Should venture investment diligence be conducted collectively by the entire partnership, or delegated to the deal-owning partner and associates?

David Tisch · Feb 5, 2024

Every investor on a seed team, including junior members, should be able to unilaterally say yes without votes or consensus-seeking

Conviction has to operate in your gut, and he would rather listen to one person's genuine excitement than manufacture firm-level groupthink

Scope: describes his own nine-person firm's practice

34:30 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

David Tisch · Feb 5, 2024

The one or two people actually spending time on a deal should make the decision; seed investing cannot operate at firm level on consensus, groupthink or safety

Great decisions happen at the edges, and team members get excited about different people and spaces

35:30 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

Trae Stephens · Apr 3, 2024

Domain expertise should be pulled in ad hoc from the partners who know a sector best rather than through a standing process, with the firm ultimately backing an individual partner's conviction

You always bring in whoever is necessary to reach the best decision, but the decision rests on whether the sponsoring partner will put their reputation and career on the line, and the firm supports that bet on the person

19:08 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything

David Cahn · Aug 5, 2024

The hardest part of venture is not identifying good companies but deciding when to put your neck on the line for one; conviction is the scarce thing and cannot be outsourced or given to you

Advice and learning are available, but in the partner meeting you personally have to stake your reputation, and good partnerships are designed to test conviction that way

50:44 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI

Mark Goldberg · Oct 25, 2024

Early-stage firms should use a single-trigger decision model rather than consensus, because consensus decision-making produces consensus funds and errors of omission

Outliers come from deals where one or two people have extremely strong conviction; opening the aperture yields more losers but also captures the extreme winners

Scope: specific to early stage

40:22 20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry

Taavet Hinrikus · Apr 28, 2025

Not every partner needs to meet a founder before a deal; individual GPs should be trusted to lead their own investments

The bar for becoming a GP is very high, so it makes no sense to hire someone brilliant and then require them to ask permission to do a deal

Scope: the deal still goes through a brutal IC discussion for feedback

27:53 20VC: VCs are Spreadsheet Monkeys and are Commoditised | Why Fees and Carry Misalign GPs and LPs | Why Founders Will Realise Multi-Stage Funds Damage Seed Rounds | Why We Need European Sovereignty More Than Ever with Taavet Hinrikus

Julien Bek · Aug 24, 2026

The sponsoring partner retains the decision even against negative partner votes, but doing so against strong dissent carries career risk if the investment fails

The votes are information to equip the sponsor; overriding them means owning the outcome

Scope: said semi-jokingly about how long you'd stick around

27:32 20VC: Inside Sequoia's Investment Committee: Lessons from Don Valentine, Doug Leone and Alfred Lin | How the SpaceX and Citadel Deals Went Down | What Sequoia Specifically Looks for in Founders with Julien Bek

Harry Stebbings · Mar 17, 2023

Investment committees are among the most inefficient decision-making processes in existence

In large general partnerships, partners from unrelated domains weigh in on deals they don't understand, knowing only the benchmarks and having met the founders barely once

15:37 20VC: Why Growth Investors Ruined the Venture Market, Why Marketing in Venture Has No Substance, Why Follow-On Investing Can Damage Returns and The Mistakes VCs Made in the Last 18 Months with Ophelia Brown, Founder @ Blossom Capital

Ophelia Brown · Mar 17, 2023

Investment committees should be abolished; partners who come to a deal fresh for forty-five minutes cannot judge it, and the IC format creates a political environment

A subsection of the team spends an enormous amount of time with a company and builds a thesis, which other partners then assess in under an hour despite how much goes into building a business

Scope: Blossom did away with the IC

15:51 20VC: Why Growth Investors Ruined the Venture Market, Why Marketing in Venture Has No Substance, Why Follow-On Investing Can Damage Returns and The Mistakes VCs Made in the Last 18 Months with Ophelia Brown, Founder @ Blossom Capital

Mark Goldberg · Oct 25, 2024

Making consensus decisions at the early stage is the biggest mistake a firm can make because you end up with a consensus fund

Consensus decision-making filters out the non-obvious bets, producing a portfolio of consensus companies

