The Battlefield of Tech Investing
Tech investing isn’t a spreadsheet—it’s a storm. Markets shift like quicksand, startups explode or vanish overnight, and the “next big thing” often turns out to be a smoldering crater. But here’s the secret: chaos isn’t your enemy. It’s your playground.
In this guide, we’ll rip apart conventional wisdom and arm you with strategies that don’t just weather the storm—they ride the lightning. Forget the vanilla playbooks. This isn’t about “risk management” or “due diligence checklists.” It’s about surviving (and thriving) when the rules break down.
1. The First Rule of Chaos: Stop Predicting, Start Adapting
Tech investors love forecasts. Analysts promise 10-year growth curves, AI charts show hockey sticks, and everyone pretends they can see around corners. But here’s the truth: No one knows the future. Even the savviest VCs miss paradigm shifts.
Case Study: The “Dotcom Bubble” Reboot
Remember when everyone laughed at Webvan? Now Instacart is a unicorn. What changed? Not the idea—it was the timing, infrastructure, and consumer readiness. The lesson? Don’t judge a pitch by its historical failures. Adaptability trumps “proven models.”
Actionable Tip:
Build a “chaos portfolio.” Allocate 20% of your capital to high-risk, high-uncertainty bets. Why? Because the next Airbnb might look like a glorified hostel app today.
2. Love Your Losers (They’ll Teach You More Than Winners)
Winners get parades. Losers get post-mortems. But here’s the irony: Your failed investments are your best teachers.
The Anti-Post-Mortem Strategy
Most investors review failures to avoid repeating mistakes. Smart investors dissect why they almost succeeded. Was it timing? Team execution? A competitor’s pivot?
Real-World Example:
A SaaS startup you funded tanked because their sales team couldn’t close enterprise deals. But their product? Brilliant. Two years later, the founder pivoted to a no-code platform—and it’s killing it. You missed the pivot. Why? Because you fixated on the failure, not the potential.
Actionable Tip:
Create a “Failure Library.” Document every missed opportunity, pivot, or near-miss. Review it quarterly. Your future winners are hiding in those pages.
3. Bet on Outliers, Not “Safe Bets”
Safe bets are for banks. Tech investing rewards the weird. The companies that defy logic—Tesla, Coinbase, OpenAI—weren’t “safe.” They were outliers who rewrote the game.
Why Outliers Win:
- They ignore the herd: When everyone chased mobile apps, Stripe focused on payments infrastructure.
- They solve “impossible” problems: SpaceX’t wasn the first rocket company—it was the first to make it affordable.
- They embrace irrationality: Clubhouse’s audio-only model made no sense—until it did.
Actionable Tip:
At Evolve Venture Capital, we use the “3X Factor” framework:
- 3X the risk: If a pitch feels 3X riskier than your average deal, dig deeper.
- 3X the vision: Does the founder see 3X further than competitors?
- 3X the grit: Have they failed 3X and kept going?
4. The Dark Art of Reading Founder Psyche
Spreadsheets don’t build companies. People do. And in chaos, psychology trumps numbers.
The “3 AM Test”
Ask founders: “Walk me through your last major failure. How did you handle it?” Their answer reveals:
- Do they blame external factors (market, luck)?
- Do they pivot or double down?
- Can they laugh at their mistakes?
Red Flags:
- Founders who “never fail” (they’re lying).
- Teams obsessed with perfection (they’ll pivot too late).
- CEOs who dismiss feedback (they’ll ignore your advice).
Actionable Tip:
Invest in founders who enjoy chaos. Look for those who light up when discussing crises. Their passion for problem-solving is your best ROI.
5. Use Chaos as a Weapon
Recessions, regulatory crackdowns, and market panics scare most investors. Use them to your advantage.
Case Study: The 2020 Pivot
When COVID-19 crushed travel, a travel-tech startup we funded pivoted to virtual event platforms in 48 hours. They’re now dominant in hybrid conferences. Why? Because chaos forced speed—they had no choice.
Actionable Tip:
Create a “Chaos Fund”: A slush fund for deals that emerge during market panics. Example: When crypto winter froze VCs, we backed a DeFi protocol that solved liquidity issues—now a market leader.
6. The “Anti-Portfolio” Strategy
Investing isn’t just about what you buy—it’s about what you avoid.
Build Your Anti-Portfolio:
Track companies you passed on. Why? To spot patterns in your blind spots. Did you miss three AI startups because you hated their valuations? Maybe AI is a sector you need to revisit.
Pro Tip:
If 80% of your anti-portfolio is in one sector, you’re either a genius… or missing a trend.
7. The 100-Year Mindset
Tech moves fast, but true value is built slowly. Think like a time traveler: What will people need in 2123?
Examples:
- Climate tech (2023’s darling) was niche in 2010.
- AI ethics is today’s buzzword—it’ll be law by 2040.
Actionable Tip:
Reserve 10% of your capital for “100-year bets.” These are moonshots that might take decades to pay off but could redefine industries.
Embrace the Storm
Tech investing isn’t for the faint-hearted. It’s for those who see chaos not as a threat, but as a canvas. By adapting faster, loving your failures, and betting on the irrational, you turn turbulence into terrain.
Final Challenge:
Next time you’re analyzing a deal, ask yourself: “Does this make me uncomfortable?” If the answer is yes—dig deeper. That discomfort is where the magic happens.
Evolve Venture Capital – Because the best opportunities aren’t found on Excel sheets. They’re forged in the fire.
