People Are The Price of Admission

In my post recently titled Does VC Fund Differentiation Matter? several people commented on some variation of “people” as the key to everything.

I don’t view people as differentiation. I view them as the price of admission. Amy just walked by, read this over my shoulder, and said: “I don’t know what that means.” Hopefully, by the end of this post, it’ll be clearer …

Yesterday I talked to several VCs or entrepreneurs considering becoming a VC. I didn’t know any of them – these were random intros from different people that I knew. I didn’t have an agenda for each call. I was just curious and felt like meeting a few new people yesterday.

In each call, the person gave me their background and what they were exploring. Then they asked me a few questions. These questions were different versions of “what is your investment strategy” and “how do you decide what to fund?”

I went through my usual riff on this, which I should probably just put up on Youtube so I can point people at it rather than spend five minutes saying it over and over again. While I was doing this, a background process in my mind linked me back to the post I wrote on VC Fund Differentiation (or lack thereof). If you’ve heard this riff before, the next bit will be redundant to you.


We have a set of filters. For an early stage investment, we only invest in our themes. We only invest in the US. We don’t have to be the first money in a company, but if the company has raised more than $5m, it’s too late for us. Our goal with this filter is to say no to almost everything within 60 seconds.

Assuming something passes through this filter, we then focus on three things.

  1. Do we have an affinity for the product? We don’t have to be daily users of the product, but we have to care about it in some way.
  2. Are the founders obsessed (not passionate, but obsessed) about what they are building? Passion is easy to fake. Obsession is not.
  3. Do the founders want us to be investors in their company as much as we want to be investors in their company? If it’s not bi-directional, that’s fine, but it’s not for us.

</riff>Ok – riff over.

Underlying item two and three is obviously the people. But it’s a characteristic of the people. It’s a characteristic that, at least for us, that has worked over a long period of investing.

When I was a kid, my dad used to say to me “people are the price of admission.” He meant that if I was interested in getting involved in something, I should evaluate the people first.

If we did this before applying our filter, we’d never get anything done because we’d spend too little time looking at too many things. But, by applying the filter first, we can put most of our energy into evaluating the people involved and whether they want us to be involved.

Also published on Medium.