Venture Investor’s Playbook

Flybridge is a seed and early-stage venture capital firm with offices in Boston and New York City.

Author: Chip Hazard, General Partner at Flybridge

“From what I’ve experienced in my time as a VC, there are 4 critical success factors to being a great venture investor:

1. Power Laws. Great venture capitalists and venture capital funds are defined by massive winners. The best investors fully internalize this power law of returns dynamic and seek to back companies that can become outliers — massive wins are all that matters in driving returns. This is covered in more detail in Part 2.
2. Market Trends. A key to investing in the best companies is to identify macro market trends early and to ride the waves of growth they create. Early-stage companies need winds at their back, so investing early behind rapidly emerging trends creates an environment for young businesses to flourish. This is covered in more detail in Part 3.
3. SSWISH. To be a great investor, you need to master the cycle of Seeing-Selecting-Winning-Investing-Supporting-Harvesting (SSWISH). This means you need to see a lot of opportunities, select the best ones, win your way into hot deals, support your companies’ growth, and navigate a path to generating liquidity from your investments. These stages all feed off each other. The See-Select portion of this cycle is covered in Part 4.
4. Concentration. The best-expected value returns are most likely the companies already in your portfolio that are “killing it”, so lean into your winners with more capital.² This should be married with a starting portfolio of more, rather than fewer companies, to account for the inevitable randomness in returns and performance.”