Scope: specific to early-stage decision-making

0:00 20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry

Harry Stebbings · Mar 10, 2025

Having every partner participate in reference calls is a strange and inefficient way to run diligence compared with the normal model where the deal owner does the work and brings it back to the partnership

Scope: stated as a provocation to Jake

28:00 20VC: Lessons from Investing $2BN and Returning $8BN in Cash | Why Most Venture Partnerships are Broken | We Sold Salesforce Early and Lost Out on Billions | Are The Best Deals Always Expensive and Competitive with Jake Saper @ Emergence Capital

Harry Stebbings · Jan 6, 2025

Delegating follow-on decisions loses crucial context, because the deal partner knows the founder and the nuances like speed of contract progression that never show up in the data

Much of what predicts a company's trajectory is tacit knowledge held by the partner closest to the founder, not in the numbers

9:59 20VC: How To Do a 10x Seed Fund in 2025 | Three Frameworks to Evaluate Startups an Founders | Lessons from Losing Billions Missing Airbnb and Pinterest & Investing Lessons from Charlie Munger with Mike Maples @ Floodgate

Jake Saper · Mar 10, 2025

On reserve decisions the deal sponsor's judgment should carry more weight than on initial checks because they are far closer to the company

The sponsor is much closer to the situation, so the partnership trusts their judgment more

72:29 20VC: Lessons from Investing $2BN and Returning $8BN in Cash | Why Most Venture Partnerships are Broken | We Sold Salesforce Early and Lost Out on Billions | Are The Best Deals Always Expensive and Competitive with Jake Saper @ Emergence Capital

Jake Saper · Mar 10, 2025

Because sponsors carry real emotional investment and bias in 'keep it alive' reserve situations, hard inside rounds should require the founder to present to the full partnership so the sponsor's view can be checked

Every reserve situation differs; pro rata into a strong Series B is straightforward, but Series C inside rounds need the whole partnership up to speed to poke and prod at the story

Scope: applies mainly to keep-it-alive and inside-round situations, not straightforward pro rata

72:40 20VC: Lessons from Investing $2BN and Returning $8BN in Cash | Why Most Venture Partnerships are Broken | We Sold Salesforce Early and Lost Out on Billions | Are The Best Deals Always Expensive and Competitive with Jake Saper @ Emergence Capital

Larry Aschebrook · Jun 16, 2025

Trying to become a traditional fund — dividing capital among many partners and lengthening the thesis to seven years — was a mistake for G Squared, whose real model is hedge-fund-like fast decisions by two PMs

Success and LP demand for MOIC and TVPI made them believe they were more than the two co-PMs; in reality they deploy capital between themselves with a research team supporting quick decisions

Scope: specific to G Squared's model

38:31 20VC: How We Made $800M on Coursera | We Lost Money on Uber and Made Money on Lyft | We Did 3x on Postmates in 18 Months | DPI is King, MOIC is BS | We Dodged Theranos and I Still Lost Millions with Larry Aschebrook @ G Squared

Larry Aschebrook · Jun 16, 2025

If he could replay 2020 he would have waited and kept deployment control tight to himself and Spencer rather than distributing capital to teams

With only two decision-makers there are no excuses and it is clear who made the mistakes, versus a Silicon Valley model where wins get attributed to individuals

46:34 20VC: How We Made $800M on Coursera | We Lost Money on Uber and Made Money on Lyft | We Did 3x on Postmates in 18 Months | DPI is King, MOIC is BS | We Dodged Theranos and I Still Lost Millions with Larry Aschebrook @ G Squared

Harry Stebbings · Aug 11, 2025

An even distribution of value creation across a venture partnership is genuinely rare; concentration of value in a few partners is the norm

73:12 20VC: Figma, Scale, Wiz: Inside Index's Decacorn Factory | Decision-Making, Investment Process, Biggest Lessons, Biggest Misses | Why Gross Margin is a Fallacy at Seed | Never Turn Down a Deal on Price with Martin Mignot, Partner @ Index Ventures

Miles Grimshaw · Sep 18, 2023

Because Benchmark is an equal partnership, a founder effectively gets the whole partnership rather than just their board member, even though one person holds the principal relationship.

