Sticking With The Struggling Investments

My friend Bijan tweeted this last week:

He's right, but I would go further. One of the hardest things to do in the venture business is to stick with a struggling investment.

I woke up thinking about this as I spent yesterday with Josh watching the hapless Jets lose badly to the Dolphins and then heading up to MSG to watch the equally hapless Knicks lose to the Pelicans. It is tempting to stop watching both teams and sell off our seats at MSG for the rest of the year. But we aren't going to do that and we will sit loyally and watch loss after loss at the Garden if that's what comes for the rest of the year. We are fans, even if our team sucks. And they sure do right now.

It is equally tempting to write off a failing investment and stop showing up at board meetings, stop responding to the emails from the founder, and stop thinking about the company. At some point, the company will run out of money, there won't be a reason to put more money into the company, and the investment will fail. Until that happens, as long as the founder is willing to listen to you, I think you have to give your struggling investments your all.

The truth is the investments that are working often don't need that much from an investor. They need more capital, they need recruiting help, and sometimes they need strategy and advice. But the reason they are having success is they are doing the right thing and doing things right. On the other hand, the struggling investment needs a lot of help. And I think the lead investor board member has an obligation to provide that help.

One of the characteristics of USV that I am most proud of is that we stick with our struggling investments. And we have made a lot of them. We have way more of them than our successful ones that are always cited when we are talked about publicly. I think how you treat your struggling investments says more about you than how many billion dollar exits you have had. You need both to be successful in the VC business, of course. The latter metric defines your selection acumen. The former defines your empathy acumen. And when I pick people to work with, I look for the latter. I suspect most people do that.

This is not a new theme. I've written about this here before. But it is an important theme for me and for entrepreneurs and investors. As we headed out last night to MSG Josh said to me, "I am not feeling good about this game". I told him I wasn't either, but all we could do was root them on as hard as we could. We did that. And we will do that again on Thursday when they head out to Brooklyn to play the Nets. We will be there too. That's what fans do and what investors should do too.

#NYC#Sports#VC & Technology

Comments (Archived):

  1. Rich Edwards

    “And when I pick people to work with, I look for the latter….”Is that to say you don’t use empathy as a selection criteria, but rather their selection acumen?

    1. fredwilson

      latter is empathyformer is selection acumen

      1. Guest

        it’s the opposite of that in your post, where latter is selection acumen and former is empathy. so that part of the post is confusing when you are touting empathy but then say you look for the latter, which implies selection acumen.

        1. fredwilson

          bummer. i will fix it.

      2. Bob

        Agree, I was a bit confused too. In the post it appears as though “latter” refers to selection acumen, because in the sentence before you say “The latter metric defines your selection acumen”.

  2. Julien

    “For better or worse”!

    1. fredwilson


  3. Rohan

    ‘When you are up, your friends learn who you are.When you are down, you learn who your friends are.’

    1. fredwilson


    2. JLM

      .In business, you don’t learn who your “friends” are, you learn who the professionals are.JLM.

      1. leigh


        1. sigmaalgebra

          Leigh, I ask you, is your response demure, discreet,passive, timid, self-effacing, compassionate,sympathetic, empathetic? I ask you, is that the waya year 1900, shy, insecure debutante would talk?

          1. ShanaC

            I’ve read Vanity Fair. Debutantes are definitely not that.

          2. sigmaalgebra

            Are YOU sure?HOW cruel! How could you be so CRUEL?I mean, killing off my dreams of traditionalromantic values!!! Me, just a naive nerd unknowing inthe ways of the world!So, I want to be clear here: You are dashing myhopes of cute, sweet, timid, anxious, meek, pretty,passive, discreet, demure, self-effacing, darling,adorable, precious, obedient, secondary, submissive,subservient, supportive, subordinate, sympathetic,empathetic, compassionate, in robe and slippersserving me breakfast in bed and having my favoritereclining chair with slippers ready when I come homefrom the office, the house spotless, the childrenhappy, scrubbed, combed, also spotless, wellbehaved, nice meat and potatoes dinner hot in theoven, home made apple pie with a woven crust, etc.?And I’ve been all wrong all these years? Gee, I sawthe old Disney movies; how could I be wrong? Youmean to tell me that Snow White with those sevendwarfs was not real? I thought that all I neededfor her was a glass slipper!Gee, Mom took ‘Better Homes and Gardens’ while Dadtook ‘Field and Stream’, and I thought that I wasgetting the right stuff?What about the painting ‘God Speed’,…Fooled again! What about sweet, “pure” Elsa in’Lohengrin’? Fooled again!Since I do my own grocery shopping, I believe thatin the checkout line I’ve seen magazines with imagescloser to Snow White and apple pie?So CRUEL!!!But I was only speaking about 1900 debutantes!I know, “Rich girls don’t marry poor boys.”.Maybe if I make $1 billion? Would that help? Agirl being pretty is like a boy being rich, and youare telling me that this has changed?Where can I apply to be 15 and try again?I’ll have to consider your extreme views for my’Girls 101 for Dummies — Boys’!

          3. Vineeth Kariappa

            140 charac r less.

      2. Kasi Viswanathan Agilandam

        In business there are ‘no friends’ … ‘only professionals’ …??

        1. Matt A. Myers

          I agree it’s using disassociation. If you do business with a friend, the friend acting in a “professional” manner in mind means they remain thoughtful, kind, understanding and compassionate – and which would include things like not projecting their anger onto you.And I agree too that being a professional isn’t a separate thing from friendship. I could see it being used as a cop out like the phrase “don’t take it personally, it’s just business” – to dismiss personal responsibility, guilt from treating another badly/unkindly, etc..

        2. JLM

          .When I was taking flight lessons for my instrument license, my check ride instructor (separate instructor who checks how you and your current instructor are progressing from time to time) was a pretty good friend of mine.Salty Navy aviator with a million hours in the air.I took my checkride and stunk it up.In the post mortem, the check ride instructor (my friend) was totally professional: “Today based on your performance, I would take you out and shoot you. Totally unsatisfactory. You will improve.”No candy coating it. I needed that and I could handle it. I knew I had stunk it up. I just wasn’t trained up sufficiently. I had done nothing wrong. I just wasn’t adequately trained.That’s a professional.JLM.

      3. Rohan

        agree. I was thinking of adding a line saying – apply to business. but then, I decided to just leave that to interpretation. :))

      4. ShanaC

        when do you learn who your friends are

        1. sigmaalgebra

          There’s a secret scorecard:They care about you.They share thoughts and information with you.They don’t say bad things about you to others andbehind your back.They ‘have your back’.They respect you.They respond to you.They are honest with you and don’t lie to you, tryto manipulate you, dominate you, sabotage your life,pursue destructive competition with you, or takeadvantage of you.You can trust them.They are there for you if you need them.

