Every car they manufacture and sell is making the world better by being one more car that uses clean power.

WhatsApp — does this seem like an odd one? It’s not. By performing their core function, they are fulfilling their mission of letting people communicate anywhere in the world, without barriers. Every text, video, and phone call on WhatsApp, whether across ten thousand miles or ten miles, is democratizing access to human connection by making it free.

In contrast, a company like Toms Shoes might be making an impact, but their core function is to sell shoes. The fact that they happen to give to charity is a nice-to-have — it’s not part of their business model; it’s a marketing tactic. They are not a mission-driven company even if they use marketing language about “improving lives.”

Mission is not off to the side. It’s the very heart and soul of the company. It’s the product, it’s the marketing, it’s the company.

And because mission is core, the bottom line is the only thing you need to measure. Tesla doesn’t measure impact separately from its bottom line, because having more Teslas on the road is the impact. At a mission-driven company, when people buy and use your product, your bottom line is going to grow, and there’s a direct connection from mission to the bottom line.

At a true mission-driven company, the business model itself makes life worth living. And we believe those companies have the highest chance of success.

Here are three companies from our portfolio that exemplify this:

Skillshare’s core function is to allow teachers and learners to connect around their creative passions. By performing their core function, they fulfill their mission of inspiring and multiplying creative exploration that furthers expression, learning, and application.

Gencove’s core function is to extract valuable genetic information through low-pass sequencing. By performing their core function, they fulfill their mission of making whole genome sequencing a bedrock of decision making by making it accessible and accurate.

Core’s core function is to get people to stick with consistent meditation and mental health practices. By performing their core function, they fulfill their mission of cementing mental well-being as a pillar of our lives.

Mission can be very beneficial to your company:

  • Your mission is your north star for decision making. Any time there’s a big strategic question, asking yourself whether it takes you towards or away from your mission can help you answer it.
  • It attracts people who believe in the mission: whether it’s co-founders or employees, these are people who are also driven by wanting to see the world be different and to have a direct hand in making this company come to life. It has some side benefits where you don’t have to pay them big company salaries in order to attract them because they are passionate about what they are building and will be more than a cog in the wheel of a large enterprise.
  • Every startup is a rollercoaster. Regardless of how much we want to believe it’s all up and to the right, there will be moments of intense stress and existential angst. When everything is going to shit, you can hold on to your mission and know why you are doing this and use this to motivate yourself and everyone at the company.
  • Customers have started to care about which companies they patronize. If you think about your customers as co-creating the company with you, they will become part of your “cult”.
  • Board of directors: If you’ve had a choice on who funds you and who joins your board, then you could pick investors and directors who are aligned with your vision of where you want to go and what you want the company to become. A clear mission gives you a stronger way to unify them. This is important since they can have a big influence on the strategic choices you make.

At the same time, it’s important to know the place and role of mission in the company.

A great mission without a great business model means very little. Do you have an exceptional business model? At the end of the day, this is the most important aspect of any company. If your business model doesn’t work, the company is going to fail.

This means you shouldn’t put mission ahead of money. They walk hand in hand: If you don’t have a good business model and cannot generate money to survive, you will go out of business. If you go out of business, you won’t accomplish your mission. Game over.

I’ve seen some mission-driven founders treat making money like it’s a bad thing, or making the mission primary and delaying coming up with a revenue-generating model that is sustainable. Mission and business model have to be developed in concert. Fulfilling your core function should generate revenue and move you towards your mission.

In pursuit of that successful business model, you may need to redefine your mission—or achieve it in a creative way. “Purity” of the mission is a false god. You can keep your priorities intact while changing what you do about those priorities. Much like how a film is rewritten when it’s edited, the details of your mission will morph as you find the best way forward.

So ask yourself: Do I care enough about this mission to work hard for the next 10 years? Missions are motivating. Companies are slogs. There is no company that just grows “up and to the right.” Most are nauseating rollercoasters where the highs hopefully compensate for the lows.

But, if you have a mission, with a fantastic business model, where the core function of the company is going to make life worth living, then that is a jewel.

Founder-Market Fit Matters More Than Ever

Photo by Tekton on Unsplash

These days, practically anyone can start practically anything. If you have a sliver of pedigree1, like experience at a reputed company, it becomes even easier.

