The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: Michael Mauboussin on Good vs Bad Investment Decision-Making Processes, How To Improve Your Process, How To Know When it Needs Improving and The Single Biggest Mistakes People Make In Their Decision-Making Process
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Nov 4, 2022 
Michael Mauboussin, Head of Consilient Research at Counterpoint Global and acclaimed author, shares insights on investment decision-making. He emphasizes creating safe environments for diverse opinions within teams to enhance decision quality. The discussion highlights the complexity of distinguishing luck from skill, encouraging investors to reflect on their biases. Mauboussin also stresses understanding economic models in venture capital and the importance of personal health practices for cognitive performance, while continuously learning from one’s experiences.
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Luck vs. Randomness
- Randomness exists at a system level, while luck applies to individuals.
- Someone might get lucky in a random system, like correctly guessing multiple coin flips.
Risk and Reward
- You must be willing to lose to win, like buying a lottery ticket.
- Focus on whether an endeavor has positive or negative expected value.
Persistence in Venture Capital
- Venture capital displays high persistence of success due to preferential attachment.
- Successful VCs attract more high-potential companies, creating a feedback loop.