        2. Guest

          questions always!!!! do you eat question papers for dinner

      5. MickSavant

        And it’s not just about friendship or obeying some kind of moral code (neither of which I oppose); for a VC or business partner there is a self interest here to sticking by a struggling investment or partner. The company may perish, but the founders and employees will move on, and very likely to another more successful venture. Maybe it was a great team with a product that didn’t fit this time.

    3. jason wright

      when you’re down people learn more about who you are, of what you’re really made, in how you respond to adversity. some people fold, some people fight.if they’re my friend they would still be my friend whether they fold or only friends are bitcoin heavy, and today i’m losing them by the hour.

    4. JLM

      .I once was struggling on a turnaround. It was sucking the life force out of me.A guy I respected asked me if I wanted some help. I was so beaten up, I could not even answer. I just nodded.He came in, smacked me around a bit, dusted me off, got me back in charge, patted me on the head and then he left.I needed that so badly at the time that it was literally miraculous. He re-energized me, refilled my batteries. Smacked me around a bit. [I respond well to being smacked around a bit.]In two weeks, he had me headed back toward the high ground and the pay window.Sometimes we need a bit of tough love.JLM.

      1. fredwilson

        do you think that would work for the Knicks?

        1. JLM

          .Could it hurt?JLM.

          1. panterosa,

            “Could it hurt?” is a form of JLM optimism engineering.

        2. JamesHRH

          & the Nets & Jets & Mets & the Giants O’line?Maybe the Rangers could drop by to drop the gloves…..

        3. Dasher

          Unlike entrepreneurship and business, sports is a zero sum game. There has to be a loser for every winner. Things go in cycle. so hang in there. I know as I was rooting for may pats even when they were going 1-15. Now I am spoied.

      2. Matt A. Myers

        I’m helping a friend with this re: dating.I didn’t smack him around, but countered all of the unhelpful statements / excuses he’d come up with for different worries.And not that I’m a pro at it, though my system seems to be working – as I’m going on dates (yay!) – and so happy to pass that off to a friend.Took my friend about 30 minutes from first setting up an online profile to have a coffee date later this week. 🙂

        1. JLM

          .Ahh, but you are a true friend. Well played.Now if the guy ends up marrying this girl, you’ll be enshrined in history forever.I met my wife on a blind date about 44 years ago. I celebrated by 34th wedding anniversary yesterday.I chased her hard for 10 years but there was a war and other distractions. I finally won her heart.The guy who introduced us is one of my best friends ever.There was no Internet in my day.JLM.

          1. ShanaC

            Mazel tov. And I hope you thanked the match maker recently

          2. Matt A. Myers

            Congrats on turning 34. 😉

      3. Vineeth Kariappa

        please give me the guy’s number.

        1. JLM

          .Why? You need a good smacking around?Haha.JLM.

          1. Vineeth Kariappa

            Yup. From a person who has delivered results, better. (Pretty sure I cant afford you, yet.)

    5. Matt A. Myers

      I’ve never heard this before, and I’m surprised because it’s so good. Thanks for sharing it.

      1. Rohan

        Thank you for the thank you Matt. 🙂

        1. Matt A. Myers

          You’re welcome Rohan! 😉

    6. Donna Brewington White

      This is a great quote Rohan. Not sure I am reading it right, but I would add “when you are down, your friends learn what you are made of.” Although I think that what someone becomes when they are up is almost as true a test.

      1. Rohan

        Well, that would be a slightly different version.The idea is that when we are on a roll, we reveal our true nature by showing how we behave when we have good fortune and power on our side.When we are down, we realize who our true friends are because they are the only ones who stick by us.Does that help? Or am I over stating the point as usual? hehe

    7. Sean Hull

      Well said.

      1. Rohan

        Thanks Sean. credit to whoever said it. 🙂

  4. Nicholas Bagg

    I guess the real question is: which is more illiquid, venture investments in a private company or Knicks tickets?

    1. fredwilson

      i can move the knicks tickets easily. might take a small loss. failing VC investments can’t be moved at any price

      1. mark

        if a company is not doing great, how common / easy is it to exit by selling the team rather than the product? you do see team acquisitions reasonably frequently (where the product subsequently dies).

        1. PhilipSugar

          And that is where the VC gets screwed. See my above post.

      2. JamesHRH

        No, but could you pry them out of Dolan’s death grip (maybe with a small consortium of ‘invested fans’?Then you & Chamath could have VC / NBA owner grudge matches…..

  5. Nigel Kelly

    How many of your struggling investments have turned it around and exited successfully? Any good phoenix from the flames stories where you just thought this company is a write off and then they come through in a big way?

    1. fredwilson

      very few

  6. John Revay

    Good analogy – tying Investments you make w/ sports teams you root.Best Line of the post – “At some point, the company will run out of money, there won’t be a reason to put more money into the company, and the investment will fail. Until that happens, as long as the founder is willing to listen to you, I think you have to give your struggling investments your all.”It says it all.

  7. awaldstein

    At times, folding not holding is the right choice.An infrequent occurrence?

  8. Yalim K. Gerger

    How much of this recent struggle of the Knicks is on the coach, do you think?

    1. JamesHRH


    2. fredwilson

      not so much. GM and Owner should shoulder the blame. but you can’t fire the owner.

  9. bsoist

    Make it stop! I can’t get away from how bad the Jets are!

  10. LIAD

    Relationships and loyalty can never be thought about in terms of sunk costs.

  11. Brandon Burns

    Care to talk about an investment that was once struggling, but then turned around due to the effort you / USV put in? Or is it always a lost cause, but you go through the motions anyway?

    1. fredwilson

      TACODA was struggling. my partner Brad pushed them to rethink the go to market strategy. based on that, they eventually flipped from saas software to ad network. wrote checks to publishers instead of getting checks from publishers. it took off and was sold to AOL a few years later for $275mm.

      1. Brandon Burns

        Ahhh…. hope. 🙂

  12. John Revay

    Fred,I use to work at a VC firm (not on the transaction side). At the time there was one of the GPs at the firm that I recall did stick w/ struggling investments. I remember wondering in my mind why would he (when other did not).Now that I am a little older and wiser – I understand it was all about his brand.

    1. JamesHRH

      Bing – frickin – go

  13. JLM

    .What an interesting and thought provoking post..What you are doing when going to Knicks and Jets games with your son is creating the most precious memories that you will ever create.This glue — the conversations to/from these games, the dinners/drinks — is what you will call upon when your kids have flown the coop. They will bind you to them and them to you.My son and I went to some Final Fours and a Super Bowl in addition to having UT football tickets on the 50-yard line for decades. We still dine out on those memories. They are precious and special.To this day, we still have our pre-game talk about who the Horns are playing and the likely outcome and whether Mack Brown will keep his job or not. Ditto the North Carolina Tar Heels.In the end, our lives are lived on the stepping stones of memories. I would almost imagine that your steadfast loyalty to your teams in the face of adversity will make those memories all the more poignant.This is the highest ROI you will ever achieve.JLM.

