A Dollar and a Dream

Anyone remember Curtis Sharp? A long time ago, Curtis won a $5 million New York Lottery jackpot and he spent the rest of the 1980s sashaying around New York in bespoke suits and bowler hats attracting crowds wherever he went. Curtis was the Man. Charismatic and impish, Curtis was the Toast of the Town.

I once saw Curtis at a Yankee game and the aura around him was palpable. He was Electric. People just wanted to touch Curtis. Maybe some of that luck would rub off.

That afternoon, a few rows behind us, a drunk kept yelling at no one in particular: You cant win if you dont play! I thought that the guy was pretty creative for exhorting the listless Yanks (it was 1989, after all) to get in the game by using the Lotto marketing slogan within earshot of Curtis. I appreciated the confluence.

I think of Curtis often . . . around my shop, Ive started calling Curtis the patron saint of LPs who invest in venture capital funds. Dont get me wrong, I love VC. We continue to find extraordinary people doing venture investing in extraordinary ways.

It just strikes me that when you push some LPs to articulate why they have outsize venture commitments when history shows that only the smallest slice of the business has rewarded the faith, they throw out New York Lottery slogans with Ivy League veneer. They use words like optionality, and asymmetric payoff. They might as well be mimicking the catchphrases from the Lotto TV commercials: Hey, you never know, or All you need is a dollar and a dream.

They just want to be Curtis: the guy that beat the odds. I hope that everyone makes shedloads of money and I never root against anyone. Thats bad karma. I do find myself asking, though, how many LPs who invest in venture firms are committing the fallacy of composition: Some people have made fabulous returns in venture, therefore venture will provide fabulous returns. But hey, as they say: you cant win if you dont play.