Last week, I had the chance to catch up with Brad Feld over lunch while he was camped out at Union Square Ventures. It was great to finally sit down and chat with Brad face to face, as we'd played "email tag" far too often in recent months. We missed each other when I was in Boulder in March, and then I couldn't get free in July when he was last in the city.
Alas, good things come to those who wait and we riffed about myriad topics in between bites of delicious sandwiches at 'wichcraft. One of the topics we touched on was a recent post Brad made on AskTheVC:
Q: What is the one common element you’ve seen in successful VC’s?
A: (Brad) This is an easy one. Before the snarky ones in the crowd answer “nothing”, I’d suggest that its “optimism.” I have yet to meet a successful VC that isn’t optimistic about the future and the companies he is involved in. I particularly like the Wikipedia description of optimism, which is “the overarching mental state wherein people believe that things will more likely go well for them than go badly.”
We were in agreement that Optimism is a quality universally required by successful venture capitalists. But what about public equity investors like yours truly? Is SKEPTICISM the appropriate analog for public equity investors?
2 a: the doctrine that true knowledge or knowledge in a particular area is uncertain b: the method of suspended judgment, systematic doubt, or criticism characteristic of skeptics
There is certainly an argument to be made for skepticism as a necessary trait of successful public equity investors. Company management will always tell you things are going great, until they're not. The next time a management team signals problems BEFORE a thoughtful analysis of the fundamentals warns us will be the first. Aspire for the best, but prepare yourself for the worst.
But the more I think about the idea the less convinced I am that skepticism, by itself, fits the bill. I also think successful public equity investing requires pragmatism, decisiveness and circumspection.
What do you think? And what qualities do you believe all investors share? I can think of many qualities that successful venture, private equity and public equity investors have in common.