But as tech permeates everything, people are starting companies in industries they don’t know. In other words, they’re founding companies as outsiders, without strong founder-market fit.

And that’s fine. A fresh perspective is often a huge help. But many industries are complex. The incentive structures, local laws, and nuances about who wins and loses are not obvious from the outside, or even after several conversations with those in the industry. Today, there are over 1,000 seed funds—capital is flowing freely. You will get funded, but that doesn’t mean you’ll find product-market fit, and then get to scale. At any given time, there may be 5-10 companies tackling a similar problem. This is where a founder’s knowledge or experience in the industry is a real advantage.

As my colleague Jonathan Kroll put it:

“The bar has never been lower to build a product. 10 years ago, you’d need millions in investment to have some sort of rudimentary machine learning or computer vision capability. Now, this is all off-the-shelf.

This is amazing! Right?! Well yes, it is—but as a result, building a cheap product with amazing functionality is at everyone’s fingertips. So while amazing products with amazing features could have been the major source of differentiation in the past, today, that’s just not enough.”

Founder-market fit is an advantage because:

  • These founders get to asking the right questions quickly.
  • If they don’t know the answer, they know who to call in the industry to get the answer.
  • “Founders who know exactly what their market needs,” in terms of leverage to move the needle, “might meet those needs faster and in a more capital-efficient manner, therefore extending runway and giving themselves more time to experiment,” said my colleague Sara Eshelman.
  • They understand the incentive structures, and so know how to position their company in the most appropriate (read: unthreatening and helpful) manner to the relevant constituents.
  • They know local laws and where they can push and where they can’t.

Founder-market fit is not developed only by having worked in the industry. You can also be obsessed with a problem in that industry and immerse yourself in it before you find a solution that works.

One example of this is Filip Victor. Filip is the founder of our portfolio company Mati, which is focused on identity verification. He came to the US as a student and faced the challenges of an immigrant: not being able to get credit and not being able to verify his identity with many of the commercial entities that you need to live a life with agency. This led him to spend time learning about the space to try and solve the identity verification problem for people in the developing world.

Another example is David Zamir at Nana. During a tough moment in his life, he taught himself to repair appliances, going out to customers’ homes to fix their washing machines in order to have an income. This led him to create an appliance repair marketplace that trains technicians and enables them to craft their own livelihoods.

Founder-market fit is real when a founder knows enough of the market to see a real opportunity, while knowing how hard it’s going to be. At the same time, founders need to have a bit of rebellion, a bit of chuztpah, a bit of “fuck it, this may really work,” a bit of willingness to upset former colleagues, boldness, and the ability to envision how things could be. That’s when they can take the leap and build a company that could be amazing.


  1. This is a problem and it is exclusionary, but it is also how the world currently works 

Brave Space

The poem, An Invitation to Brave Space, was shared during Back To School night last week, and everything about it resonated with me.

I’ll call out the three sentences that spoke the most to me and why.

Together we will create brave space

By the very fact that we live, we collect baggage. Proof of life is found in your scars. Never all good, never all bad, but sure to happen. Physical, mental, emotional. And instead of shielding ourselves from the things that make us who we are, we show up with them, bravely.

We have the right to start somewhere and continue to grow

Authentically looking at yourself, figuring out where you are on all spheres, accepting it and determining where you need to grow is the most important thing anyone can do.

To do it well, we have to recognize that none of us know everything. And to learn and grow, we have to be willing to learn from those whose voices we don’t hear all the time.

I wrote a short tweetstorm about how creators need to turn down the volume of the outside world. It’s important to be able to hear your own voice to figure out who you really are.

We will work on it side by side

Nothing is ever perfect. What matters is the willingness to commit to your teammates and colleagues, to commit to moving things forward. To work towards a more accepting, demanding, understanding, exceptional, constantly improving space. Together.

Who are you?

Photo by Jyotirmoy Gupta on Unsplash

Every August, US filmmakers rush to make the Sundance Film Festival deadline. And in early December, Sundance announces its lineup. The day before, everyone is equal—all aspiring filmmakers. But the moment Sundance announces, the wheat is separated from the chaff. There are those who will have a film that “premiered at Sundance,” and… there are the other mere mortals. Both groups will now be treated differently as expectations start to diverge.

