How should investors respond to and learn from investments they missed?

Frank Rotman · Aug 26, 2021

Many of the biggest companies investors pass on are survivor-bias outcomes: their eventual business looks nothing like the original thesis, so they were genuinely un-underwritable from the information available at the time

Talented founders in large under-addressed markets sometimes discover paths that were not visible at the moment of underwriting; reviewing the original decks shows the final business bore no resemblance to the initial thesis

Scope: applies to investors who underwrite based on available information

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Adam Besvinick · May 29, 2023

His struggling investments failed on risks he had already identified and consciously underwrote, not on things he missed

Every investment memo ends with a risks-and-mitigants slide, and going back to it shows the problems keeping him up at night were acknowledged at the time and assumed to be mitigable over the company's life

Scope: as of 2023 and this particular set of companies; may change over time

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Akin Babayigit · Jun 26, 2023

Deep domain expertise is not a liability for an investor; missed deals are an unavoidable part of investing

There is always a reason at the time for passing; you should learn from misses but not beat yourself up over them

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Terrence Rohan · Feb 5, 2024

The real investing failure worth beating yourself up over is deviating from your own style and principles, not missing a company while playing your game correctly

If you play the game the way you believe it should be played and miss, that's acceptable; getting caught up in a round and investing untrue to yourself is not

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Semil Shah · Nov 21, 2022

Passing on OpenSea was his biggest miss, and the lesson is that failing to understand something is not a reason to skip it when the numbers show it working

He'd seen the deal three times, had the numbers in front of him, thought it was just about gaming, and let it go at a $28M post because he didn't understand it

Scope: acknowledges OpenSea's ultimate outcome is still unknown

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Harry Stebbings · Nov 21, 2022

Investors overthink deals; you don't always need to understand a product, you can just go where it's working and customers love it

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Mike Maples · Jan 6, 2025

The productive response to a miss is to systematically diagnose what you failed to see and test whether today's frameworks would have produced a yes, not to beat yourself up

He runs 100-bagger deep dives on companies like Marqeta and Zoom, tracking what multiple, speed and dilution a seed yes would have produced, and checking them against three frameworks: insight, inflection, and founder future fit

35:34 Systematic post mortems on misses improve future decision frameworks

Chris Sacca · Oct 11, 2021

Fixating on the worst-case scenario caused him to miss Airbnb; the more useful default is that most humans are good and such services obviously work

He warned the Airbnb founders someone would get raped or murdered and let that bad case obscure the obvious case that most people are good and the service would work

10:47 Fixating on worst case scenarios causes good bets to be missed default assumption of human goodness works better

David Tisch · Feb 5, 2024

The no's an investor should most regret are the recent ones they can't yet identify, not the famous historical misses

63:32 Regret recent unidentified misses not famous historical ones