    1. bsoist

      Billy and I will always remember that last game at Shea as simultaneously one of the worst games we ever saw and one of the best days we ever spent together.The whole family was there for the absolute worst game, but we will never forget enduring it together.

      1. JLM

        .You prove my thesis. Well played.I attended 30 consecutive TX v OU games at the Cotton Bowl in Dallas.Always with the same but changing cast of characters — son, daughter and a special friend. I had 10 tickets and a couple of times when I could scalp them for $2K each, I did sell a couple of them.When the game is over, whoever wins starts a mournful and soulful chanty of “Poor Sooners” or “Poor Longhorns” and the stadium exits rock.The Texas State Fair is going on in Fair Park where the Cotton Bowl is located. Big Tex lords over it all. Used to be when Detroit would show all their new cars in the fair exhibition halls.And, of course, you ate Fletcher corn dogs often consuming a toxic level of corn dog. Vomiting, by the young folk, on the way home was a tradition for a few years.Yes those are great memories.JLM.

    2. LE

      My son and I went to some Final Fours and a Super BowlAt the core this is why it’s nearly impossible to start a new sports league.No secondary meaning created at a young age by bonding with a parent. Lest you think interest in sports isn’t an acquired taste. Kids pick up that daddy likes sports.Myself (is that proper english?) on the other hand never went with dad to sports games because dad was from a foreign country where they didn’t have sports apparently. So sports didn’t exist in our house. Wasn’t dropped into my brain at an early age. I did spend plenty of time at hardware stores though.

      1. JLM

        .Of course going to Loew’s is like going to my favorite place.JLM.

        1. LE

          When I was a kid my dad also took me to a neighborhood junk store. This was back when kids got yelled at for touching things. In this case an old man in a store filled with dusty boxes of interesting parts and things. Visually very interesting.

          1. JLM

            .When I was a kid, my Dad used to take me to the rifle range with the Rutgers University ROTC cadets.I used to get an M-1 Garand rifle and as much ammunition as I wanted. I used to blast away for hours at a time.When I arrived at VMI, they gave me an M-1 Garand and a bayonet. The rifles were stored in our barracks rooms in a rifle rack.It was like coming home.My Father used to put up the 500 yard KD (known distance) targets and we used to blast away. He was deadly at that range. Later I learned he had done it for real in Italy during the War.The experiences we have had with our Dads are sacred.JLM.

    3. fredwilson

      yup. well said JLM

    4. Farhan Abbasi

      “Ouur lives are lived on the stepping stone of memories”Stopped me dead on my tracks when reading this…

  14. Tom Labus

    In the VC world, is this thinking the exception to the rule?At least the Giants won!

  15. JimHirshfield

    Not succeeding != failing. Failing != dying.Dying != dead.No company states that they’re losing money. They all say they’re aren’t profitable YET. It’s the YET that expresses the hope that’s still alive.But clearly, when the lack of success is happening, change is needed. So hard to do that without outside help.

    1. Richard

      It may not be an issue of profitability. Growth is the coveted metric for VCs.

      1. JimHirshfield

        True. I was just highlighting the positive approach, with a dash of hope, that founders should put on things.

        1. Richard

          Even when companies reach that 100MM revenue mark, its the the ones with high growth that distinguish themselves as the superstars.

      2. Matt A. Myers

        I was upset to hear is no longer available – and I didn’t even get a chance to use it because I’m in Canada (yes, I could have circumvented).There must have been a way they could have monetized more or better or kept the service alive..

        1. Donna Brewington White

 is definitely an example of a brilliant concept for which all the pieces didn’t come together.Still going until 10:00 p.m. EST. There are some workarounds to the resctrictions. I’ve found a way to watch my favorite BBC and CBC shows online. 😉

      3. James Ferguson @kWIQly

        It seems to me growth works as a rebuttal until you have secured market position.Once you have position (and yes you need to retain it) you need to monetize it.Growth is not a proxy for monetization – but it can be worth kicking the can down the street.However, if you bend down to pick the can up and it comes up empty, you cant say “ah well lets kick it on down a bit further.”

        1. Salt Shaker

          Too many start-ups are transfixed on scale without fully vetting how they’re gonna monetize down the road. The two need to more strongly joined at the hip from the outset.

        2. ShanaC

          depends how long- see Fab. They kicked it down too far

    2. Kirsten Lambertsen

      Right on.

  16. JLM

    .This conversation brings to the fore one of the most critical and overlooked duties of an investor. If an investor takes a Board seat as part of an investment then he must embrace the fiduciary duties of loyalty, care and extra care.Delaware law codifies these duties very well and they have been litigated to a point of settled law. One of the reasons why Delaware is a sought after location in which to charter companies particularly public companies. The laws are favorable to the swift administration of justice and dispute resolution but more importantly they are clear and precise while providing a clear road map of duties.I only use Delaware as an example of how well developed this body of law truly is. I am not suggesting that a VC investment is in any way required to adhere to Delaware law but most state securities regulators and the SEC mirror Delaware law.A Board member has a duty not to his shares or to the company but to the shareholders — all the shareholders. In fact, this is his primary duty.Independent directors — as opposed to management directors — have a special duty to act independently of and to supervise management. An independent directors duty of “special care” kicks in in times of crisis, when large capital transactions are contemplated, when there are conflicts created by related or interest party transactions or where there are simply garden variety conflicts of interest.Independent directors are cautioned to ensure that Boards act appropriately through the creation of appropriate committees and those committees have written charters which respect, enunciate and enforce the “independent” nature of these directors.In times of crisis, the Boardmember’s duties of care and special care must be respected and adhered to with a focus not only on what is good for all shareholders but with a “special duty” toward shareholders with whom they might have a conflict of interest.This is not just good corporate hygiene, it is the law.As to times of crisis when contemplating the termination of a business, it is imperative that that inflection point be approached with “special care” and the notion that communication would be diminished or cease is a very dangerous direction to follow.Pragmatically, having been involved in a great number of turnarounds, I can also say that this is where real business knowledge — which frankly many directors simply do not possess — is critical.In much the same way that an independent director might insist upon a fairness opinion or full disclosure in a conflict situation, it is advisable to use the same level of special care — both legally and pragmatically.I could go on forever but I shall spare you further.JLM.

    1. Tom Labus

      Unfortunately, there can be private agendas and or a dominate board member (usually the CEO) who forces an alternate view of reality,

      1. JLM

        .The psychology of boards and board members is a limitless source of discussion but all the more reason why board members both require and should adhere to their duties.First they have to contemplate, understand and embrace those duties, many of which are a matter of law.An independent board member should be a constant, but professional, probe which makes management do their work (the appropriate work to be overseen by a board at the policy level) and to adhere to their approved plans.While nobody looks forward to a prostate inspection, there are times that this can be a life or death inspection of the state of affairs.Board members are required to inject a prostate inspection or two from time to time.A Board can make its work infinitely easier by demanding a clear articulation of Vision, Mission, Strategy, Tactics, Objectives, Values and Culture.A Board should approve annual operating, financial, capital, personnel plans (Tactics all) and should oversee a dash board which tracks progress versus these plans.Independent directors should populate the committees and should have regular independent directors meetings. Each committee should have a charter and minutes.Management directors should recuse themselves from the vote on any action proposed by management. Once their presentation to the board is completed, they should have a very limited role in the ensuing debate.There are basic corporate governance techniques to ensure that a single person does not dominate a board but they may require breaking a sweat.JLM.

