Passing vs. Optioning (for VCs)

Here is something you can say to someone: I won’t invest.

If you say this, sensible people won’t come back to you again. This saves effort. But it also means you can’t invest if things change. They won’t come back to you.

So most people don’t say straight no.

So they say YES or MAYBE.

Maybe-yes: “Interesting I’d like to stay close to it”

also Maybe-no: “I guess it a key thing will be to see the user traction”

Maybes however do have problems. Why come back when the further data is clearly strong? I wouldn’t come back to someone who gave a Maybe-no once my numbers were awesome.

So the person who says Maybe-no gets moral hazard outcomes — re-looks at bad stuff.

So the weird thing about Maybe-no is that the speaker DOES keep seeing people but keeps seeing the less-good situations.