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Monday
Jan172011

Mistaken at the top of one's voice

Let’s face it.  It takes a fair amount of hubris to play venture capitalist.  We have the confidence to choose perhaps one out of every fifty companies that we consider in any depth, we pride ourselves on our judgment of entrepreneurial character, and we freely offer advice in and out of the boardroom to our portfolio managers, themselves deep experts in their fields.  We do so while betting on growing and volatile industries characterized by rapid technological change.  And we continue to do so although we collectively have now compiled a 10 year track record of futility.

At Osage Partners, we even manage to take pride in our modesty.  We believe that entrepreneurs are the engines of wealth creation, and venture capitalists are the caboose.  We articulate our respect for entrepreneurs by celebrating their role and, to some extent, downplaying our own.  When a management team shows up at Osage for a 10:00 pitch, the meeting starts at 10:00.  Every Osage team member in the room has read everything the entrepreneur has provided us – before the meeting.  We have a no Blackberry rule.  And, where possible, we give direct and immediate feedback on what we like and don’t like about the opportunity.  In other words, we believe that the entrepreneur’s time is no less valuable than our own.

We try to treat modesty as our core investment philosophy.   We get nervous when we feel too strongly about making an investment.  I like to think about the lessons to be learned from Ambrose Bierce’s The Devil’s Dictionary, starting with:  “Positive” means “Mistaken at the top of one’s voice.”  When in the past we started shouting about a deal, we have always stopped listening about it as well.  We also get extremely nervous when our co-investors start crowing with confidence.  Another Bierce reflection:  “They say that hens do cackle loudest when/There’s nothing vital in the eggs they’ve laid.” 

Modesty aside, we are still VCs, and we think we are pretty decent at what we do.  We love our portfolio and think that we bring something pretty special to our enterprise software niche.   We have done this long enough to have an idea or two that are to the benefit of the entrepreneur and to the company.  Otherwise, we would be doing something else for a living.   In the end, we try hard to balance our deep conviction in the uncertainty inherent in venture investing and our commitment to the centrality of the entrepreneur with an acknowledgment of a healthy self-esteem.   And when the latter begins to become too much, the The Devil’s Dictionary sets us straight.

Self-esteem, n.

                An erroneous appraisement

 

  *   *   *

A few other favorite Bierce definitions:

Future, n.

The period of time in which our affairs prosper, our friends are true and our happiness is assured.

Opportunity, n.

                A favorable occasion for grasping a disappointment.

Patience, n.

                A minor form of despair, disguised as a virtue.

Vanity, n.

                The tribute of a fall to the worth of the nearest ass.

Zeal, n.

                A certain nervous disorder afflicting the young and inexperienced.  A passion that goeth before a sprawl.

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