No partner is incentivized to help one company more than another, so partners constantly pull each other into current and future investments

Scope: one person still takes the board seat and holds the dominant relationship

30:32 20VC: Benchmark General Partner, Miles Grimshaw on The Five Pillars of Venture Capital, Why Data Can Be a Trap When Early-Stage Investing, Investing Lessons from Missing Figma and Plaid & The New Business Model for AI & Why Co-Pilot is an Incumbent Strate

Sarah Tavel · May 6, 2024

An equal economic partnership makes a venture firm genuinely team-oriented, so any single partner's investment becomes the whole partnership's investment and can be pursued as a collective effort

Because every partner shares equally in the economics of any partner's investment, there is no incentive to compete internally and everyone is motivated to help win and support each deal

Scope: describes Benchmark's model specifically

40:24 20VC: Benchmark's Sarah Tavel on Are Foundation Models Commoditising | Why Frontier Models Will Be Closed Source | Why the Value is in the Application Layer | The Future of AI is "Selling the Work" Not the Tools

Harry Stebbings · Jan 20, 2025

There is always a reason to say no to any company — some cohort, conversion rate or retention metric will always look bad

45:03 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji

Hussein Kanji · Jan 20, 2025

Objections that are unfalsifiable gray-zone judgments (e.g. 'that founder won't hire well') should not block a partner's deal — the partner should be given the rope

There is no null hypothesis to disprove in those cases, unlike a concrete missed data point which the firm has the humility to concede

Scope: hard data flags like deteriorating cohorts are treated differently

45:15 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji

Harry Stebbings · May 8, 2023

Investors should personally take references and do the digging rather than delegate it.

Only by doing it yourself do you hear the tone change that says enough without saying everything, and feel the full experience of the diligence.

65:31 20VC: Why VC Subsidizes the Wrong Type of Business, Why Capital Gains Tax is Crazy, The Biggest Misalignments Between VCs, Founders and LPs, Why Business Model - Product Fit is as Important as Product-Market-Fit with Chris Paik @ Pace Capital

Harry Stebbings · Mar 10, 2025

One of the biggest mistakes firms make is delegating reference calls to associates, because the signal lives in tonality, pauses and facial expressions

Venture is a human business and the important information in a reference call is non-verbal or para-verbal

Scope: not a criticism of associates as people

32:50 20VC: Lessons from Investing $2BN and Returning $8BN in Cash | Why Most Venture Partnerships are Broken | We Sold Salesforce Early and Lost Out on Billions | Are The Best Deals Always Expensive and Competitive with Jake Saper @ Emergence Capital

Terrence Rohan · Feb 5, 2024

Group decision-making is the wrong way to make seed investments because partnership voting optimizes for consensus and safety and rounds the edges off day-zero companies

The decision science of law-firm-style partnerships optimizes for consensus; seed picking is instinctual and intuitive, and the x-factor you see in a founder is hard to articulate to a group

Scope: allows group decisions may be smart and valuable at Series B

33:30 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

Terrence Rohan · Feb 5, 2024

Conviction in early-stage startups is empirically weak and fragile, so voting mechanisms and group meetings — explicitly or through cultural norms — crush it; firms should instead empower individuals to make instinctual, even slightly unreasonable, decisions

Any early idea can be rationally destroyed (low margins, etc.), and startups are as fragile as early ideas

37:52 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

Taavet Hinrikus · Apr 28, 2025

Follow-on/reserve decisions should require a collective majority vote of the partnership, unlike first checks which the lead GP owns

Otherwise the lead investor is marking their own homework, and reserves are a finite allocation that must be divided across the portfolio, so they need collective input

31:27 First checks are sponsor led but follow on reserves require partnership vote

Mike Lazerow · Aug 2, 2021

Requiring unanimity across partners, with no individual partner's deals, weeds out investments a firm shouldn't make

You first have to convince yourself and then convince everyone else, and that debate process filters bad deals

16:01 Requiring partnership unanimity filters out deals that shouldnt be made

Harry Stebbings · Sep 6, 2023

Claiming a firm does no deal attribution is somewhat disingenuous, since whoever takes the board seat is effectively credited with the deal

Everyone reads the board seat as ownership of the investment

31:08 Board seat assignment functions as de facto deal attribution despite claims of no attribution

