Venture capital has developed a remarkable talent for discussing everything except the work.

We hide behind LinkedIn threads of impressive charts, polite panels where everyone agrees loudly, and LP conversations where “portfolio construction” becomes a stand-in for seriousness. We have turned the industry into a financial optimization problem: a legible game of spray‑and‑pray, reserves, and fund sizes. I used to participate in that framing because it’s convenient. It lets you sound like an expert without ever having to reveal what you actually believe about the companies you back – beyond a layer of acceptable wording.

As the industry scaled, this focus on “exposure” created a specific kind of silence: the silence of an investor who has written a large check into a company, but can’t explain what the company actually deeply does.

And it’s not a size issue. The market is full of funds – small and large – whose operating model is ride‑along investing: pay for optionality, outsource the hard thinking, and call it prudence. They don’t form positions in the intellectual sense. They don’t do construction. They are present on the cap table, absent from the work. In my worldview, that isn’t a harmless stylistic difference; it’s a quiet abandonment of what makes venture worth doing in the first place.

We started treating startups like tickers and fund management like index tracking. A lot of selection and signaling, and very little construction.

The parts of the journey that decide outcomes (and personal rewards) rarely fit in a memo. They happen in the territory, not the map – down in the industrial friction where a product stops being a feature and starts being a utility. It is the messy discovery of why a customer actually pays, the identification of a structural moat before it has a name, and the granular understanding of why a specific market is finally ready to break.

This is an attempt to describe a different lens: venture as a producer’s craft, where the goal isn’t to buy tickets to a lottery, but to underwrite a path – where your life’s work isn’t the management of large position catalogues, but the intellectual discipline of close companionship with builders. So it is also a fundamentally builder-aligned craft: taking real risk with founders, concentrating attention where it can compound, and structuring ownership so that effort is consequential.

In early-stage venture, the largest value inflections tend to come from a small number of non-linear decisions made under genuine uncertainty. The edge, when there is one, is whether you can repeatedly make – or materially influence – those decisions well, and be structurally positioned to matter when they occur. That requires more than deal “access” or a nice network: it requires an explicit view of how value will be created in this specific company – what wedge unlocks distribution, which customers pull hardest, what must be true for unit economics to compound, what talent and sequencing the organisation needs, and which forks are existential. Without that view, you’re mostly purchasing tickets and hoping the market writes the story for you; with it, you’re underwriting a path.

Venture as elite curation, not ticket collection

Other curation professions learned a distinction venture still muddles.

In music, a playlist is selection; producing is construction: sequencing, shaping, fighting for a sound no committee would greenlight on first listen. In sports, scouting identifies talent; coaching and franchise-building create systems that turn talent into performance. In publishing, acquisitions can become merchandising; developmental editing turns something initially awkward into something inevitable without sanding off its originality.

Venture, too, has drifted toward the playlist model: a lot of selection, a lot of signalling, and a lot of optionality bought in small slices.

What I increasingly respect – and have tried to live by – is the kind of investing that stays close to the entrepreneurial project without pretending to be the entrepreneur. Call it the producer model: fewer commitments, deeper responsibility, and enough ownership that the investor’s incentives have teeth – so you are structurally positioned, as above, to matter when the forks arrive.

The uncomfortable middle: big checks, small consequences

So here it is, the feature of modern venture that doesn’t get discussed enough, perhaps because it is awkwardly common: large checks with surprisingly low alignment.

Plenty of funds write big tickets into competitive rounds, end up with modest ownership, and contribute little beyond social proof. They might even look “concentrated” on a slide, but behave like tourists on the cap table. They have scale, brand, activity – yet often lack a position that expresses a falsifiable view, and lack ownership that makes that view economically meaningful.

This is how you get an industry that can appear simultaneously confident and curiously hollow. It also feeds a public gospel that goes something like: “VCs are overconfident; therefore the rational response is diversification.”

That gospel sounds prudent. It also gives the whole game a whiff of fatalism: since venture people are allegedly drunk on narrative, better to buy lots of tiny slices and let statistics do the work.

Why “diversify because VCs are arrogant” misfires

I understand why diversification became the reflex. “Asset class” outcome distribution statistics imply to go for many shots on goal. Venture has earned its reputation for grandiosity, and the incentives rarely punish confident narratives when they were fashionable at the time. But the leap from “many VCs overestimate their ability” to “therefore the model should be to buy tiny slices of everything” is a tale of overshooting.

Diversification can protect you from being wrong. It cannot protect you from being irrelevant.

When you own too little and spread yourself too thin, your role collapses into narrative maintenance and calendar churn. The work becomes (social) commentary – passive rather than constructive. Founders don’t experience it as risk management; they experience it as noise. It doesn’t fulfill venture’s mission, and it changes the nature of your work.

A builder‑aligned fund behaves differently because it has to. It isn’t merely selecting companies; it is underwriting a path, and paths have forks. That demands a view on value creation and the willingness to act when the forks arrive: what distribution will look like, what hiring sequence will work, what pricing must become true, what the company should stop doing even if it’s beloved.

The deeper point is that venture only earns its place in the world if it can generate something like outperformance. Otherwise it’s an expensive way to approximate an index – with worse liquidity and better dinner invitations.

