Is Venture Really a Team Sport?

A year and a half ago, I was grappling with the decision of whether to start a venture fund alone or with partners.

That decision raised several questions (Would it be easier to fundraise with others? Would the operations burden be too high for one person?), but the main one was:

Would I be a better investor solo, or with partners?

With few exceptions, when we think of great VC outcomes, we tend to associate them with individual partners and the companies they championed. We think of Alfred Lin and Airbnb, John Lilly and Figma, or Peter Thiel and Facebook. While multiple investors can contribute to an investment, there is usually one driver.

Despite this, many firms try to make venture a collective activity - dividing the investment process among team members and making decisions as a group.

But does that lead to better investing? The earliest stages are full of nuance - you have to deeply understand the market and founders to see something that others don’t.

And this got me thinking - is venture really a team sport?

If you look at it across the 4 parts of investing:

• Picking: This is where independent investors have the biggest advantage. Groups face context asymmetries, groupthink, and internal politics, which often push them toward consensus and dilute the sponsoring partner’s taste. Early-stage investing is highly nuanced, and distinguishing great from good I’d argue is easier for an individual than a committee. There’s a power in individual intuition about a founding team and a market shift that can outweigh the collective intelligence of a group.

• Winning: Outside of the few firms with strong brand halo (Sequoia, A16z, and a few others), speed and conviction favor individual investors. Getting a deal across the line at a partnership takes time. The sponsoring partner has to reach conviction then bring the rest along, adding time and uncertainty to the process. The reality is, founders want to stop fundraising and get back to work as soon as possible. And while we all pitch post-investment value-add, demonstrating unwavering conviction is usually what wins deals.

• Sourcing: This is where operating as a group can have the clearest advantage. More investors mean broader networks and greater meeting capacity. But, if you separate out individual investors from their firms, the strongest investors may actually be more effective sourcers on their own. An individual’s brand and investment focus tend to be clearer when they operate independently, making it easier for founders and referrers to know what they stand for. And investments get referred to people, not firms. In cyber, for instance, I would introduce an investor I know has expertise and a track record in cyber. Without that specific investor, that firm itself wouldn’t get the lead.

• Supporting: As with sourcing, more partners means a broader set of experiences and more connections for introductions. But the trusted founder relationship is with the sponsoring partner who has the most context and understanding of the founder as a person, and therefore should be best positioned to be the advice giver (probably why they were chosen in the first place). And ultimately, responsibility for a company’s success sits with the lead investor, and incentives tend to drive action. Additionally, I’ve seen specialist non-investors be effective in supporting founders across talent, community, and business development. This captures many of the benefits of a team-based model for support without introducing the downsides of team-based investing.

So is early-stage venture a team sport? There’s a strong case to be made for no. And I’d argue that more early stage investors would be more effective as either solo fund managers or at a fund that very much leans towards individualism.

The art of venture is about seeing what others don’t, which team and process can dilute. I’d love to see what more of my peers could do if they operated independently.

Note: Early-stage in this context means pre-seed, seed, and Series A.