Should venture investors be required to personally co-invest in their firm's deals?

Marcelo Claure · Jul 31, 2023

Investing a large amount of your own wealth changes the investor mindset — you become a true partner of the founder rather than a manager of someone else's money

You are putting a significant share of your own wealth behind every investment, so you speak entrepreneur to entrepreneur

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Shu Nyatta · Jul 31, 2023

Investing your own money stops investing from being about placing bets and passive beta on tech and makes each relationship a real, personal partnership

Because the returns matter to you personally, abstract capital-allocation thinking gives way to genuine partnership

9:58 20VC: Marcelo Claure & Shu Nyatta on Lessons from Investing $7.5BN at Softbank & Why Dumb Money has Gone, Why "LATAM is Under Construction" and the Next 10 Years Will Be the Best & Investing Lessons from Missing Nubank & OpenAI & Investing in FTX

Shu Nyatta · Jul 31, 2023

Financial independence is not what makes a strong partnership — caring does, and having your own skin in the game is what makes you care

Second-time founders can succeed without needing the money and first-time founders can succeed while needing it; the common factor is caring

Scope: acknowledges he does not consider himself financially independent; partners are at different life stages

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Taavet Hinrikus · Apr 28, 2025

What matters for judging an investor is not wealth but whether they invest their own money alongside other people's — alignment is the core test.

Playing only with other people's money creates different incentives; you should look at what a person does with their own money.

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Harry Stebbings · Nov 10, 2025 · hedged

Requiring investors to personally co-invest risks distorting decisions, because junior people without liquid cash may pass on great deals they can't afford to back

rent and bills make personal co-investment a large burden for younger partners

8:36 Mandatory personal co invest distorts junior investors decisions

Everett Randle · Nov 10, 2025

Thiel deliberately designs his organizations so that people are all in, and expects them to be scrappy about it regardless of personal net worth

the same pattern shows up across his career, e.g. paying PayPal employees more if they lived within a couple of miles of the office; young Founders Fund investors took on unsecured debt lines to fund their personal co-investments

9:05 All in personal stakes required regardless of net worth

Taavet Hinrikus · Apr 28, 2025

GPs should have meaningful personal skin in the game — being the fund's largest investor and, on every deal, having the lead partner write a personal check alongside the fund.

Playing with the house money is the wrong posture; writing a personal check, even ritually wiring it at the same time as the fund, forces genuine conviction.

19:12 Lead partner must personally co invest on every deal scaled to their means