First Principles Are the Biggest Illusion of Early-Stage Venture Capital

Early-stage venture capital is not about seeking certainty,
but about choosing the people and the future whose ambiguity you are willing to bear.

🔍 Why Read This

If you're an investor who's ever passed on a founder that didn’t “check the boxes” — only to watch them build something great — this is for you.
If you're a founder who's ever felt reduced to a pitch, or sensed the logic in the room but not the trust — this is also for you.

This essay is about a quiet gap in early-stage decision-making:
When the logic makes sense — but the belief never forms.
When the structure holds — but the bet doesn’t happen.

It’s a reflection on what really drives early-stage conviction.
Why first-principles thinking, while rigorous, often becomes a trap.
And how belief — structured, earned, and accountable — becomes the judgment worth trusting in the fog.

💡 The Core Idea

First principles thinking is one of the most powerful tools in early-stage investing — and also its biggest illusion.

It gives us a feeling of clarity. A sense of control.
It breaks things down beautifully — until we believe the judgment is complete.

But here’s the trap:

Just because the logic holds doesn’t mean the willingness to make the bet.
First principles show what might work — but not what help you choose to believe in.

In early-stage venture — especially at Pre-Seed to Pre-A —
you’re not choosing based on certainty.
You’re choosing what ambiguity you’re willing to live with.
And who you’re willing to shoulder that ambiguity for.

True conviction doesn’t come from analysis alone.
It comes from belief — not blind faith, but a structured, earned, accountable form of judgment.
One that anchors your decisions when logic runs out, and uncertainty remains.

First principles construct plausibility.
Belief carries commitment.

📚 Table of Contents

First Principles: A Law I Once Believed in Unquestioningly
The Value and Limits of First Principles: It Can’t Answer “Why Must I Invest”
What Is Belief? A Judgment Anchor Amid Uncertainty
How Belief Is Formed: Not Epiphany, But Judgment Refined Through Experience and Commitment
Belief Is Not Blind Faith, Not Impulse, But a Responsibility of Judgment
What I Believe In: The Early Shape of My Investment Faith
Why First Principles Thinking Is the Biggest Illusion in Early-Stage Venture
Great Early-Stage Venture Is a Double Leap: One into the Future, One into Human Nature

I. First Principles: A Law I Once Believed in Unquestioningly

When I first entered early-stage venture, that Elon Musk interview about “first principles” had already become something of a gospel in the industry.

I even interviewed several investors from top-tier funds and asked them how they made investment decisions.
Their answers were almost identical:

“I’m a first-principles investor.”

The tone had the finality of an oracle—
as if, so long as you could break things down deep enough,
the answer would naturally reveal itself.

At the time, I didn’t fully understand what “first principles” actually meant.
I just knew that in this field, the phrase had become a sacred code.
To do early-stage investing “right,” you had to think from first principles.

So I began learning:
Deconstruct the problem. Start from basic truths. Ask about fundamentals. Write it all out in logic.

I started to believe that early-stage investing was a competition of who could analyze better.

I started analyzing the business :

Was the market based on a real, urgent need—or was it a false premise?
Was the approach too complex, too infrastructure-heavy, too slow to scale?
Was the business model structurally closed-loop?
Was the technology actually a differentiator—or just temporarily impressive?
Had the competitive dynamics already locked in, leaving little space for a new entrant?

I mapped out user demand, studied competitive tactics, stress-tested each go-to-market step:
Who was the must-have user?
What wedge, if any, made this entry path defensible?
Could the growth playbook sustain?
Was each step logically self-contained, or held together by wishful thinking?

Then I turned to the founder :

Were they being aggressive—or trying to alpha the investor ?

Too cautious—had they not thought it through ?

Too slick—were they performing a persona ?

Too sincere—were they simply under-packaged ?

I found myself acting like a detective.

I tried to read the founder’s real motives in one conversation. To infer their behavioral patterns from a resume. To guess their risk tolerance from a micro-expression.

If you're looking for reasons to say no, you’ll always find plenty—
and they’ll all sound reasonable.

I sat behind the table like an examiner,
scoring founders,
waiting for a perfect answer that would never come.

The more I analyzed,
the less I trusted.

I could always articulate why a deal wasn’t right.
I could draft a long list of why it might be worth considering.

But I couldn’t say:

“This is something I must invest in.”