    2. fredwilson

      which is why i resign from boards when the founder has control and he or she is driving the company off the cliff. if you can’t exercise your duty of care, then you have to resign

  17. William Mougayar

    I’m sure your belief is based on the fact that you have seen case and case when companies do turn the corner and rebound. Few startups grow as a straight line.That’s part of the USV DNA. But do you do it out of conviction that the business will rebound, or out of pure empathy and social capital point of view until there is a soft landing of sorts?

    1. awaldstein

      Life isn’t a straight line my friend.

      1. pointsnfigures

        Ya, sometimes it goes down.

        1. awaldstein

          Certainly, but not all companies hit the wall. Struggle to find a market is one thing which is the biggest source of failure but many iterate forward and slog up the hill. That’s different to me.

          1. pointsnfigures

            Was referring to life…..agree on companies.

    2. JamesHRH

      I disagree.Most stuck startups are management failures.Some are situational.Some timing.You can’t really fix any of them. Just plug away and pray for a break even outcome, is alI a VC can do.PS – firing founders (as a group) does not provide returns, I have been told (by investors I respect).

      1. William Mougayar

        If you say “founder” instead of ‘management’, I would agree. Yes, when you’re under 10-12 people, and the startup doesn’t take-off, it’s typically the founders that didn’t do something right, although sometimes, timing, lack of funds, some bad apples, a bad product, etc…enter the picture and that kills everything.

        1. JamesHRH

          I think we agree – you can get past 12, maybe up past 50 and towards 100, and still be nowhere near out of the woods though.

  18. SD

    so, so true. you have to play the 4th quarter, even if you are down by 28 points. I think failing investments, failing projects can be a showcase for your management skills. You learn about your commitment, resourcefulness, and “hustle”.

  19. panterosa,

    Important to keep the faith on why you were there to start. Faith plays a role in luck somehow, at least lack of faith tends to make things unlucky.

  20. reece

    ok… so who’s going to make the infographic breaking down pro sports fan loyalty among VC’s? might be a telling piece of info for young founders…Fred is waaaaaaay out on the empathy axis with the Nets, Jets, Mets…Mark Suster is an Eagles fan (sorry dude),on the flip side, @bijan, despite living in BOS is a Yankees fan…most Boston VC’s have had it good for the last 12 years or so, but if they can prove they were fans in the 80’s and 90’s then i think they score high in empathy…

    1. JamesHRH

      Colin Cowherd on the NFL: good owner, good GM, good Head Coach, great QB & you are golden.Me on NBA – good owner, great GM, 2 stars and you are golden (look how competitive the Lakers are with no stars).Fred is waaaaaaaay out on the empathy limb for Mssrs Dolan & Johnson. Prokorhov is still on probation I think.

    2. msuster

      still tied for first place, baby!

      1. reece

        haha… congrats. for now…

  21. jason wright

    linking life experiences to sporting experiences is so American that i’m surprised there’s no Article devoted to sports in the US Constitution. What a miss.

  22. Guest

    It’s been said that the founder-investor relationship is like a marriage whilst the startup is like the baby they have together.It says something about the founder and the investor how well they stick through thick and thin and are equally responsible for “bringing up baby”.The reference to the Hepburn-Grant movie is intentional because good spirits are needed in the most unexpected situations that startups and marriages can find themselves in.

      1. awaldstein

        Honestly, unless they become a business in their own right, businesses themselves are not marriages no matter how attached you become.Knowing when to fold is not an underrated skill.

      2. Guest

        Thanks, Philip, you have an interesting perspective on it.Your Sultan-harem model suggests that the founder always gets screwed?There are big institutional investors I know who would say that their experiences have been the opposite. They’re the ones during the “divorce” (e.g., bankruptcy filing by the startup and firesale where something that was once valued at $100+ million goes for $1 and debts) who have had to pay the costs of investing in that “marriage”.Personally, I don’t treat the founder-investor as a marriage; I just make the observation that it’s how it gets commonly analogized.Marriages have a different dynamic from founder investing.The latter is a professional relationship, the former a private personal relationship.The metrics involved from both sides about what constitutes a “successful” partnership in a marriage and in founder investing are different.

        1. PhilipSugar

          Not at all. I am pointing out what it is. Think any of USV’s big exits got “screwed”? Hell no. Without the money, name, advice, contacts, etc, there would be not a single big exit. I really believe that. And yes, I think on the whole VC’s get “screwed” by entrepreneurs more than vice versa.I just hate the marriage analogy.

          1. LE

            Think any of USV’s big exits got “screwed”? Hell no.Or likewise big entertainment stars. Yeah I know there are a few cases where this has happened by a greedy manager or studio.And yes, I think on the whole VC’s get “screwed” by entrepreneurs more than vice versa.Except for a few outlier cases (you know the people who went down with the Titanic because of that honor shit) the majority of people, when push comes to shove, act in their own self interest in business and for that matter life. But definitely in business. It’s kind of baked in. [1] That said of course people fall all over the continuum of to what degree that will act in their own self interest. In different circumstances they act differently. And they may act differently on a personal level than a non personal level. (Or at least find other rationalizations for their actions).In business mistakes can sometimes be tied to two factors. Having to much empathy (and not making the hard choices) and not taking enough risks. Sometimes the empathy plays into the risk in other words not making a hard choice and rationalizing it as empathy when you know it’s more not being sure that door number two will work out.[1] If it isn’t you are in some kind of special place where there is no competition or you have some super unique advantage that allows you to operate above the fray and claim you are all superior to the rest of the world in your morals.

          2. Guest

            We agree on this: the marriage analogy is not approp.Whether we’re founders or investors, what we hope for is to work with people who have loyalty, integrity and authenticity.People who have the guts and balls and character to be steadfast through storms as much as calm seas.

  23. Brandon G. Donnelly

    Empathy acumen, I really like that. The other way to look at it, is that by “subsidizing” the failure side of your business, you drive the unicorn side of your business. I’m thinking of it like an externality. Because entrepreneurs know you have a heart, you get improved access to the billion dollar exits.

    1. Kirsten Lambertsen

      +1MI think this is the most enlightened comment here today. Not only is it the ‘right’ thing to do for the people involved, it’s the best thing for the vc firm, and in fact, the industry. Other firms who want to be as successful as USV then model themselves after USV.

      1. fredwilson

        yup. best comment on the thread

      2. panterosa,

        Agenda-less nourishing, empathy, and support – the person, or project, can grow up to what it needs to be. Self-actualized things more powerful than lemmings on steroids.

