Tampa, FL. April 16, 2024. Most venture capital investments fail, and with them, most venture capital funds. Sacrifice often happens in venture capital investing as choices must be made between investing in one investment or another or not adding additional capital to a previous investment.
For an experienced venture capital investor, the choice so often can seem, while uncomfortable, almost routine. Some investment choices will never be routine because lives are at stake, particularly in medical or biomedical investments. In these life-ending or altering investments, there is not only capital or reputational risk for the investor or the VC firm but often the lives of many others. In these cases, the investment decision takes on moral and economic risk. Balancing the two forms of risk is a tightrope walk for the venture capitalist. At times, the moral judgment outweighs the economic risk, and at other times, the economic moral.
A VC can also make a judgment based on one type of risk or another, and unfortunately, often due to the many variables involved in a choice, the consequences of the action, either in the short term or the long term, can neither be predicted nor foreseen. The most significant failures often have positive results, and the seemingly greatest accomplishments sometimes turn to zero.
A seemingly short-term sacrifice can have long-term effects, and a seemingly long-term sacrifice can have short-term effects. Not being willing to take risks is often a losing position. In fact, not taking risks can prove to be extremely risky. It's facing the risk of the most significant uncertainty that results in the highest reward.
Not all risk-taking will turn out well, but the more risks we take and the more we trust our judgment, the more confidence we will gain in our ability to decide correctly. And the more likely luck will be with us in an uncertain world.
About Len Batterson
From Washington University (St. Louis), Len obtained an AB in History and a Juris Doctor, followed by an MBA from Harvard and Harvard Law School Securities Law. He then joined Allstate's Venture Capital Division and became Director of one of the oldest, largest, and most successful worldwide VC organizations. After Allstate, he founded Batterson, Johnson, and Wang, the first Chicago-based early-stage tech and medical institutional VC fund, followed by Batterson Venture Partners, Batterson Cross Zakin, and Batterson Venture Capital-- all for high-net-worth accredited VC investors. Len co-authored a book called "Building Wealth through Venture Capital: A Practical Guide for Investors and Entrepreneurs They Fund."
Len helped fund several very successful entrepreneurial companies, including Cleversafe, Cybersource, Beyond.com, Atlantic American Cablevision, Health Magazine (acquired by AOL/Time Warner), Illinois Superconductor Corporation, Nanophase Technologies, Corporation, AOL, Allscripts, and Cybersource. Many have become multi-billion-dollar companies and major venture capital home runs. AOL was the largest merger in American business history at $354 billion.
About CEA Group
Founded in 1973, CEA is a leading provider of investment banking services. With a team of experienced personnel worldwide, CEA has an unequalled depth and breadth of industry knowledge, expertise and long-standing industry relationships. CEA has completed over 1,000 transactions totalling $60+ billion in more than 60 countries. CEA’s reputation and track record of success are built on delivering innovative, value-added solutions and services to clients worldwide. CEA Atlantic Advisors, LLC is a FINRA Registered Broker-Dealer and a member of SIPC.
CONTACTS
CEA
Chairman & CEO
Tel:+1 813-226-8844
VCAPITAL MANAGEMENT
Founder, Chairman of the Board, Chief Investment Officer
Tel:+1 312-690-4171 ext. 101
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