Lemons Ripen Early

In VC there is a saying that “lemons ripen early”. Bad investments usually die early, while winners take time, leading to the “scary” J-curve. This is one reason we focus on late-stage VC. We will hardly carry sour lemons, since we are able to cherry pick the almost ripe outliers. Usually, the worst thing that can happen is to have temporally bought “expensive” shares, but we can coolly rest on them and wait for a market mood swing.

Interestingly, the idea that “lemons ripen early” applies to fundraising too.

Fundraising is not easy…

Let’s say, if you approach 10 investors for funding, 5 will tell you NO quickly. Because straight noes come quickly but YESSES take months – this is also true for founders raising capital.

The noes are always said in a polite way: we are revising our allocation among the different asset classes; we need to scale back in VC, and so on.

Furthermore, psychology often drives behavior in the opposite direction of what investors should be doing — people invest the most amount of money when the market is about to hit its peak, while when the market falls everybody sells.

As a result, after receiving so many noes in such a short time, your ego gets shattered, your problem becomes a psychological one, and you can easily give up (as many do).

However, persistence over time pays off.

If you are confident the opportunity is good, that you are fully committed and doing the best possible work, you will keep moving ahead and you will eventually get to the finish line.

Conclusion

In just one month we will be closing our second fund. There is still time to invest, you are welcome to join Fabrica Ventures Fund II.

If you do not join now to take advantage of the current deep discounts in the secondary market, we are sure you will come in our third one — by then, we will have gained another two to three years of valuable experience in the SV ecosystem that is powering humanity for the better.