When Venture Capital Fails Spectacularly: The Bessemer Venture Partners Story
WE’VE all heard about the titans of the silicon Valley venture capital industry. One day they put 30 cents into the stock of some company enabling people to show cat photos to each other and then three weeks later they’re running off with $10 billion from the IPO.
All most, most, annoying.
However, there’s one company out there that has been doing this venture capital stuff for over a century now. And they’ve made some quite glorious suck ups. No, not in what Bessemer Venture Partners did invest in, rather in what they didn’t. And they’re self-confident enough to tell us what they did fail to invest in too.
On investing in e-Bay:
“Stamps? Coins? Comic books? You’ve GOT to be kidding,” thought David Cowan. “No-brainer pass.”
On investing in FedEx:
Incredibly, BVP passed on Federal Express seven times.
And the Google story is great:
Cowan’s college friend rented her garage to Sergey and Larry for their first year. In 1999 and 2000 she tried to introduce Cowan to “these two really smart Stanford students writing a search engine”. Students? A new search engine? In the most important moment ever for Bessemer’s anti-portfolio, Cowan asked her, “How can I get out of this house without going anywhere near your garage?”
They might actually be a good firm now. Not just because they’ve clearly got a sense of humour. But because fucking up is how we learn things and the most important thing we learn when fucking up is not to fuck up in that manner again.
That still leaves a near infinite number of ways in which we can still fuck up of course, but each mistake means that we’re one less method better off than everyone else.