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"World of DaaS"

Annie Duke - winning bets: decision science in venture capital

Feb 25, 2025
Annie Duke, a former World Series of Poker champion and bestselling author, dives into decision science, revealing how cognitive biases impact venture capital. She discusses loss aversion, the intricacies of reading people—both at the poker table and in business—and the dangers of trusting intuition. Exploring the psychological dynamics behind investment choices, Duke emphasizes the need for a structured decision-making approach. Tune in for insights on balancing risk perception and the art of understanding human behavior in high-stakes situations.
53:24

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Quick takeaways

  • Cognitive biases, such as overreliance on gut instincts and poor record-keeping, can significantly impair venture capital decision-making processes.
  • Mental accounting and loss aversion influence investors' perceptions and decisions, often leading them to irrationally hold onto losing investments.

Deep dives

Cognitive Traps in Venture Capital

Venture capitalists often fall prey to cognitive traps that undermine their decision-making processes. One prevalent illusion is the belief in gut instincts, where investors rely too heavily on the intuition of a perceived 'magical investor' for assessing talent. This reliance can cloud judgment, as it leads to a lack of objective evaluations based on evidence and data. Furthermore, issues such as poor record-keeping and selective memory exacerbate this problem, causing investors to attribute success to their abilities while dismissing failures as mere bad luck.

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