"We Invest in Founders" Is a Convenient Lie

Startup investors routinely claim they back founders rather than products, but their behavior suggests otherwise. At Bits and Pretzels, the author heard dozens of pitches and counted more than a hundred judges’ questions: only one concerned a founding team, while many focused on products, revenue, and traction. Investors interviewed afterward also described teams as crucial - one said they accounted for 80% of a decision - but still ruled out companies that missed required revenue or performance benchmarks. In practice, metrics and risk controls set the conditions for investment; a founder’s qualities matter only after those conditions are met.

The belief that investors chiefly bet on exceptional founders is reinforced by availability bias: famous successes such as Airbnb, Shopify, and Mailchimp are easier to recall than the many anonymous startups that receive funding and fail. Hindsight bias compounds the effect, making uncertain pivots and near-disasters look like evidence of founders’ foresight. Apple’s rescue by Microsoft, for example, could have changed how history remembers Steve Jobs. These celebrated cases are exceptions, not a reliable picture of typical investment decisions. The author’s conclusion is that “backing the founder” is largely a convenient story: when a startup meets a fund’s required thresholds, there may be little meaningful choice left among candidates, and many funds cannot deploy all their capital anyway. To understand investment decisions, examine what investors actually require, not what they say they value.