Can VCs Pick Winners? (What the Data Says)

The Power of Hustle in Early-Stage Investing

• 💡 Hustle is defined as great execution and high velocity, identified as a leading indicator of success from early accelerator data.
• 🚀 It's observed through sprints and throughput, like shipping 10x more code, rather than just a pitch.
• ✅ Quantity of experimentation drives quality outcomes, as seen in Meta product managers and podcast growth.

Hustle Fund's Investment Approach

• 🎯 Hustle Fund employs a "wide-net" pre-seed strategy, often being the first investor and making intuition bets.
• 💰 The fund is less ownership-sensitive, focusing on the multiple from the entry point valuation for smaller funds.
• 🤝 They combine diversification with selective concentration, doubling down on companies that demonstrate hustle after initial investment.

Pedigree vs. Grit

• ⚠️ Pedigree is a weaker signal than commonly assumed because its value is often priced into higher entry valuations.
• 🧠 Grit and emotional intelligence are crucial, especially for founders willing to do the "nasty, gritty work" like cold calling.
• 🌱 Recruiting from state schools or individuals with a "chip on their shoulder" can lead to harder-working founders compared to those from elite institutions.

Venture Fund as a Platform

• 🎪 Hustle Fund operates as a media and community platform, offering ebooks, a YouTube channel, a newsletter reaching 500,000 founders, and 50 global events.
• 🤝 They provide value beyond capital through distribution, community, and mentorship via their Angel Squad of 2,600 operators.
• 💸 The fund maintains a small size with capped GP salaries ($210k), with the media business generating $3M in revenue to underwrite the team, aligning incentives with founder success.

Adapting to Changing Venture Timelines

• 📈 Seed-strapping allows software/B2B companies to grow profitably without constant fundraising, but it complicates traditional fund markups.
• ⏳ Longer startup timelines (10-15 years to IPO) necessitate alternative liquidity options like secondaries and continuation vehicles.
• 🗓️ Venture fund lives may need to extend beyond the standard 10 years to 15 or 20 years to accommodate these longer cycles.

Career and Life Lessons

• 🔑 Young people have a "superpower" to cold message and build relationships, which can lead to allies, investments, or crucial advice.
• 🎯 It's vital to lean into one's comparative advantage and surround oneself with people who see and nurture strengths.
• ✨ Accepting personal limitations in mid-life is linked to increased life satisfaction and focusing on what brings joy and excellence.