Failure and the Loser’s Curse

Fred Wilson has today’s Great VC Blog post up with The Loser’s Curse.  Rational or not, some VCs won’t go back into the same swamp after an alligator has taken a chunk out of a body part. 

  • Does this logic precipitate a VC paradox? If any failed investment makes that market “dead” to the investor going forward, eventually the VC runs out of sectors to invest in. Or, finds themselves with the winner’s curse of re-investing in sectors that did well in the past only to have the next investment fail (and thus the successful sector is now dead too). hmm…

  • Ari – it’s an interesting paradox. I guess if – as a VC – you are a perpetual loser, you’ll eventually run out of things to invest in. Hopefully, your LPs and/or partners will run out of patience with you long in advance of this and effectively make the choice for you that you need a different career.