True Ventures explains their investment philosophy: maximize risk on product, timing, and market while minimizing risk on dollars and people. They write typical first checks around $2.5M, accept early losses, and discourage consensus to enable bolder bets.
One of our core tenets at True is to— and one of our core philosophies is that we want to maximize risk. We want to maximize risk on product. We want to maximize risk on timing, on market. We want to get in early and basically swing for the fences. And by the way, the idea of maximizing risk, a lot of venture capitalists won't say it, but it's like the third bullet point that's been in our slide deck when we go raise money for 13 years. It hasn't changed. We always say we want to maximize risk. But here's the thing, we want to minimize risk on the dollars we put in and on the people we invest in. So we want to really know these individuals extremely well. And what I mean by dollars is that we usually— our first investment is typically $2.5 million, right? That's less than 0.5% of our whole fund. So this is going to sound totally blasphemous, but basically it's OK to lose it. We don't want to lose it. But it's actually okay to lose it. So when we walk into a boardroom now, we're not bringing our fear of losing money because we're not investing a ton of money to start, right? We're, we're actually saying, be your creative self, pivot, do this, do, do whatever it takes to build this company, right? So that's the, that's a big part of, that's a big part of our thinking. The other aspect I would say that we've designed the firm around is we do not believe in consensus decision-making. So we don't all have to agree to make an investment. There's no point system that says, OK, if we get above 35 points, then we're going to make this investment. We actually encourage dissension. We want to disagree. So every deal we do, there's a couple people that are saying, hey, this is really cool. And there's a couple people going like, oh my god, have you thought about this, this, this, and this? That's great, right? We want that because if you're all agreeing on everything, we're playing at the lowest common denominator and not actually out there maximizing risk. But more importantly, when I walk into a boardroom and I'm actually talking to an entrepreneur, I'm not worried that, hey, you know, my other partner over there didn't think this deal was so good because frankly, we disagree almost on every deal. So it's normal for us, right? So you don't have to be right. When you first— when you make that first check. It's super important. You don't have to be right. What we're trying to do is simply create a process for maximizing risk. We follow that process, we know 6 funds in that some stuff is going to work.
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