Transcript excerpt from a Precursor Ventures episode discussing the applicability of the 'hot hand fallacy' to venture investing. The speaker contrasts sports (Steph Curry's shooting accuracy) with venture, noting that venture investors are often rewarded for the risks/shots they take rather than the successes they make.
One of my favorite comparisons in the entire episode was when they talked about the hot hand fallacy and talking about how, ironically, it doesn't apply to somebody like Steph Curry, who is paid tens of millions of dollars because he has a high percentage hit rate on the shot that he takes. It does very much apply to venture most cases. Josh and Jack talked about how investors are actually rewarded on the shots that they take, not the shots that they actually make. How do you think about that and venture and get comfortable with that?