II. The Value and Limits of First Principles: It Can’t Answer “Why Must I Invest”

In the beginning, I thought the problem was simple: I lacked information or experience—so I hesitated to invest.

But over time, I realized:
The issue wasn’t missing data.
It wasn’t flawed logic.

Even when I could break a deal down into a logically self-consistent case,
I still couldn’t reach the conclusion: “I must invest in this.”

That bothered me.

I had reviewed every aspect of a project—
market, technology, business model, team, valuation, exit.
It all looked solid.
The structure held up.
The approach made sense.
The founder was competent.

But halfway through writing the memo, I stopped:

“Would I feel any real loss if this never came to the world?”

I couldn’t answer.

To be honest—
I didn’t want it badly enough.

It wasn’t that anything was wrong—

it just didn’t spark that instinct to lean in.

So I began to ask:
Where was the real gap?

Maybe we needed to revisit what “first principles” actually meant.

The idea comes from Aristotle,
but it was Elon Musk who made it popular in the tech and business world.
His point was clear:
Don’t reason by analogy.
Strip things to their fundamental truths, and build upward from there.

This thinking relies on two moves:

Deconstructing complex problems into irreducible components.
Reconstructing from those components into new, reality-aligned structures.

In engineering and hard tech, this approach is powerful.

It’s how Musk reimagined the cost structure of electric batteries,
the materials of rockets,
and how he seeded entire systems of innovation from basic truth.

In early-stage venture, it matters too.

I once reviewed a well-regarded AI tools company.
Great product UX, healthy early revenue, strong team, fast fundraising momentum.

But when we broke it down,
the core capability relied heavily on the pace of open-source model iteration.

As foundation models kept improving,
its core functions risked becoming free, generic, indistinguishable.

In other words, its so-called “tech moat”
wasn’t built on internal accumulation,
but on temporarily packaging external advances.

These kinds of companies often look great during early growth phases.
But the real risk lies in the inability to compound their advantage .

Once external variables shift,
value starts to leak—often fast.

Sure enough, six months later,
the startup’s core feature set was gradually absorbed by the ecosystem.
Growth plateaued.
The team pivoted.

This pattern isn’t rare.

The value of first principles is that it breaks through narrative bias,
surfaces structural fragility,
and prevents reactive bets in hype-driven markets.

It’s a tool of counter-narrative thinking.
A guardrail for rational judgment.
A structural review mechanism when facing uncertainty.

It helps you determine whether the logic makes sense .
But it can’t answer something more fundamental:

Am I willing to bet?

Many deals make sense on paper—they’re rational, structured, plausible.

First principles can show that something might work.
But they can’t make you want to commit.

I gradually realized:
A lot of my so-called “rational analysis” was actually a way to cover up my hesitation,
to avoid confronting my lack of conviction.

That disconnect forced a deeper question:

Is what we call “first principles” really objective?

In theory, first principles thinking is about facts that rely on no assumptions.

But in early-stage venture , what we treat as “first principles”
are often subjectively chosen anchors .

If your lens is tech leverage, you’ll say “efficiency is first principle.”
If you default to demand-side logic, you’ll say “need is first principle.”
If you center on the founder, you’ll say “motivation is first principle.”

We think we’re starting from scratch.
But the very choice of where to begin already reflects our beliefs.

What we call ‘first principles’ often isn’t a starting point of logic—
but a reflection of our worldview.

What drives conviction isn’t the elegance of your logic.
It’s the lens you choose to look through.

First principles construct plausibility.
But investing requires deciding what’s worth believing in.

Not “Can this succeed?” But: If it does, so what?

Is it worth your time, your reputation, your resources—
to stand on its side?

Is it worth staying patient while it grows through chaos?
Is it worth sharing in the burden of challenges that haven’t even appeared yet?

These aren’t logical questions.
They belong to the realm of belief.

III. What is Belief? A Judgment Anchor Amid Uncertainty

Many investment firms often talk about “belief.”

In post-investment reviews or portfolio celebration posts, you’ll hear phrases like “We’ve always believed in XX,” or “We’ve been consistently bullish on XX.” This kind of expression shows up frequently across the market and social media.

At first, I thought it was just industry jargon — more of a directional or strategic declaration than anything else.

But when facing early-stage investments, there are moments of decision that lack any clear logical closure. Information is incomplete, data is insufficient, and many variables haven’t yet emerged.

It is precisely in those “not yet justifiable” moments that belief begins to take hold.