    2. Donna Brewington White

      And then there is the second shot with that founder when s/he takes all that hard earned experience into the next startup. Maybe that’s when the first investment really pays off.

      1. Brandon G. Donnelly

        Another good point. Maintain the relationship.

    3. fredwilson

      very true

    4. Farhan Abbasi

      That’s what i call a dope-sauce comment.

  24. B12N

    Have you ever been able to turn a struggling investment around?

    1. fredwilson

      not me, but yes i’ve seen entrepreneurs do it

  25. Richard

    Fred, What’s the common denominator of usv investment failures? Poor Investments Choices or Poor Execution?

    1. fredwilson

      did not find product market fit or the user base was too small. those two kill most startups

  26. pointsnfigures

    totally agree with this post. And the part about the Jets and Knicks. I have some “tough” investments. I try to help as much as I can. I have a weekly email I send to each company that I have invested in. It’s usually inspirational-send out a verse, a story something like that. I include all the founders of companies I am in. Once they have failed, I keep them in the loop. I don’t cut off communication.That all being said, sometimes your communication has to be realistic and firm.This week, I sent an email illustrating one of my own terrible failures. I explained how it happened, what I learned. Two reasons. One it makes me human. Two, I don’t want the companies I invested in making the same mistake I did.Additionally, I would add when your star player goes down-you need to find a way to pick the team up too. DRose is in rehab again and the Bulls won’t beat anyone this year. But Joakim Noah still plays hard every night. Got to support people like that.BTW, I am also a Cubs fan…no one knows failure like a Cubs fan.

    1. LE

      It’s usually inspirational-send out a verse, a story something like that.Serious question here. What’s the reason for not getting the hands dirty and providing some actual help in solving the issues that the investment is having? I mean if your kid is struggling in school you get them a tutor in addition to the pep talks. A business isn’t Shackleford’s ship in the middle of nowhere that has to keep up spirits until the thaw or anything. Or someone who was just injured in a accident that needs to make it through rehab. There are things that can be done.

      1. pointsnfigures

        In many cases, I do. But, you don’t help every kid the same way and they are all at different places in the startup continuum. Sometimes just reaching out and touching them, giving them some inspiration or letting them know you are around is enough.Not every single startup is a problem child either.I try to model after great coaches. Coach K, John Wooden and great leaders like Eisenhower.

        1. LE

          Not being a sports guy I had no idea of who “Coach K” was. Never heard of him. So I did a quick check and easily found out. (Or Wooden for that matter.)What stood out to me is the following:During his long tenure at Duke, Krzyzewski has been given the opportunity to coach in the NBA at least five times.While there could be many reasons for this (likes his neighbors) one reason could be the fact that it is much different to keep winning with a winning college team (where attracting talent is much different than in the NBA and your legend gets you somewhere with that recruiting) vs. in the NBA.Perhaps Coach K recognizes that it’s not all in the coaching? After all he could be weighing what he stands to gain (with the gamble of changing jobs) vs. what he stands to lose (winning reputation). Stay out while you are ahead. I wonder how this plays into his management of the team as well.I’m curious what sports fans take on the reason for this is. I’m sure he has stated why as well but I would bet that it might likely be a red herring.

          1. PhilipSugar

            In the Pro’s you choose your players, in college they choose you. You would think you want to be in the Pro position.Wrong. If they want to choose you, you win every time, because you get the best players.

          2. falicon

            There are also a lot of lifestyle advantages (and slightly more security) that go with staying a level below the pros for coaches.Not to mention that player management is a lot different…in the pros they are already famous and getting paid really well and generally need something other than money to be used as motivation…before the pros, they are all motivated by the hope and promise of future fame and riches (ie. it’s more aligned for them to be team players at the lower levels).

          3. PhilipSugar

            Top paid coach in the US….with benefits???? Nick Saban.

          4. falicon

            Good stuff -> http://www.celebritynetwort…Also just to clarify, I meant that the players get paid well in the pros…but are supposed to get paid nothing prior (so part of the motivation to listen to and follow a coach at that level, is to work towards that eventual payday)

          5. PhilipSugar

            Then Pattino and Calipari

          6. JamesHRH

            Old hoops coach saying: I am successful b/c, on most nights, I get off the bus with the best players……Phil is right – he has an established talent advantage. He gets the best bright athletic players.He is like Google – his past gives him a huge advantage for the future.

        2. Salt Shaker

          I’m a big believer in Coach John Wooden’s “Pyramid of Success” in both biz and life, although I admittedly don’t always live up to his standards. I had the pleasure of meeting Coach Wooden and have a signed copy of his Pyramid hanging in my home office.

          1. pointsnfigures

            I had one in my bedroom when I was growing up.With regard to Coach K, he stays at Duke because he likes it. There isn’t less pressure at Duke. He learned his leadership principles at West Point, and his coach there was Bob Knight. He has a very different leadership style than Knight.I have been around both great and poor coaches in my life. Pitino coached me when I went to 5 Star B ball camp when he was an asst at BU. You could tell right then and there he was going to be an awesome basketball coach. I met Seth Greenberg at that camp and thought he would become a great coach too.I don’t think the same holds in an entrepreneur/VC relationship, but after meeting with each other a few times and getting some references, you ought to have an inkling.My guess is that every entrepreneur knows Fred will go to war with them, and take some slings and arrows. But, I bet the reverse is true too. Relationships aren’t one way street.

        3. falicon

          Somewhat off topic, but it’s official, I have to get you playing with the Coach Wizard product ( )…it’s only a *rough* shell of pretty breakable features at the moment, but you can hop in and play around (and hopefully get the idea of what we are building towards).Whenever you have a few mins. would love to have hop out and break some stuff…after I see you do that, I’ll reach out for some more offline feedback 😉

    2. fredwilson

      misery loves company.

  27. aarondelcohen

    Fred: ; The only corollary I might add here is to demand the brand of persistence and tenacity that Paul Graham frequently writes about in his essays. I was at the JETS game yesterday and it was unclear whether the JETS had collectively tried their hardest. Struggle is part of the DNA of any company at some point in their existence. Those challenges must be met with consistent, methodical management over long periods of time. For the average 30 year old who starts a company, it will be at least 3 and possibly 10 years of their life to build something of value. That’s 10% to 25% of a total life and nearly 25% to 50% of a career to date. The time pressure can be misleading in startups because of our tendency to talk about high growth of users, but Twitter, YouTube, and Facebook have been at this for years already.

    1. JamesHRH

      Lack of leadership is the issue.If you like the movie Madagascar (parent reference here), then you love the Madagascar Penguins. Of that flock, Rex is Kowalski, not Skipper.I think Fred needs to preface this post with ‘when people we invest hit bad luck or bad outcomes – and they are not bad leaders or bad dealers – we………..’

