It feels like this year has gone off at a dead sprint. Perhaps it is seasonal cyclicality and I will see it every year but it’s very noticeable to me right now. I think everyone caught up/saved up over the holidays and came out ready to rock. I’ve seen a measurable increased inbound on both the fund formation and direct deal side these last few weeks.
So far, January feels like the first two miles of a marathon. The shot goes off and the field goes off at a dead sprint! Now we’re a few weeks in and the crowd is spreading out, some people are still going out too hot, and you’re tempted to follow. It feels good and you don’t want to miss out, you don’t want to get behind your pace, and it feels like maybe you could run ahead of your pace?!?
The good news is that you know your pace. You put together a plan. Your only job is to remember your race plan. Slow down, reduce your fear of getting behind or missing out, and run your own race.
It’s the same thing with a venture fund. Planning and raising a fund is just the beginning. As you start to deploy your capital, you better have a plan. A plan for your team and a plan for the portfolio. You’re an investor and investors like to invest, the same way that runners like to run. It’s always easy to say yes and go a little faster. It’s harder to say no. That’s why it’s important to rely on your training buddy or partner to keep yourself honest. Don’t be afraid to slow down. Don’t be afraid to miss that shiny new deal. Don’t be afraid to keep yourself honest on price and conviction. You put together a portfolio plan. Know that the race is long and save your capital. Keep those reserves to support your companies when they need it most.
Rely on your partners, rely on your support team (including LPs), and go run your own race. We know that the January pace is unsustainable, we know the the crowds will disperse, and that we will find our pace for the year.
I hope 2017 isn’t a hilly course – see you at the finish line.