Alter: Deal droughts and sunk costs cause severe VC cognitive biases
Molly Alter · Molly Alter, Partner (Northzone), $4B AUM | Software for Hardware, EU vs USA, Vertical AI, VC Biases · Sourcery with Molly O'Shea · Sep 20, 2024 · at 6:51
Molly Alter, Partner at Northzone, describes cognitive traps and behavioral biases common among venture capital investors during the deal evaluation process.
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“There's things like discovery bias, which is sort of the notion of, I found this investment, so I love it, and it's personal to me. Or there's sunk cost bias, which is really common as well. You know, I spent three weeks in due diligence, so I love it. Or, you know, kind of angst bias of, I haven't done a deal in a year, so I love this deal. Whereas if you had just done a deal, you probably wouldn't give it a second glance.”
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