Nikhil Basu Trivedi · Sep 6, 2023

Both partners attending every board meeting and sitting on every founder text thread in year one is the purest form of teamwork, and most venture firms claim teamwork without actually showing up as a team

Their complementary skills benefit founders, and operating this way keeps them from treating any decision as an individual one

31:23 Co attendance at every board meeting embodies genuine collective partnership though unscalable

Nikhil Basu Trivedi · Sep 6, 2023

Making investment decisions based on which partner is best at selling internally, with political points traded across the voting system, is a terrible way to decide

Some people are naturally more gifted at selling deals internally, so outcomes track persuasion rather than company quality, and much dysfunction bleeds out of that selling process

32:13 Internal political persuasion skill corrupts investment decisions more than company merit

Martin Casado · Dec 5, 2022

Senior venture partners get more credit than is due, and the industry should attribute deals more equitably to the team that did the work

Attribution matters for team members' careers and for outsiders understanding where the value actually comes from; the a16z infra team, not a Martin Casado brand, is the accurate description of reality

40:56 Deal credit is overconcentrated in senior partners and should be attributed to the whole team

Trae Stephens · Apr 3, 2024

The more process a venture firm has, the easier it is to game that process into mediocre outcomes, so firms should make it deliberately hard to get a deal through

In a process-driven firm a deal escalates from junior to partner to Monday meeting on lukewarm interest and ends in a participation check written just because it survived the pipeline; with no structure, only personal willpower and table-pounding conviction can push a deal through

17:26 Heavy process enables mediocre deals so firms should make approval deliberately hard

David Tisch · Feb 5, 2024

Allowing negativity into internal firm discussions reduces variance in outcomes and pushes a firm to play safe, which does not work at seed

A loud 'grenade' no forces excited investors into disproportionate pushback, which is where group rather than best decisions get made

38:48 Allowing negativity into discussions biases decisions toward safety

Julien Bek · Aug 24, 2026

Votes should be transparently attributed within the partnership so investments are firm investments rather than individual partners' deals

Company building requires any partner to be willing to spend their own cherished relationships on the company, which only happens if it's collectively owned

28:18 Attributed votes make it a firm investment not a partners deal

Jake Saper · Mar 10, 2025

A narrow thematic mandate — only B2B software, forever — is what makes it possible for an entire partnership to do the diligence work collectively on every deal

Because everyone does the same kind of work in the same category, the team is uniquely able to invest collectively rather than in silos

28:22 Narrow thematic mandate enables effective collective partnership diligence

Jake Saper · Mar 10, 2025

A collective truth-seeking diligence process produces better decisions than the standard firm model where an associate and a partner do the work and then defend the deal against an onslaught of doubters

When every partner has made reference calls, spoken to customers and done on-site visits, the 'what you have to believe' sheet is built from many people's first-party data, and partners can compare nuances like a customer sounding wishy-washy rather than one team defending a thesis

30:44 Collective truth seeking diligence beats the defend the deal model

Jake Saper · Mar 10, 2025

A whole-partnership diligence model lets a firm complete far more diligence in a compressed timeline than a one- or two-person process, even though it costs coordination overhead

Seven partners plus principals and associates can run seven diligence calls in the same time slot with one 'quarterback' synthesizing, so an enormous amount of work fits into a single day

33:20 Whole partnership model completes more diligence faster despite coordination cost

Martin Mignot · Aug 11, 2025

The partner who has spent the most time with a team is best placed to make the judgment call on that team, so the partnership should extend collective trust and latitude to them

Proximity to the founders gives better judgment, and the firm has a bias to action

24:37 Proximity based trust not collective committee decides

Martin Mignot · Aug 11, 2025

Index is a genuinely equal partnership with no CEO or managing partner, and decisions are made collegially

Both performance and responsibility are spread across the partnership — the eight companies driving the largest share of returns involved seven different partners

72:00 No ceo fully collegial partnership spreads decision ownership

Marc Andreessen · Mar 30, 2026

Ben and Marc almost never weigh in directly on investments a partner is working on, and difficult challenges should be delivered one-on-one rather than in public

They want to avoid the warping effect of their seniority, they lack the partner's knowledge, and public challenge adds perceived social pressure

62:25 Founders abstain so seniority does not warp the sponsors call