Among a startup's inflection/timing, the founder's non-consensus insight, and founder-future fit, which signal should investors weight most heavily when deciding to invest?

Wesley Chan · Aug 22, 2022

The core investment judgment is whether the founder is capable of morphing the company and product into something far bigger, not what the product is today

What you see today is never what the company will be in one, two, five or ten years if the founder has a true vision; judging Tesla on the Roadster would have led you to pass because you couldn't picture a $30,000 Model 3

Scope: calls it his biggest lesson from ten-plus years of investing

32:54 20VC: Why Market Always Wins Over the Founder & Why I Do Not Do Market Sizing | Why it is not the Best Time to be Investing but it is the Best Time to Have a Fund & The Type of Deals to do Today | Why The Best Founders Have 100 Year Plans with Wes Chan, C

Mike Maples · Jan 6, 2025

Of the three signals (inflection, non-consensus and right knowledge of the future, founder future fit), founder future fit is usually the best and most discernible signal at the moment you have to decide

The 100-bagger studies show insight and inflection often only become clear later, so you need a time capsule of what was knowable at the time, and founder future fit is the most reliable read on whether the founder will figure it out

Scope: conditional on the founder already seeming great

37:57 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

Mike Maples · Jan 6, 2025

Almost every great startup pursues a future that is meant to be and usually one team is ideally suited to it, so the test is whether this is the team most likely in the world to make that future real fastest

Founders living in a valid future and intrinsically motivated by it are more likely to notice specifically what to build and more credible at attracting early believers

38:56 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

Sarah Tavel · May 6, 2024

The pointedness and reality of a company's 'why now' is the most important thing she has learned to evaluate in venture

A real why now acts like a strong current pushing the company forward, so the company can survive making mistakes during hyperscale; without it founders paddle hard and make little progress

Scope: why now can be a technology catalyst or another current, not necessarily a trend

7:16 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

Sarah Tavel · May 6, 2024

Absent a 'why now' catalyst (a trend or an enabling new technology such as AI), pursuing merely a new idea in an existing market is a force of will and very difficult for creating surprisingly big opportunities

Absent a catalyst, growth depends purely on force of will, which is extremely difficult

Scope: she says she would love to believe otherwise

8:30 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

Sarah Tavel · May 6, 2024

The most common cause of a failed investment is a 'why now' that turns out to be ephemeral or less acute than believed

You can convince yourself an idea has timing momentum that never materializes with the force you expected

42:11 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