The usual response to that is the overconfidence critique: nobody can know who will win, so the only rational posture is diversification. That sounds modern, calculated and modest, but it quietly gives up on the premise that venture has a craft, is a craft. And most important is to note that a producer‑style fund doesn’t require total clairvoyance. It requires a structure in which decision‑quality and attention can actually compound: meaningful ownership, a falsifiable view of value creation, and enough proximity to influence the non‑linear forks that shape outcomes. In that model, humility about prediction doesn’t lead to passivity; it leads to better underwriting.

This is also why fund design matters so much. When the fund is right‑sized to the exit environment, you get a higher margin of safety and a cleaner path to outperformance: you don’t need miracles, you need a few companies where your ownership and your work meaningfully participate in what gets built.

“Venture Lotto” and the case against ticket‑buying

Ho Nam of Altos named the disease more bluntly than most investors dare to in public. In Venture Lotto, he describes strategies that “rely primarily on luck and randomness,” and argues that too much money has ended up with “deal pickers (and deal flippers)” rather than “company builders.” His line – half admonition, half clarity test – has the charm of a good insult: “If the answer isn’t obvious, then go start a hedge fund.”

You don’t have to accept every edge of his critique to take the core point seriously: buying optionality is not the same as taking responsibility. You can own a spreadsheet full of exposure and still avoid the actual work of turning a fragile thing into a durable one.

This clarifies a subtle mistake in the usual debate. Concentration on its own isn’t the opposite of “Venture Lotto.” You can hold a short list of companies and still behave like a spectator. The opposite is taking positions: positions in the financial sense (ownership that matters) and positions in the intellectual sense (a view you’re willing to be wrong about).

The “fundable” trap, and the convergence machine

“Venture Lotto” doesn’t happen in isolation. A well-circulated essay recently made a clever, slightly unsettling observation about contemporary startup culture that ties into it: ecosystems have started training founders to “build what’s fundable” rather than build what’s true. You see it in the way founders learn to speak in investor dialects and in the way investors increasingly reward legibility – ideas that already look like yesterday’s successes.

And venture itself has responded with “machinistic” reflexes: as the industry scaled, strategies converged. Everyone reads the same threads, uses the same frames, pursues the same archetypes. Independent thought becomes a personality quirk rather than a competitive edge. The industry – born to fund non‑consensus ambition – develops a remarkable talent for manufacturing consensus.

These are not separate phenomena. They reinforce each other. When investors converge, founders adapt. When founders adapt, investors feel validated and decipher legible signs. The loop tightens and chips get placed quickly and mechanically. You end up with a market that is elegant in rhetoric and mediocre in outcomes – an ecosystem that can explain everything and build surprisingly little.

A builder‑aligned posture interrupts that loop by design because it forces contact with the territory: customers, long-term market developments, distribution, retention, unit economics, talent. Reality is much less impressed by what is “fundable.”

Meaningful payoff as the price of responsibility

This is the point that people prefer to keep implicit: a fund can’t demand builder‑like effort, producer craft, and then offer allocator‑like economics.

Meaningful payoff doesn’t mean mimicking founder outcomes. It means ensuring that if you take responsibility – time, attention, reputation, hard conversations – the upside is not cosmetic or small. If it is cosmetic, behaviour becomes cosmetic. You get “support” as performance, not as practice.

When ownership is meaningful, incentives change. Attention becomes precious. You spend less time on optics and more time on what will make the company real. You can be blunt early because you’re not renting exposure; you’re building a position.

This also produces a curious thing that the diversification gospel often misses: a properly structured, risk‑aligned fund tends to have a significantly higher margin of safety. Not because it diversifies more, but because it isn’t relying on an implausible miracle to make the model work. The fund’s size, ownership, and expected exit environment actually agree with each other.

Europe: a smaller lake rewards depth and alignment

Europe sharpens all of this because it does not offer infinite forgiveness.

Exits are generally smaller, paths to scale are more constrained by fragmentation and capital markets, and the number of truly gigantic outcomes is lower. Depending on dataset and definition, U.S. median VC-backed exits tend to come out meaningfully higher than Europe’s – enough to make the point: being a small passenger is less likely to clear your hurdle here.

A builder‑aligned fund in Europe tends to do two things differently.

First, it aims to be meaningfully inside the outcomes that do happen – through ownership that matters and attention that compounds. Second, it tends to be right‑sized relative to the ecosystem, which creates that margin of safety. When your fund size matches realistic exit pools and your ownership matches your involvement, you are not dependent on a single mythical event to make the model work. You can be wrong on individual companies and still have a coherent path to strong fund‑level success.

That is what risk alignment looks like in practice: not bravado, but a structure that makes the work survivable and the wins consequential.

The fund is the product

All of this brings me back to portfolio construction, but with a different starting point.

Portfolio construction isn’t the first question but a downstream one. The first question is what posture you take toward the entrepreneurial project. Are you buying tickets, or are you building positions? Are you optimising for exposure, or for responsibility? What is your life’s work?

If you choose the builder‑aligned posture, the fund has to be designed to support it: a fund size that permits meaningful ownership, a roster small enough for real attention, and incentives that reward the unglamorous work – being present when the story breaks, not only when it reads well. Fund size should scale with repeatable edge, not with fundraising appetite. And if the upside is cosmetic, behaviour becomes cosmetic too.

Europe doesn’t need more tasteful ticket collectors. It needs more investors willing to underwrite the weird, resist the gravitational pull of consensus, and structure their funds so that alignment is not a slogan but a constraint.

That’s the lens I’ve gradually arrived at. It is less elegant than the standard portfolio debate, and more demanding. It also feels closer to what venture was supposed to be in the first place.