Taylor Davidson Talks About Why VCs Regret That “Make-Up” Investment

Taylor Davidson is a Senior Associate at kbs+p Ventures, the thematic investment arm of kbs+p. He is a mentor and advisor to a range of early-stage ventures, a mentor with Launch Pad Ignition (a New Orleans-based TechStars accelerator) and a NYU New Venture mentor. He creates plug and play financial models for start-ups, over 6,000 of which have been downloaded so far.

You always remember the ones that got away. Tell us about the startup you regret passing on the most.

Here’s the thing: we remember the successes that got away from us, but do we remember the failures that slipped away from us, thankfully? Not in the same way. There’s a major cognitive bias here. We often learn the wrong lessons from individual results and miss the overriding big picture. That big regret about missing on a startup may directly lead to an even bigger regret with the corresponding “make-up” investment.

The last thing you want to hear from a founder is…

“We have no competition.” Whether they’re pitching for investment or operating the company, it shows a major lack of market awareness and vision.

What “me too” trend should we avoid or invest in?

The world doesn’t need another photo-sharing app.

We’ll always need better ways to manage data and turn information into intelligence and wisdom. “Big data” isn’t new: the equilibrium level of “big” changed throughout the years, constantly changing our notion of what’s “big”. More importantly, the basic challenges of developing better ways to make better, easier, faster and cheaper decisions is constantly changing. Rather than investing in “big data”, I’d rather invest in “big wisdom”.

What’s the strangest pitch you ever heard?

The strangest pitches I’ve heard are when the entrepreneur doesn’t have a solid idea of how they’re going to spend your investment. Believe it or not, I was in a pitch where an entrepreneur couldn’t tell me why they were raising a certain amount of money, or what they were going to spend it on. Why bother raising money if you don’t have an idea what you’re going to spend it on?

What’s the best way to ride out a bubble?

Investing in a great entrepreneurial team is always a great strategy. Great teams are best placed to maximize the opportunities in the bubble and best prepared to adapt and execute if the bubble bursts. In a world where it’s a safe bet that things will change, I’ll bet on people that can change with it.

Explain, without jargon, what the word pivot means to you?

Same fundamental goal, same insights, similar strategy, applied using different tactics.

Taylor Davidson Talks About Why VCs Regret That “Make-Up” Investment