The Startup/Investor Disconnect
Startups are often put under the microscope when they go belly-up. The press is quick to do the forensics on what went wrong. What about the investors who put in the money? Where’s the scrutiny there? We’ve seen the bar raised for founders, but what about that other side of the table?
“Here’s the problem: this entire system optimizes for investor survival, not startup success,” said Paul O’Brien in a LinkedIn post. “A 90% startup failure rate? That’s not an inevitability…But no one in venture has an incentive to change. The funds get raised, the 2% management fees roll in, and the game continues. If investors actually cared about optimizing startup success, they’d be applying First Principles thinking, not just playing the same old VC lottery. They’d be using frameworks like the Bell Mason Diagnostic, which systematically assesses startups based on real, stage-appropriate criteria, rather than some partner’s gut feeling on whether the founder has “the right energy.”
“But most firms don’t do this because, why fix a system that already benefits them?