Building Your Anti-Portoflio

Last week True Bill was acquired for $1.3B by Rocket Companies. I met the founders of True Bill in 2017 when they had just launched their product and were probably raising at a ~$20M valuation. We didn’t invest…

Last week True Bill was acquired for $1.3B by Rocket Companies. I met the founders of True Bill in 2017 when they had just launched their product and were probably raising at a ~$20M valuation. 

We didn’t invest…

The sad part? This has happened to me many times. It’s part of life as a startup investor. Here are some more big misses: 

  • Greenlight Financial - Saw at series A, currently valued at $2.3B valuation
  • Ramp - Saw at seed, currently valued at $3.9B valuation
  • Pipe - Met the founders pre-launch, currently valued at over $2B

Honestly, this list could go on forever…

The concept of tracking companies that you passed on investing into, that have turned out to become amazing investments, is called the “anti-portfolio”. 

My only goal for today's post is to make sure you start building your anti-portfolio. 

Today we’ll explore: 

  1.  💸  The Anti-Portfolio: How to know if you’re “in the flow”
  2. 🎓  Learning from $B Mistakes: Building your pattern recognition

Today, we’re keeping it short with one simple lesson…humility is everything. 

The simple fact is that you only have so much time and capital. Inevitably you’re going to miss some amazing investment opportunities. It’s important that you learn from them.

Let’s start with a brief story…

In August 2012, Brian Armstrong (CEO at Coinbase) emailed Kurzweil, then a vice president at Bessemer. Armstrong wrote:

Was great chatting about bitcoin and coinbase yesterday.  Not that I put much stock in such things but TheNextWeb seemed to think we were one of the top ten companies at demo day yesterday.

We have 200k committed so far of our 500k round (including two YC partners who invested personally).  The cap is 10M and we're looking to close the round in the next two weeks so we can get back to work on the site.

What questions can I answer for you in the next two weeks that would cause you to invest in Coinbase?

Kurzweil responded brusquely:

Hey Brian — thanks for the follow up. There’s real [sic] no questions you could answer that would cause me to invest! It’s too early for us; we don’t do much seed investing unless we have a specific thesis in an area and we don’t here. Good luck.

Needless to say, Kurzweil missed big time here. Investing in Coinbase at a $10M valuation would be a 5,700% return today (Coinbase is valued at $57B). 

This is an example of an anti-portfolio company, and while this is not good news, Bessemer Venture Partners takes the opportunity to learn from its mistakes.

Introducing the Anti-Portfolio:

Bessemer Venture Partners is one of the oldest venture capital firms in the world - they’ve made over 1,195 investments and have over 273 exits, including Pinterest, Linkedin, Twilio, Twitch, and Shopify. 

During this time, they’ve learned that despite the number of great companies you ultimately invest in, there will be many more that you don’t. 

They developed a process called the “anti-portfolio”, in which they track investments they passed on that ended up performing incredibly well. In doing so, they can reflect on what they missed and where they went wrong. 

Here are a few of their misses:  




Having a strong anti-portfolio is a good sign. It means you’re in the flow. You’re seeing the right companies, you just need to get better at making sure you’re picking the right ones to invest in.

Learning from $B Mistakes: 

Tracking losses is not important if you don’t take the opportunity to reflect and learn from them. Here’s what I'd recommend. 

Create a Google Sheet or Excel sheet and list all of the companies you’ve had the opportunity to invest in and spent time reviewing. 

Make it simple with 4 columns listing company name, investment decision, terms, and the logic for your decision. Something like this…


Over the course of 3-5 years, this list will grow to hundreds of companies, meaning there are hundreds of opportunities to learn and improve. 

Some of the best VCs use this process to hone their skills. 

My learnings from this process: 

  • Understand the market: An amazing founder in the wrong market can lead to them bouncing around the walls of that bad market and failing (e.g software for colleges or universities). An amazing founder in an OK market can produce great results. An amazing founder in an amazing market can produce extraordinary results. 
  • To invest in more companies: Having a small basket of concentrated bets at the early stage is very risky. I need more exposure. 
  • Terms are important: As a small check writer (angel investor) it’s incredibly important to invest at the earliest stage possible to buy as much equity as possible. 
  • Vision Matters: Make sure vision is clearly articulated. I have passed on amazing investment opportunities because I didn’t take the time to understand the big picture. 
  • Be a lemming: They say being a lemming (following the crowd) is a bad thing, but in the Venture Capital space, it can lead to compounding benefits. The company is able to attract more capital, more marketing comes its way, more customers hear about the company, etc. 
  • Traction is everything: Growth is everything in startups. Companies that I met early on that were growing incredibly quickly for a sustained period of time often maintain this growth trajectory.
  • And many more!

You may learn you aren’t seeing any good companies and that you need to find alternate sources of deal-flow, or that you’re seeing great companies, you just aren’t investing in them, or maybe you’re investing in the right companies, you just aren’t investing enough.

Keep these lessons close. They help build your pattern recognition so that when you see a promising company, you’ll be able to move quickly. 

Give it a try! Thanks all! ✌️