Precursor Ventures warns that venture partners who invested during boom periods may look skilled when they just rode the wave. Firms should wait three to four extra years before handing them leadership, since their track records conflate luck with actual investing ability.
There's not a lot of great performance data that's going to come out of that era. So if you're hoping to turn your firm over to people who made a lot of investing decisions in that window, you might have questions about, well, how much of their performance was the companies they chose and how much of it was like, the mania of that era, and what do I do with this data? And it might have just added three to four more years to your evaluation window for these people before you can determine whether you're ready to turn the firm over to them.