While companies are less of a lemming-like march to the cliff than film festival applicants, similar rules apply. After a company goes down in flames, or after you get fired, the same thing happens. The very next day, there’s a sense that you’re a different person.

In both cases, I see a similar pattern: people define themselves (and each other) in terms of their successes and failures. But both success and failure are transient and ephemeral. They can both be taken away, forgotten, or overcome. Successes and failures aren’t who you are.

Perhaps, instead of letting successes and failures define you, define yourself according to something no one can take away, something you cannot lose.

If you can lose your job, you are not your job or your job title. If you can lose company, you are not your company. If you always need permission to create or make a film, you are not a creator or filmmaker.

A couple of years ago, someone asked me if I would view myself as a failure if I failed at my job as a venture investor. My answer was yes. I explained that my job is a huge part of who I am, and if I fail at it, yes, I would be a failure.

Since that conversation, I’ve come to a more nuanced view of the world. I wouldn’t say to a founder, “If your company fails, you are a failure.” Quite the opposite. You are not your company, and regardless of whether you took it public or closed it down, you are separate from the entity that is your company.

So, if not by those ephemeral things, how can you define yourself?

  • Instead of defining yourself according to your job description, you can think about characteristics like persistence, compassion, and thoughtfulness.
  • Instead of defining yourself according to successes and failures, you can look at the chances you choose to take. There are second chances, there are third chances—but they only exist if you don’t give up on yourself, and if you actually take them.
  • Instead of defining yourself according to your ego, you can think of yourself as someone who’s always learning.
  • External validation is the bane of humanity. Fuck external validation.

Despite the transience, we let success and failure have such a huge impact on us. Depending on how we deal with it, they can change our life trajectories. But these things still aren’t who we are. Who you are is the amalgam of personal characteristics that make you up. It’s what you learn from success and failure. It’s how you deal with it, and what you go on to do with it. That’s what no one can take away from you, and that’s what makes you who you are.

Momentum vs Conviction

Photo by Brendan Church on Unsplash

Among the many reasons why it is challenging to be a founder, there is this quirk of the venture business — there are a lot of investors, and it is tough to figure out who is the right one.

One axis of the decision-making model is what I think of as Momentum vs. Conviction.

One way you can identify the momentum species is if they ask the magic question: “Who else is in the deal/round?”

Momentum investors are driven by the trend du jour. They often show up when:

  • The round is oversubscribed and the company operates in a “hot” space
  • Participating in the round will allow the investor to be part of an “in group” of “top tier” VCs
  • The investor missed the last hot company in this space and is prepared to do anything to get into the next one (this is one sad reason VC bubbles form)
  • There’s a great/famous VC leading the round
  • A great/famous VC led the last round

It seems obvious that this isn’t the kind of investor a founder wants. But in the moment, it is really difficult to say no to someone who is persistent, especially when you’ve been laboring away at your product on starvation wages for years. The attention can also be fun. For the moment, everything’s great, you’re hot, and dollars are flying at you. 

The question in your mind may be: So what? What if they’re in the company for the wrong reasons?

The answers unfortunately only emerge over time:

  1. In future rounds, they will be unable to come to a decision on whether or not to fund you based on how you’re actually doing. They seek external validation from the market and cannot think through the nuances to figure out where the market is going and how you can play a role in the market
  2. Their term sheets can often cause trouble. If the deal is hot, they may overprice it (and then later yank or revise it if the deal cools). High prices driven by the perception of being “hot” can often lead to downstream issues in future rounds (but that’s a whole different post).

Momentum isn’t the only way to make investing decisions. Someone could also invest in your startup based on the conviction that your company represents the best approach in a space they understand and care about. Here are some of the signals of conviction investing:

  • They want to learn about the company and the space
  • They admit when they are learning and how much time they need
  • Rounds can move fast, but these investors will want to do the work to get to comfort regarding the industry, the company, the founder, and all open issues
  • They almost never ask the dreaded question “who else is in the round”, because they’re basing their decision on their work.

It’s fantastic to be a hot company, but if the music stops, and if you cease being the next hot thing — you want a conviction investor at the table with you.