January, 2026 - Cup of Zhou

January 22, 2026January 21, 2026

Diligence on a GP’s Social Media Presence

A lot of what I will say applies similarly to assessing founders and with senior talent, but for the sake of this blogpost, I’m going to focus primarily on doing diligence on GPs.

Sequoia’s Pat Grady co-wrote a piece on AGI that’s been making its rounds the last few days. FYI, this post has nothing to do with AGI, so don’t get your hopes up. But in it, he shares:

Note the highlights above are all around how to better understand an individual’s internet presence. While not all-encompassing, understanding someone’s brand via their social media is more than just how many followers, likes, comments, and shares. As my good YouTuber friend once told me, “Not all subscribers are created equal. English-speaking personal finance content get paid the most per impression.” Analogously, the same is true for LinkedIn or Twitter/X content.

Just because you have 25K followers, how often are you just resharing your employer’s content? Or your portfolio company’s content? How often do you share your thought leadership? Do people follow you because of your perceived status or do people follow you because of the weight of your ideas? There’s a great Simon Sinek talk about the former Under Secretary of Defense on this, which I won’t bore you with the details, but if you want the full story, it’s here. In summary, if you no longer held the job title you do today, would people engage with you differently?

That’s what I’m trying to figure out.

The first filter is: What is your insight per post ratio? This includes reshares and comments they make on other people’s posts. At a high level, do you recognize what good content looks like?

The second filter is: What is your original insight per post ratio? How much of your activity is original ideas? Is that what people engage with? Or do they engage more with your reshared content? When they do engage, how?

Level 1 is a like. The least number of clicks to engage with you.
Level 2 is a reaction other than a like. It takes a second longer to do so, but is more intentional. To be fair, a spam-like content (i.e. “LFG”, “Proud of you”, “Excited”, etc.), I also put in this tier.
Level 3 is a thoughtful comment that you can’t use on any other post. They’ve read and thoughtfully engaged back. Also on this tier is a quick reshare.
Level 4 is a thoughtful reshare. Or on Twitter (still not easy to call it X), a “quote retweet.” You’re staking not only your personal brand and reputation with your own followers, but you’re also letting others know how you’ve thought about the content being shared.

It’s not a perfect scorecard, but I do keep a rough mental tally (which goes into my own memo) of what a GP’s social brand is. And at what point was there an inflection in their thinking and/or following. Usually quite correlated with each other.

Other things I find interesting to observe, but cannot be understood in isolation:

Most frequent commenters and reshare your content
Reactions-to-follower count ratio
Connections-to-follower ratio
How similar/different their content on LinkedIn vs Twitter/X vs Instagram/TikTok vs podcast platform is
AI-search optimization (AEO): What keywords and/or questions do certain GPs own in search traffic? How does it compare across ChatGPT vs Claude vs Gemini? And in incognito AI search.
Frequency of getting tagged by others on social media outside of viral periods
Endurance of content even when little to no engagement, usually for podcasts, blogs and newsletters. And why do they continue doing so even when it’s not producing the results they desire (more of a qualitative understanding on the personality traits of a GP)
Frequency of guest appearances on others’ content channels and how do those appearances’ views compare to said influencer’s average view-to-subscriber ratio

Photo by dole777 on Unsplash

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The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

January 16, 2026January 17, 2026

What is Adverse Selection?

One of the most interesting self-reflective questions I think GPs should ask is: If someone else had the exact same strategy and offered the exact same terms, why would someone not pick you over another VC? That’s adverse selection.

One of the three pillars (or five pillars, depending on who you ask) of underwriting a venture fund is winning. The others being seeing and picking (and supporting and selling). But sometimes what’s more interesting than underwriting why a GP wins is understanding all the reasons they won’t win.

It’s an interesting thought exercise I like working through with a GP. “Why won’t a founder let you invest?” or “Assuming you wanted to invest, why would you lose out on a deal?”

The most common answers are always:

“I missed the timing.”
“There was no more space left.”
“They weren’t raising at the time.”

In my opinion, while possibly true, all cop-out answers. Then I follow up: “Assuming you wanted to invest, and there’s space left, and they’re currently raising, why would a founder say no to you?” Or “Why wouldn’t you be able to invest?” More often than not, I get an answer along the lines of: “I win (almost) every deal I want.” Or “I have yet to raise my fund.”

Even if true historically, it doesn’t answer the question. It’s like asking a job candidate: “Tell me about your weakness.” And they respond with, “I’m too honest.” Or worse, “I have no weaknesses.”

What I’m trying to get at in these questions is not the “right” answer. There is none. But rather what are the reasons you’ll fail to win a deal. Which of those reasons are areas where you would like to improve upon? Which of those reasons are areas where you will continue to be unrelenting on? What will you not change? Only then can I get a better understanding of the GP you will become 2-3 funds from now. And if so, does it make sense to do business with each other today?

There’s a Fund I GP I ended up investing in. When I first asked him the question above, he reached the conclusion that his pitch and value-add resonated more with second-time founders than first-time founders at the pre-seed stage. And given that he wanted to grow into a lead investor eventually, what he had to figure out was how to build a strong enough brand with first-time founders, requiring both education and intentional positioning. For me as an LP, it became easy for me to see how he would grow into a Fund II GP. Between then and his next fundraise, I’d just track how many first-time founders he invested in, try to spend time with them at events, and ask why did you take this GP’s check and what did you really want from him.

