Pitch Selection

May 1, 2012

I remember a very strange moment during my college interview where my obsession with baseball came into the conversation.  The interviewer asked me what I loved so much about baseball.  I listed several things that I love and then threw in a deeply held belief, “I find that baseball provides a metaphor for nearly everything in life.”  He seemed to find that amusing and quizzed me for some examples.  I offered many examples relevant to my life then and still have many relevant to my life now.  When dealing with lots of complexity, I often find baseball metaphors clarify things for me.  A recent metaphor has been coming to mind when thinking through our investment selection as venture capitalists.


First a bit of philosophical background – I’m a deep believer that companies are made and not born.  They can be born with terrific DNA and fail, and they can be born with terrible DNA and succeed.  All things considered, I’d take the terrific DNA every time, but this belief defies the way that most Venture Capitalists talk about companies.  I frequently hear VC’s say things after being pitched like “that’s a bad investment” or “that’s not an interesting company” or proudly state to others “we passed on that deal.”  Those are judgmental statements of DNA, but those comments don’t acknowledge that the company is dynamic and will change over time.  Not to mention that a good VC can make an impact on a company by helping focus its direction or introducing a key employee that becomes a catalyst to recreating the DNA of the company.


We see lots of companies that we think have very high merit, but we choose not to invest.  We see others with similar merit and pull the trigger on an investment.  At the moment we invest, we do believe that the new portfolio company is stronger than the interesting company in which we didn’t invest, but the future isn’t written yet and it’s all about the future, not the DNA. 


This leads me to my clarifying baseball metaphor – I’ve begun to think of investing much like a batter selecting pitches.  Pitch selection reflects a hitter’s estimation of the quality of that pitch for hitting, but it doesn’t define the outcome.  Some hitters dive for pitches out of the zone and hit it out of the park.  Other hitters swing at their perfect pitch and miss.  Pitch selection also reflects a hitter’s personal biases.  One hitter may just be more comfortable swinging at a high pitch than another hitter who likes to swing at low pitches; it all depends on what type of pitches the hitter or investor is most comfortable swinging at.




No doubt some pitches are better to swing at than others; much like funding startups with better DNA.  At Founder Collective, we are trying to swing at the best pitches that we can, but will swing and miss with some.  We’re also not swinging at lots of good pitches that other funds will hit out of the park.  I’m very happy with our overall pitch selection and think we’re going to have a terrific slugging percentage.  However, founders should understand that we don’t view the pitches when we don’t swing as bad pitches or the pitches when we do swing as probable homeruns.  We just have to keep looking for our pitch and take the best swing that we can.  It’s all about what happens next.