Do venture firms share information about founders across firms in ways that hurt founders?

Brad Gerstner · Oct 10, 2022

The last 12-24 months of price indiscipline in venture was a great disservice to founders and the worst example of the industry's lack of discipline, driven by lemming effects and groupthink.

Behavioral economics documents the lemming effect and groupthink, and this industry — including his own firm — got caught up in it.

Scope: he concedes his own firm got caught up in it too

18:45 20VC: Altimeter's Brad Gerstner on Why Supercycles and the Powerlaw is the Most Important Thing In Investing, Why Portfolio Diversification is the Opposite of Risk Mitigation and The #1 Question Brad Asks All New Recruits

Brad Gerstner · Oct 10, 2022

The most common investment mistake is groupthink — following others into deals because they did them rather than doing your own work

The behavioral psychology of groupthink is very powerful and hard to resist; young analysts, associates and partners in Silicon Valley are filled with FOMO

Scope: most pronounced among junior investors in Silicon Valley

61:48 20VC: Altimeter's Brad Gerstner on Why Supercycles and the Powerlaw is the Most Important Thing In Investing, Why Portfolio Diversification is the Opposite of Risk Mitigation and The #1 Question Brad Asks All New Recruits

Bastian Lehmann · Apr 8, 2024

99% of VCs are sheep rather than idiots — most are echo chambers for whatever the creed of the moment is, and very few actually understand where things should go and where the opportunities lie

Herd thinking is self-informing and is enough to be somewhat successful, and there's a strong desire among VCs not to bump around the edges; being different and having to convince people is hard

Scope: he revises his earlier 'idiots' framing to 'sheep'; based on the VCs he personally knows

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Mark Goldberg · Oct 25, 2024

The thing most in need of changing in venture is groupthink; the industry needs more independent thinking because groupthink is bad for founders

Venture gossip travels faster than anything else in the industry, as captured by a meme comparing a cheetah, plane and rocket ship to how fast information moves between associates

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Harry Stebbings · Oct 25, 2024

Founders are now effectively always fundraising, because WhatsApp groups let associates broadcast negative reads on a company instantly and can damage a raise before it even starts

Associates can rapidly tell large groups things like 'I met him, he wasn't great, and they're not even at $500k ARR, so we turned it down'

49:13 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 · Nov 21, 2025

Speaking to funds sporadically is founders' biggest fundraising mistake because associates and junior partners share negative reads in WhatsApp groups that poison 20 other funds

Junior investors circulate 'met them, not growing fast enough, easy pass' messages across firm channels, which is seriously detrimental

Scope: describes Europe especially

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Harry Stebbings · Jun 20, 2026

Founders should never 'test the market' with one or two exploratory investor meetings

Associate WhatsApp groups circulate weekly roundups across firms; a lukewarm meeting gets you written up negatively and that follows you

Scope: acknowledges this advice is against his own interest as an investor

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Mark Goldberg · Oct 25, 2024

Companies need to be very cognizant of the dynamic where investor gossip networks shape their fundraise

49:35 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 · Jun 20, 2026

VC associates are more in business with their peer class across firms than with their own firm, because their real competition is the other associates inside their firm

They need to bring differentiated deals to get ahead internally, so they trade referenced deal intel with associates at other firms

59:33 20VC: Why Remote Work is White Collar Fraud | Why Revenge and Patriotism are the Best Founder Traits | Two Questions Every Founder Needs to Ask | The Wild Story of Raising $1BN from Masa Son in an Hour Long Meeting with Ryan Peterson, Founder @ Flexport

Ryan Petersen · Jun 20, 2026

There is far more information-sharing and collusion among VC funds than founders realize, and it generally works against founders

When he told one investor he was going elsewhere, three other funds called within an hour; founders need an outlier who values them more than everyone else, and shared signals suppress outlier pricing

57:45 Cross fund signal sharing suppresses outlier pricing