The Business of Venture Capital, 3rd Edition

5Developing Your Investment Career

“Every discipline has its top 1 percent — how do the top VCs operate? What can you learn from these — because, in early years, you will fund companies you shouldn't. You will try to fix things you can't,” says Mike Maples, founder of Floodgate Fund.

BUILDING YOUR STRENGTHS

How does one build a career as an investor and rise to the top? Making rational bets while being aware of psychological biases and emotions is a good starting point. Whether you choose to emulate the path of Bill Gurley, Brad Feld, or Warren Buffett or follow the principles of Ray Dalio, there are no predetermined paths, instant premix concoctions, formulas, or silver bullets. When you develop your own views of this craft, you will stand on a strong foundation.

• Build on first principles, not blind imitations. Elon Musk, when forced to rethink the cost of building a $65 million rocket, observed that the materials required to build the rocket were only 2 percent of the overall costs. That was the trigger for starting SpaceX. Scientists are often trained to think along such lines, but the vast majority rarely develop this skill. Indeed, thinking is the hardest part of our jobs, and very few people do it well. Most of us imitate others, often without realizing it. Aristotle's view said, “In every systematic inquiry (methodos) where there are first principles, or causes, or elements, knowledge and science result from acquiring knowledge of these; for we think we know something ...