The quest for scale has turned much of venture capital into a box-checking exercise. Investors simply ask whether an opportunity meets the c…

The quest for scale has turned much of venture capital into a box-checking exercise. Investors simply ask whether an opportunity meets the criteria of "legible", so that it may attract downstream capital at an attractive multiple. For early stage investments, that usually means emphasising founder attributes and credentials, which raises two problems: 1) The Great Man Fallacy Where investors assume the success of a company is due to the intrinsic qualities of its founder, rather than understanding those qualities developed alongside the success. (e.g. Using leaders like Jeff Bezos or Elon Musk as a model for success, in a way that would preclude a young Bezos or Musk from accessing capital.) 2) Overfitting Where investors adopt folklore about founder attributes that are predictive of success, based on spurious correlations which conveniently enable accelerated deployment and reduce career risk. (i.e. Using patterns and simple narratives that build confidence around an investment, rather than embracing the idiosyncrasy of greatness.) Both of these habits produce predictably bad investments, and missed opportunities, because they narrow the aperture of what is considered. Instead, investors should be looking at the whole picture through the lens of "entrepreneurs as designers of problems worth solving", to borrow from a recent paper. The atomic unit of entrepreneurship is not the founder, nor the idea, but the unique alchemical mix of both.

Source: Yohei Nakajima (X) | 2026-04-26

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