“We Hate Hot Deals”

I’m listening to John Frankel on the redoubtable Mark Suster‘s “This Week In Venture Capital“. It’s a great interview in general, but I love this particular point:

John says he hates hot deals because it means the company is solving a currently fashionable problem. As a result, the company is doing its financing while it’s small, before it’s achieved a dominant market position.

John would much rather invest in a company that is solving a problem a few years out, so that it will have time to grow *before* the rest of the market catches on.

I couldn’t agree more. I love when someone articulates a point I’ve understood intuitively, but not intellectually.

1 thought on ““We Hate Hot Deals”

  1. This is a very good point.

    If you look at many huge companies today, they are the ones that looked forward instead of just focusing on what was happening around them.

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