Anatomy of Dichotomy

Add caption

Merriam Webster defines a paradox as, "one (as a person, situation, or action) having seemingly contradictory qualities or phases."

That perfectly describes Venture Capitalists in today's world. They must hold two or more opposing ideas and balance them to maximize outcomes in a risky and uncertain field.

While most would expect that VCs need to be experts in the fields or industries they're investing in. Venture Capitalists have been characterized as thought leaders. However, many times these VCs as well as angel groups have no concrete notion or experience with the matters or markets their prospective entrepreneurs are wading into. This isn't necessarily the fault of the VCs or investors. Most of the time, it's a function of the fact that they're investing in businesses who are developing cutting edge or complex products or IP. The best VCs in the world are those who hone in on a particular industry, but because they're looking for their "next wave" there may just be limited existing knowledge.

In addition to this, VCs are usually looking for home runs in their portfolios, but they have to be willing to pursue a mass quantity of leads in order to achieve one or two of these successful outcomes/exits.

Finally, I find it most interesting the image VCs in particular have to balance. They need to be seen as selective and hard to access for entrepreneurs. However, on the other hand, once they've come to terms with a entrepreneur to join their portfolio, they have to be seen as extremely transparent and accessible to be considered by future entrepreneurs. They open themselves up via social media like twitter and content marketing like podcasts. They have to maintain the sheen of their firms while also being open to the human people element of the ventures they're backing. This is arguably the most important job of a VC.