Should venture investors concentrate their limited time on a subset of portfolio companies rather than spread attention evenly across all?

Dan Siroker · May 15, 2024

Once it becomes clear a company won't be a huge outcome, rational investors reduce to the minimum — board meetings only — and reallocate their time to where they can have the biggest impact

Investors allocate time proportionally to potential impact; he saw this himself once it was clear Optimizely would be a good but not multibillion-dollar outcome

Scope: there's a 'darling' period during and shortly after a raise

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Harry Stebbings · Sep 6, 2024

Concentrating finite time on a subset of investments and neglecting the rest is rational, because a VC cannot do everything

Time and resources are finite

Scope: framed as short-term rational, long-term irrational

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David Cahn · Oct 27, 2025

Investors should concentrate roughly 80% of their time on their top five opportunities and 20% on the next fifteen

Losing Datadog to a firm that focused relentlessly on a short list showed him that extreme focus of time is what wins competitive deals

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Nick Chirls · Sep 6, 2024

You can give every investment real attention if you make few investments; the average venture firm makes too many deals per year for that to be possible

Prioritization is unavoidable at high deal volume

44:42 Few investments allow genuine attention to every portfolio company

Harry Stebbings · Dec 7, 2020

The standard venture playbook of concentrating time on winners and pulling time away from underperforming companies is not how an investor builds references or reputation

Abandoning the companies that aren't performing is precisely what founders will reference you on

30:12 Abandoning underperforming founders for winners costs investor reputation and references

Reid Hoffman · Dec 7, 2020

Walking away from a struggling portfolio company purely on return-maximizing logic is legitimately terrible and destroys trust; the right approach is to set expectations upfront that your time will shrink but you will not leave the ship

You pitched the founder on being there for the journey, so leaving when times get tough breaks the commitment you made; having the conversation at the outset means founders can still fully trust you when you do reallocate time

30:38 Set expectations upfront that time will shrink but never abandon the founder to preserve trust

Logan Bartlett · Aug 29, 2022

An investor's only genuinely constrained resource is time, so treating small investments like large ones requires holding a very high bar at entry

If you give a small investment full-sized attention and the business doesn't work, you are badly upside down on time invested

16:12 Small investments require a high entry bar since time not capital is the real constraint

Eric Paley · Sep 20, 2023

The outlier-only 'unicorn hunting' mindset — treating anything that isn't a breakout as irrelevant — is both morally appalling and against investors' own self-interest

These are real people's lives and employees who care deeply about the company, and almost every one of our best companies had a founder whose previous venture failed, so writing off non-outliers costs you future winners; the industry's long-standing admiration for Ron Conway's long view shows the alternative

51:04 Outlier only focus is morally wrong and self defeating since past failures often precede future wins

Auren Hoffman · Nov 3, 2023

Investors should spend their time on the middle of the portfolio, not the winners — winners don't need you and losers can't be saved, but middle companies are where you can change the trajectory

Companies like Airbnb would have been amazing regardless of anything an investor did, whereas a middle company can be moved from a $200M outcome to a billion-dollar one

43:56 Focus attention on the middle of the portfolio not winners or losers since that is where trajectory can change