    2. fredwilson

      they gave up

  28. hypermark

    Out of interest, what percentage of investments that are labeled struggling actually turn it around to great success, and when in the investment is that label applied?

    1. JamesHRH

      I will guess <5%.

      1. hypermark

        I guess it sort of depends on what stage the “struggling” label gets applied, and why they are struggling. Case in point, many successful companies pivoted from losing Plan A to winning Plan B, right? Presumably, the very fact that they were struggling in Plan A acted as the catalyst for the pivot that got them on the road to success.Then again, the success stories may be an acute case of survivor basis. We only hear the stories about the few successful pivots, not the majority of failing ones.

        1. JamesHRH

          Your last point is the key:- 90% of new restaurants fail (you don’t hear about them, you hear about Panera Bread)- 99% of new category creating high tech start ups fail (you only hear about FB & Twitter)If you define struggling as ‘ not gaining adoption with customers within 12 months of a major product launch ‘ and you define success (not great success) as becoming a viable business or getting acquired for more than the equity in the business, I will stick w <5%.

          1. hypermark

            Good stuff. Related to this, an immensely enjoyable, thought-provoking read on the role of biases is Fooled by Randomness by Nassim Nicholas Taleb of Black Swan fame. The latter book made him a recognized name, but the former book (which introduces the Black Swan concept) is the better, richer read.

          2. JamesHRH

            I thought Black Swan was really poorly written. The core idea is bang on, but it was a tough slog to get through the book.Thanks for the suggestion.

          3. hypermark

            We are on the same page. Fooled by Randomness is a much better read. Cheers.

    2. fredwilson

      very few

      1. hypermark

        Thanks for the clarity. 🙂

  29. AlexBangash

    There is a subtle difference between time and capital. All VC’s want to double to double down –capital wise–on their best investments, putting pro-rata or super pro-rata.The difference is in time. When pitching to LP’s (or updating LP’s as they are wont to do), the best VC’s invariably talk about how hard the work with their struggling companies.The lesser VC’s boast to LP’s how they stop spending time with their struggling companies. Yes, they can be on 17 boards, because they really don’t spend too much time on the companies that are going sideways or down.

    1. fredwilson

      we double down our capital on the winners and our time on the losers

  30. Michael Elling

    One of the things I learned from refereeing and subsequently coaching was to be dispassionate about a given team’s performance and look at the other side. It’s very difficult to do. But it provides useful insights and makes the process of your team’s losing a little less painful and subjective. The same principle applies within the team dynamics. Don’t look at the action; look at the inaction. You’ll be amazed at what you see and learn.

  31. PhilipSugar

    I would say there is a continuum Ignoring the company is in the middle. At one end there is support/empathy that Fred shares, at the other is absolute flailing, blame assigning, etc.So while I agree that yes I would prefer someone proving their empathy acumen, if you can’t help it and what you show is the flogging of a rented mule, ignoring is not a bad option.

    1. JamesHRH

      I totally agree with Fred’s post, I just think there is a preface required and that you are close to writing it here.

  32. falicon

    I’ve been a loyal Falcons fan since about ’89…most of that time the team has been pretty horrible (and they are again this year)…but I still watch (suffer through) every game. So I know where you are coming from, but there are some big differences between being a fan of a sports team and rooting for a startup.With a sports team, you know there is always ‘next season’…there is only one real winner a season…and you can get through tough seasons (or multiple seasons) building towards the future. Put simply, everything is completely out of your control (except for if you watch)…but there is always some level of hope.With a startup, there’s not guarantee that there’s even a tomorrow let alone next year…there can (and usually is) more than one winner…getting through tough stretches is all about making the right moves and decisions…and you’re directly involved on the outcome of it all (you *can* make a difference)…and most difficult of all, there isn’t always a level of hope.I can (and will) sit through as many rough seasons as the Falcons serve up, clinging to nothing but hope…but there better be a whole lot more to cling to than hope in the startups I’m rooting for.

  33. Richard

    On a macro level, this lesson also makes sense: We consume 16-17 million barrels a day here.· This is down from a peak of 20 million.· We produce between 5.5 and 7.5 million barrels a day.· We import about 9, down from 11.5How many times have we written off America’s engineers? Believe in innovation.

    1. JamesHRH

      I have 2 words for you – Vaclav Smil.Innovation is not going to get that done. Political will and wild change in conservation will – and even then it will be 50 to 75 years before an alternative fuel is ready to turn on.As Cmdr Chris Hadfield said in Wired – a 5 gallon pail of gas does an amazing number of energy related jobs.

    2. JLM

      .If we had a coherent energy policy we would be importing………………………………………………………………..nothing.It is literally within our grasp right now.The magnitude of the energy boom in Texas right now is incredible. Better seismology, digital seismology, dramatically improved recovery, fracing, shale, directional drilling. It is here now.A coherent energy policy would also remove the pressure of oil gunboat politics and make the Iranians irrelevant. But for oil politics, the world would never know where the Straits of Hormuz are located.JLM.

      1. Richard

        If we were 30% more fuel efficient and picked up production to 9 million barrels a day, we would have a different economy.

  34. Lee Blaylock

    During a board meeting in my first start up during the late spring of 2001 and talking about a bridge investment, one of my board members, who was a replacement for the partner I picked who’d left the firm, told me “pencil me in for zero” and never came to board meetings or helped me again. I ended up successfully selling the business to a Fortune500 firm and that venture firm lost out on lots of referrals over time.Relationships are more important than a transaction.

    1. fredwilson

      sounds like a jerk

  35. kirklove

    One of the reasons I admire you, Buster.But, c’mon the Pelicans!?

    1. falicon

      I hate that name choice as well…

    2. fredwilson

      yeah. they have this guy Ryan Anderson who absolutely killed us. he didn’t miss.

  36. Lisa Abeyta

    This really struck a chord with me.Before putting any money in, investors will often say they’re investing in the team more than the business proposition. But when rubber hits the road, and investors watch that same team foundering with a brand new concept or technology, it seems that many focus on worry that the technology or business proposition might fail and forget that that same team may still be a very good bet if given the right support.Too often, it takes more than one pivot to find the big, successful exit investors want. But investors who can’t stand the stress of the pivot and not only stop being supportive but sometimes become an active distraction and problem. They still benefit from the successful exit – if there is one, but success happens despite their negativity, not because of their commitment to the team.

    1. LE

      Before putting any money in, investors will often say they’re investing in the team more than the business proposition. But when rubber hits the road, and investors watch that same team founderingLive by the sword die by the sword. At that point the halo is gone though. I’m sure behaviorally that plays into things. While this isn’t the best example think Madoff and what he “looked” like (the picture of success and credibility) before the crime he committed was known and after. [1][2] I’m using that example strictly to point out that in a world where you place value on an intangible or feeling that can be quickly reversed by failure.[1] Just the other day Laura Logan who to me appeared to be highly respected – especially after what happened to her in Egypt and now is being portrayed by the media as a risk taking loser. Hard to shake that from my head. The halo and confidence is gone just like that.[2] Mark Drier is another example.