There is no right answer as to what founders wouldn’t want to work with you. It’s just an exercise of self-awareness, so you can figure out what’s worth working on and what’s not. Adverse selection reasons I’ve heard in the past, in no particular order, include:

Political alignment
Naming a firm after their own name instead of an ideal (yes, that is a real answer I’ve gotten before)
Speed to make a decision
High ownership targets
Response time, including taking the holidays/weekends off when their peers might still be dealmaking
Lack of brand awareness
No founding experience
No experience at a large established firm
No relationships with key potential customers
Values shared publicly / controversial opinions
Personality (i.e. too nice, people pleaser, argumentative, arrogant, name-dropping/logo-shopping, too humble, etc.)
Lack of talent networks
Having invested in a competitor
A homogenous partnership
A rumor that is widespread but may not have real credence
A single remark from an influencer in the ecosystem (or a close friend), then what’s more interesting is why someone would say something like that
The way a GP dresses (especially important in certain geographies outside of the US)
The initial outreach was done by a junior team member or a broker/dealer
Subsequent conversations done by a junior team member
A reference call with their network done in poor taste
Someone with no board experience asking for a board seat
Having someone else on the team take the board seat even though you did the deal and the founder wanted you
Aggressive term sheet terms (1X+ liquidation preferences – participating and preferred)
Having no respect for prior round investors (especially, in relation to their most helpful investors so far, often related to their pro rata)
Badmouthing their existing investors and/or teammates

Photo by Javier Allegue Barros on Unsplash

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January 7, 2026January 7, 2026

How Trees Fall

lumberjack, felling a tree, axe, emerging lp

I caught up with a single family office over the holidays. Let’s call him Mark. Mark told me that he had caught up with a Fund I GP that I had passed on. Let’s call her Susan. In that conversation with that GP, he told Susan that I introed him to another GP “Charlie” whom she knew and whom I invested in, which he eventually passed on. And Susan asked Mark why I invested. That it made no sense. That Susan herself would have never invested in Charlie. As such, she didn’t know why I would invest in Charlie and not her. After sharing that last line, with no explicit question that plead for an answer, Mark looked at me, waiting to see how I’d respond.

I stared back at him. And he to I. And I to him.

As he felt seemingly unsatisfied with my reaction, I asked him, “If I put both of these GPs on a report card, how would you score each?”

He followed up, “Susan is more experienced. She’s done X and Y. And she came from Z.”

“You’re right. Susan is all of that. In fact, on a report card, it’s fair to say that her GPA is a solid B+, maybe an A-.”

He concurred.

I went on. “And Charlie would probably score a B, maybe B-, if we were really critical. But to you, did anything about Susan jump out at you?”

“Not exactly.”

“What about Charlie?”

“Well, there’s that…”

“I agree. For me, and you don’t have to agree with my assessment, Charlie is on paper a lower GPA than Susan, but Charlie spikes in very particular areas. Areas I personally believe puts him in a position to do really well. That he will have a good chance to outperform. Susan is factually better in almost every area than Charlie is, but she doesn’t spike in any area. At least it’s not obvious to me. I like her thesis. I think she has a great GP-thesis fit. And I do believe that her thesis has a really good chance of being right, but I’m not sure she’s the only person in the world who can do that, much less the best person in the world to do it. In fact, I can think of two other GPs who spike in that thesis area where she doesn’t.”

It’s harsh criticism. And it’s not my place to give non-constructive criticism. So what I said when I passed was that we had other deals in the pipeline that were a lot more interesting to us. Which is true. But it’s not my place to say “I don’t think you’re good enough.” And she probably felt my pass was unsatisfying. Because in her shoes, I’d probably feel the same.

I don’t invest in all-rounders. There’s a time and place and industry for those. But I don’t believe it’s venture. Even less early stage emerging managers. There’s a line I’ve long liked in the F1 world. “In Formula 1 it’s nearly impossible to go from 13th to 1st on a sunny day, but it’s possible on a rainy day.” In the uncharted territory of true early, early stage investing, it’s always a rainy day. And to go from 13th to 1st, you need to make bold decisions. Measured, well-timed, but risky decisions. You need to make certain sacrifices to do so.

To me, that meant comparatively lower grade-point averages, but much, much higher select individual subject grades. In fact, only an A++ would suffice. A spike must be at least three standard deviations from the mean. As an emerging manager LP, who plans to be an active participant in the journey, naturally with the GP’s permission, it falls on me and my peers to help our GPs raise their overall GPAs, but we can’t help them spike. But in that, we must know and recognize their flaws.

One of the most interesting spectacles I’ve always marveled at is how lumberjacks fell trees. The first cut is the notch cut that indicates the direction the tree will fall. The second is the felling cut that catalyzes the tree to fall, acting as the hinge.

In many ways, the GP spikes (and flaws) makes the first cut. Whether you count it as nature or nurture. The GP’s job is to figure out which direction they’d like to fall. Or to borrow a line from Mark Manson’s most important question of your life: “What pain do you want in your life? What are you willing to struggle for? How do you choose to suffer?” To further borrow, “What determines your success isn’t ‘What do you want to enjoy?’ The question is, ‘What pain do you want to sustain?’ The quality of your life is not determined by the quality of your positive experiences, but the quality of your negative experiences. And to get good at dealing with negative experiences is to get good at dealing with life.” All in all, it’s a GP’s job to make that choice. An LP cannot make that choice for the GP. And it is a function of the flaws they’re willing to overcome, and how they want to double down on their spikes.

The second cut is for investors, board and advisory members to nudge our investees towards the direction they so chose. As the great Tom Landry once said, “A coach is someone who tells you what you don’t want to hear, who has you see what you don’t want to see, so you can be who you have always known you could be.” But the prerequisite for the second cut is the first. The first requires intentional and special people.

Along a similar vein, my buddy Henry wrote a post recently I really liked.

“Is this founder special?” That’s probably the only question that has to be asked in every non-obvious investment decision. Maybe every investment decision. But especially true under imperfect information conditions. And special isn’t just about getting a high GPA.

Photo by Radek Skrzypczak on Unsplash

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