Hunch investing

Rob Go wrote something important about venture capital that I can't stop thinking about...

He argues that venture capital needs to return to funding "hunches" — those non-consensus, somewhat speculative views of the future based more on intuition than facts.

Over the past few years, venture capital has shifted towards two dominant styles of investing:

1. The Factory Model: Pattern-matching consensus trends and building startups on an assembly line.

2. The Master Plan Model: Huge seed rounds ($10M-$100M) backing proven founders to pursue grand visions.

Both of these approaches miss something crucial about early-stage investing.

The truly transformative, 100X opportunities often emerge from hunches. They start small. They're not fully formed. They come from founders connecting seemingly unconnected dots or noticing subtle shifts in the market.

Most dedicated seed funds are caught in the middle — competing against mega funds willing to pay astronomical prices for proven founders, or against accelerators operating at unmatched scale.

Rob's insight is that right-sized, focused seed funds are actually best positioned to cultivate these opportunities. It requires less money but more attention. It demands investors who operate closer to the ground.

It may not be the biggest or sexiest game to play, but it might be the most important one.

h/t to Rob Go for articulating what many of us have been feeling