    2. sigmaalgebra

      What all the VCs are buying is a piece of the business, often in a cold hearted way.For some of the VCs, much of what they are ‘selling’ is “commitment to the team”, and once they have closed their ‘sale’ they stop ‘selling’ and, then, pay attention only to what they have bought, the business.It’s an old story: And oftentimes, to win us to our harm, The instruments of darkness tell us truths, Win us with honest trifles, to betray’s In deepest consequence. -William Shakespeare, Macbeth Act I, Scene iiiOr fishermen put out bait for their hook.

  37. Salt Shaker

    I’m emotionally, not financially, invested in my sports teams (although with the cost of ticket prices in NYC those two issues are not necessarily mutually exclusive). I think whether you’re a VC, an investor in equities or a sports team GM, having a diversified portfolio is still the key to success. Too heavy an investment in a single company or player is the kiss of death. The Jets, Knicks and Mets suck because they are saddled with overvalued players and onerous contracts. Never a quick fix. As good a player as Robinson Cano is, a 10-year contract at anything near $300M is insane. The probability for a healthy ROI over that span is virtually non-existent. Although dealing with an unsuccessful VC exit is not pleasant, and the pain may linger, when it’s over it’s over, particularly again if the VC has in place a diversified investment strat. The emotional pain with sports seems to never end, likely cause when there’s damage, the damage is there for a long time before it can be remedied, if at all. And to add salt to the wound, you (the fan) have absolutely no control and are at the mercy of (alleged) experts. The way league salary cap and CBA guidelines work virtually assures the pain will linger. There’s rarely a quick fix (Red Sox be damned). It’s like having a bad toothache or a crotchety Aunt that just won’t go away….the pain is inescapable.

  38. karen_e

    This is an amazing post. How healthy it is to let someone you love fail on their own two feet, all the while bearing witness to their efforts.

    1. William Mougayar

      Hey Karen, been a while…how are you?

      1. karen_e

        Good, thanks, Wm. I liked your Drucker quote the other day. The customer decides what business you’re in, etc.

    2. fredwilson

      hI karen. nice to see you here.

      1. karen_e

        Thanks for shining a light on this concept. In my work with principals in a professional services firm, the ones who are natural marketers with a great body of work come to my desk for assistance less often. The ones who struggle come to me more and probably cost the firm more money, yet still they get mediocre results. Throughout, the CEO has reasons for keeping all of the principals on staff, and it’s my job to support that effort. You’re helping me see that angle even more clearly.

    3. panterosa,

      Some people you watch, some people you raise.

  39. JamesHRH

    Everyone seems very kumbaya on this topic.I struggle with it. I have worked with a lot of people who, it turned out, were incompetent. They were, quite often, missing the personal attributes of success, which (of course) led their ventures into the dirt.Maybe I was missing those attributes at the time and we were all getting seasoning.I think it is important to state that there is an accountability hurdle for founders here. Sometimes people go silent on you b/c you have stopped listening.

  40. JordanCooper_NYC

    nice post…we share values along this axis…at least at the knicks game we can start drinking extra beers when things get dark…board meetings not so much…

    1. fredwilson

      i had two beers against the Pelicans, one in the first half, one in the second half. it helped. Ryan Anderson killed us.

  41. LE

    I think how you treat your struggling investments says more about you than how many billion dollar exits you have had. You need both to be successful in the VC business, of course.You actually need the billion dollar exits more than you need to stick with people though. The exits get you the publicity and fame which is why you get the chance at investing in anyone to begin with. Without that you might as well be the guy who owns the local pizza shop and wants to throw some money into the game. It’s the gun to the tune of Al Capone’s “you get more with a kind word and a gun than a kind word alone”.

  42. Anthony Serina

    The Knicks are so bad. We need to rebuild and trade away the whole team for draft picks and young talent. That will only happen if people stop going to the Garden and the seats are empty. Otherwise Dolan will just put out mediocre teams that never advance far in the playoffs because he still makes a killing in that scenario.

    1. pointsnfigures

      Kentucky has 10 freshmen. Maybe start with them?

  43. markslater

    obnoxious comment from new englander:We up here don’t have that problem. We have belichick and its december……

    1. fredwilson


  44. Kasi Viswanathan Agilandam

    This may not be a new theme …. but for the first time I get to distinguish between “Investment” and “capital” …this following sentence is the only thing I read in the whole post….because i know nothing about MSG, dolphins, Knicks and Jets….”The truth is the investments that are working often don’t need that much from an investor. They need more capital, “Good one and Great one.

  45. Xavier Faure

    I agree with part of your point. VCs should stay loyal to their portfolio companies. Always.Still, your time is a scarce resource. You’re not throwing money forever at failed investments, why should you throw time indefinitely? Is it in the best interest of your LPs’ and portfolio companies’ (taken as a whole)?Hard question. The more a company is struggling, the more it needs support from its VC. And the less the VC’s time makes a difference in $. Maybe one can change a 0x into a 0.2x. But isn’t it better to focus on trying to change 10x into 11x?Maybe I’m wrong, maybe I should stay humble about my ability to improve things from the VC’s seat and just respond to calls for help when they come.Yes, it’s a hard question.

    1. LE

      Maybe I’m wrong, maybe I should stay humble about my ability to improve things from the VC’s seat and just respond to calls for help when they come.To me by the time someone asks for help it’s a “CF” and becomes much harder or near impossible to fix things.This is not specific to investments but more with business and/or life.My way of looking at things if a person doesn’t want to listen to advice or take help when offered (before they have to ask) and is stubborn it’s a non starter. And I don’t even want to get involved with that person.

  46. Farhan Lalji

    Great post Fred, though I wonder when do you decide that the energy it takes to root for a company to figure things out takes away from what you could do with other companies in your portfolio?

  47. Dorian Benkoil

    Fred, I’m curious your perception of investors who meddle too much and hurt successful ventures. (I’ve heard entrepreneurs complain of investors who want to get involved — and that their job becomes managing the investor(s) as well as the business.)

    1. fredwilson

      it’s a fine line between tough love and meddling. and it finds itself in a different place in every investment

  48. Josh Nussbaum

    The problem with the comparison is that the investments you make are generally people you (at least at some point in time) admire, respect and generally like. I too was at the Knicks game last night and I can’t help but root for the team as I’ve been a Knicks fan my whole life. Unlike your investments, the Knicks ownership doesn’t care about the fans (or the users). They’ve continually run the product into the ground with a blatant disregard for me, you, and the rest of the “user base”. That situation coupled with the stories of how management treats employees lead me to believe that sticking with your companies and your sports teams can be quite different scenarios.If Dick Costolo woke up one day and decided that Twitter users shouldn’t be able to follow who they liked, could only tweet once a day, and the employees were forced to give political donations and work during Hurricane Sandy or take vacation days no one would fault any of us for deleting our Twitter accounts and spending more time elsewhere.

