There are two broad ways to invest early: back many companies lightly and hope a few succeed, or back fewer companies with real conviction and work closely with each one. I’ve come to prefer the second.
Conviction comes from understanding
I invest in markets where I’ve worked or spent years studying. That lets me judge a team’s insight on its merits instead of relying on who else is investing. When I don’t understand a market, I say so and pass, even on companies that go on to do well.
It changes the relationship
When I’ve committed seriously to a company, I’m more useful to it. I know the business well enough to give specific advice, I’m more willing to help in a crisis, and founders know I’m not going anywhere.
Conviction isn’t stubbornness
Being convinced at the start doesn’t mean ignoring new information. I write down why I invested, then check it every few months. If the reasons stop being true, the right move is to say so honestly, to myself and to the founder.
Most of the work is saying no
Concentrating means turning down good companies. That’s uncomfortable, and it’s the part of the job I find hardest. But a portfolio of companies I believe in deeply has been easier to support, and more rewarding, than a long list I barely know.
A question I ask before every check
Would I still want to own this in ten years if the next two years are harder than planned? If the answer isn’t a clear yes, I wait.
