Charles HudsonFounder and Managing Partner, Precursor Ventures

Is memory a reliable tool for investors?

29 Jun 2025 · 1 min

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Charles Hudson argues that relying on memory is unreliable for tracking investment rationale because hindsight bias makes past decisions seem better than they were. He recommends capturing thoughts and impressions about companies and founders in real time (documentation at the time of write-up) and periodically updating those notes to maintain honesty about past judgments.

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He said, basically, memory is a crappy way to try to keep track of things. And I agree with you. The one thing I realized probably a few years ago was people would ask me, what did you think of that company? We invested. Inevitably, I had some rosy, overly optimistic view of how perfect the company was when we invested. And I was like, well, the only way I can think of to solve this hindsight bias is to actually capture your thoughts in the moment. So now we have a whole process of, like, how do we capture at the time of Wire, what do we think is going to happen? We do more as a documentation of what we think about the founders. And I find if you capture that in real time, it's the only way to be honest. Yeah. And. And then periodically, you want to update your thinking. So.