    1. fredwilson

      the buck stops at Dolan for sure

  49. matthughes

    You could argue the Jets should have done a better job supporting their struggling investment.

  50. sigmaalgebra

    Need to “know when to hold’em and when to fold’em.”For that, need to look at more than just if theeffort is “struggling”.In particular, need to work one or a few levelslower than the superficially visible burn rate, etc.E.g., if Wilbur and Orville failed to take off atKitty Hawk, was the cause (1) they got a case of theflu or (2) their lift/drag calculations from theirwind tunnel were way off?Superficially (1) and (2) can look much the same,but (1) is likely no biggie (except for some strainsof flu) but (2) starts to look serious.E.g., last night I tried to compile for the firsttime a program of mine in Microsoft’s Visual Basic.NET with file_lines = 15360 blank_lines = 2979 comment_lines = 6718 debug_blocks = 27 writeline_lines = 405 code_lines = 5663 code_statements = 4435I had only one trivial error, just one missingvariable declaration. But the compile didn’t work.Bummer. Why? I got from the compiler warning BC42110Bummer. Upon early investigation, likely theproblem is that when using SQL Server variable namei_partition is somehow ‘reserved’. If so, then thisis basically an error of Microsoft’s. Willinvestigate further and pick a work-around soon.But the problem means nothing bad about my project.

  51. Donna Brewington White

    This is a sad day for me as winds down. I’m going to stay on until the bitter end even if AFK much of the time. I’ve seen it coming for a while. Hoping that Turntable Live is a successful pivot. Both concepts are brilliant.I can only imagine what it is like being an investor in a struggling company, but I feel like I am getting lots of practice as a startup fan and as someone who has invested in startups in terms of time, energy, work, loyalty and encouragement.If you are going to love startups, you have to become resigned to mourning from time to time. That’s the way it is.

  52. Donna Brewington White

    Love this post, Fred. Thank you.I imagine that some of the same characteristics that lead to big successes as an investor are some of the same ones that are part of sticking with the struggling ones.One of my life mottoes: Sometimes you win!I imagine that this is a motto in investng as well.

  53. Semil Shah

    In this light, I wonder if founders view investors at the time of funding as a type of “insurance” — as you say, if things are good, they’re good, but if they’re not, they may ask “Who Will Help?”

  54. GlennKelman

    Great post. Michael Bloomberg said he can’t remember who called him the day he was promoted, but he remembers every single person who called him the day he was fired.

  55. FlavioGomes

    Sometimes shutting things down does everyone a favor. Including the founders. They may not feel like it at the time, but the next big thing may just be around the corner.

  56. Matt Zagaja

    This is also quite true in politics. Good post.

  57. Guest

    @fredwilsonWhy did y’all make shut down? Did you think it was failing? how was it failing?I was about to load up “Chill or Be Chilled” too…I’m not saying that turntable live is a bad thing, but man, why not do both? If they have VC money, operations shouldn’t be an issue. if it is, give them more money. I noticed they they attempted (i have ad block plus) to put ads in rooms, that was dumb.EDIT: Also, if running out of money was an issue, you should’ve given them more. They’ve used it wisely, building a nice product and getting licenses (which permits the experience to be ad-free.)Stop focusing on “monetizing” or getting “millions and millions of users”, and just build great products, and keep them running.

    1. fredwilson

      i answered this question on your post on

  58. Michael Berolzheimer

    Great post, Fred. A conversation not frequently discussed in the VC ecosystem, and especially not in the Seed world. We share your approach at Bee Partners, and take pride in supporting the founders, however we can, as they struggle the struggle. After all, this is an extremely human-centric business we’re in, and investors should never be flippant about the emotional & financial sacrifices that founders take as they endeavor on their startup.

  59. Alicia

    The idea is that when we are on a roll, we reveal our true nature by showing how we behave when we have good fortune and power on our side.

  60. Alicia

    when the lack of success is happening,

  61. Jeremy Robinson

    One your better posts. The path to wisdom runs through the river of resilience. Stay on it and you’ll feel a bunch of pain, boredom and many other uncomfortable feelings. Somehow it’s all worth it, surprisingly enough, although it might not feel like it today.

  62. paramendra

    Good choice of metaphor. The post was a breeze to understand.

  63. Mez Gebre

    Persistence pays off, as long as you are improving is what he means I think. Big take away is as long as they are willing to listen. “it ain’t over till the fat lady sings”. I like that you are realistically optimistic Fred.

  64. awaldstein

    You must have recorded a version of ‘Nobody wants you when you are down and out” I bet. Bessie Smith did it best in 1929 and still so true.

  65. PhilipSugar

    But the silence was better than those that were bitching yes?

  66. FlavioGomes

    “your relationship to me is directly proportionate to the checks in the win column”.

  67. LE

    I had VCs go silent for 3 months once.Nothing says narcissist more than not taking the time to respond when there doesn’t appear to be any clear short term benefit.

  68. fredwilson

    i think LPs are fine with anything that produces returns

  69. JimHirshfield

    Thanks. Every day should begin with a little Monty Python.

  70. Kirsten Lambertsen

    Ha, yes!

  71. JLM

    .The B Corp notion is a great idea when there is a genuine — rather than manufactured — interest and when there is a community which will respond to that larger vision of things.It requires heart in addition to brains. I like that idea.JLM.

  72. pointsnfigures

    I invested in one B corp. Haven’t had enough experience to comment. Without commenting about the company; in general I don’t think a B corp moves the ball forward.

  73. falicon

    Yes!Unfort. so far in most the B corp. companies I’ve seen the interest is mostly manufactured (mostly for marketings sake)…and I don’t think it can/will work that way.

  74. JLM

    .Grit. In Texas, folks who have grit are said to have “sand”.Have no idea WTF that comes from but I know what it means.You’ve got sand, my friend.JLM.

  75. Elia Freedman

    How did you handle them once they reappeared? Did you ever forgive them for abandoning you? I don’t know how I’d react. I’d be pretty pissed. Loyalty is huge for me.

  76. PhilipSugar

    Made me laugh. My only point keeping with the sports analogy is that you have fair weather fans (bad), but then you have the people that show up at your door to heckle you or tweet really nasty stuff about you (ugly)When things are going bad, I’ve never seen the good, just the bad, and the ugly. And while the bad isn’t good, its not ugly.

  77. Elia Freedman

    Thanks, Charlie. Very interesting.

  78. LE

    Not having any experience with cats it took me a while to figure out that my wife’s cat didn’t pay attention to me because I wasn’t the one feeding the cat. So every now and then I will take some food in the cup, jiggle it (to make noise). Now the cat gives me all sorts of attention that I never got before. Because they see that I am also a source of a benefit to them. And this is when the dish is already filled. Just the act of giving food has changed the cat’s attitude.

  79. sigmaalgebra

    Various forms of petting, playing, etc. alsohelp.

  80. ShanaC

    i love that song