This video interview with Bill Reichert co-founder of Garage Venture, one of the world’s original and leading Silicon Valley VCs was typical of my chat with a range of players in different parts of the world and in different areas of focus. My line of question was to get a sense of how VCs think about their decision making processes, especially in identifying winners. The sense I got was that VCs don’t think too deeply about trends in transformational technologies, partly because a successful VC cannot be too judgmental. I am fully aware that i am saying this about one of the most experienced VCs in the world with more than 30 years of history in successful investing – it’s not like they don’t know. To be sure, they do have an outline opinion of the major trends. But when you try to drill them down, they don’t want to pre-judge. VCs are different from private equity or investment analysts in this regard. When we follow some of the successful stories (even that of Twitter) you get the sense that a VC cannot be too prescriptive about how and where the winning formulas comes from, because the story evolves based on so many variables. So you will see that when I ask Reichect if he has a mental map of how hardware technology has been evolving from mainframes to distributed computing to cloud and machine learning, he gives me the sense that he really lets his investments make those decisions. Also, this interview was done in June 2020, only the second quarter of the pandemic and his investees are not out of cash as yet, and have been mostly hunkering down. But he does speak broadly about how the mechanics of valuation can be misleading.
The full transcript of this interview is on The Asian Banker website.