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Home 2021 Forums VC Quotes "VC is about extracting enormous signal out of very little data." Nigel Morris

  • "VC is about extracting enormous signal out of very little data." Nigel Morris

     Aram updated 4 months, 2 weeks ago 1 Member · 1 Post
  • Aram

    June 7, 2021 at 9:46 am

    “Venture is much harder than running a big public company.”

    Most people wouldn’t expect someone who has actually run a big public company (Capital One’s market capitalization was over $20 billion when Nigel Morris left it ten years after co-founding it) to say these words.

    In a recent podcast interview with Harry Stebbings (see the link below), Morris compares both jobs. In his view, operating a large public company is easier than venture investing, mostly due to the relative certainty one finds in the former. “There is data to look at.”

    On the other hand, VC investing is about making decisions based on very few signals, mostly based on the Founders’ competence and character. You need to operate with a set of hypotheses, which is a culture Morris developed for his VC firm QED, and constantly gauge how right you are.

    Can you build the team? Is the market big enough? Are there regulatory hurdles? Can you get to Series A?

    Anything can go wrong, and you need to make an investment decision based on a minimal set of data.

    🗣 Do you agree with Morris? How do you extract signals out of the data you get on investment opportunities?

    💬 Become a member to comment or post a new quote, apply here

    🔗 Listen to the 20 Minute VC interview here (from 11’12 for the context of our quote)

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