01 Mar 2019

The One That Got Away

VCs confess their biggest whiff—and what it taught them


edited by Julia Hanna; illustrations by Peter Arkle

Venture capitalist.

Spoken aloud, those two words have a ring of authority that seems to lift the profession above the realm of mere mortals. Headlines can confirm that otherworldly aura, with some investments seeing astronomical returns of 1,000 percent or more. But VCs and entrepreneurs are human—and with the US startup failure rate hovering at around 60 percent (according to a 2015 Cambridge Associates study) those home runs are far from the norm.

That makes it even more gut-wrenching to have passed on an investment opportunity that goes on to become a household name. Consider David Cowan’s (MBA 1992) initial response to eBay: “Stamps? Coins? Comic books? You’ve GOT to be kidding. No-brainer pass.” Chad Waite (MBA 1983) had this to say about a certain Seattle entrepreneur: “A guy walks into your office in the late 1980s and says he wants to open a chain of retail shops selling a commodity product you can get anywhere for 25 cents, but he will charge 2 dollars. Of course, you listen politely and then fall off your chair laughing when he leaves. [Starbucks founder] Howard Schultz didn’t see this as humorous. And we didn’t make 500 times our money.”

In the anecdotes that follow, alumni tell their own tales of a haunting “pass” and share the only return that came of it: some hard lessons learned.

Featured Alumni

Featured Alumni

Class of MBA 1995, Section C
follow @bussgang
Class of MBA 2008, Section F
follow @RytisVit
Class of MBA 1982, Section B
Class of MBA 1976, Section I
Class of MBA 1984, Section E
Class of MBA 1995, Section F
follow @jtangoVC
Class of MBA 1992, Section D
follow @fredwangvc
Class of MBA 1998, Section J
follow @bsomaia
Class of MBA 2009, Section A
follow @sunilnagaraj
Class of MBA 2010, Section F
Class of MBA 2008, Section H
follow @ethankurz
Class of MBA 1978, Section H
Class of MBA 1992, Section G
Class of MBA 2007, Section F
follow @robgo
Class of MBA 1983, Section I

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