By “belief,” I don’t mean a slogan, a value statement, or a retrospective narrative post-investment.

I mean that anchor of judgment that quietly surfaces before the bet is made — when the information is fuzzy, the data inconclusive, and even your own explanation feels unfinished.

It’s not “I’ve figured it out,” but “I want to stand on its side.”

Not “everyone else is investing,” but “I’d regret it if this gets missed.”

This kind of judgment isn’t impulse — it’s a structure you can actually deconstruct.
Underneath it often lies a set of clear, though unspoken, inclinations.

It usually emerges from the intersection of three dimensions:

You believe this person can make it to the end (People)

Not whether they’re strong now , but their long-term resilience, clarity, and anti-fragility.

Not how polished their pitch is, but what kind of choices they make in critical moments — whether they convey stability amid chaos.

You’re not betting that they already have the answers,
but that they have the capacity to find them — and to keep going until they do.

You believe this thing deserves to exist (Problem)

This is more a sense of intrinsic worth — you feel it should be built.

Not because the ROI looks high or the market is trendy,
but because:

If this thing truly exists, the world might be a little better.

It may not be the “sexiest” business story — but you want it to exist, and you’re willing to support its creation.

You believe the world is moving in that direction (World)

It’s not trend prediction — it’s directional intuition backed by conviction.

You’re picking up on early, underappreciated signals.
You can feel the industry inertia starting to shift —
technology, awareness, demand, and supply chains are quietly aligning.

It hasn’t happened yet, but you sense it’s becoming more likely.

The “person” gives you a sense of ongoing possibility.
The “problem” gives you a sense of worth.
The “world” gives you a sense of directional tension.

If these three don’t align, no amount of logic will get you to a conviction-level bet.

But when they overlap, a quiet sense of clarity emerges:

“I may not have figured out all the variables — but I believe this direction is worth my time and trust.”

This is what I mean by belief —

Not a prediction of outcomes, but:

A willingness to own the bet and take the ownership of the result — even when objective clarity isn’t yet available.

IV. How Belief Is Formed: Not Epiphany, But Judgment Refined Through Experience and Commitment

At first, I thought belief was a kind of epiphany — a moment of sudden clarity.

But the more decisions I made amid uncertainty, the more I realized:
Belief is actually a form of judgment — one that is refined through persistence, through bets placed, through failures endured and returned from.

It is not deduced by analysis.
It grows only after you’ve made the bet.

Some judgments are made when data is incomplete, logic isn’t airtight, and the mainstream might even find them hard to justify.

And yet, you find yourself going back for another look —
probing a variable others ignored, testing a path that syncs asynchronously.

Some founders aren’t charismatic, nor do they fit the “star” mold.

But from the way they grasp systems, or how they respond to failure,
you sense a kind of stability — enough to want to walk with them for a while.

You know these people and projects don’t fit the textbook definition of “great startups.”

But you start to realize:

If everyone uses the same consensus logic to evaluate the world,
then true outsized returns must lie in the places no one is yet willing to bet on.

What you gain then is not a deduced insight,
but a sense of judgment — one formed through repeated bets and validation.

It may resist abstract articulation,
but it often becomes the seedbed from which real belief emerges.

Thinking clearly is important —
but only placing the bet gives you feedback.

The prototype of belief often exists as a vague preference before the bet.
But without feedback, belief remains theoretical — it cannot close the loop.

True belief starts from fuzzy judgment,
and gradually takes shape through repeated bets and real-world feedback.
It is honed into directional instinct and decision-making intuition.

And this honing is not just about rational thinking or capital deployment —
it is deeply shaped by one’s structural biases:

What you’ve experienced shapes what possibilities you’re inclined to believe in;
The environment you’re in shapes whether you have the freedom to hold non-consensus views;
How you perceive the world and evaluate people shapes what you see, what you miss, and who you choose to believe in.

This is also why early-stage venture firms are often deeply influenced by the belief paths and betting styles of their founding partners.

Why has Sequoia survived across cycles, while some other firms faded after a single generation?
The difference isn’t just “picking well” —
but whether belief has translated into judgment,
and whether that judgment is respected, reused, and even passed on across generations.

Belief transmission is never a standardized process —
it’s more like a long-term co-evolution, shaped through mutual influence and collective friction.

Great investors don’t just make good calls.
They also shape how others think — they raise the collective quality of decision-making.

So belief is not a burst of irrational emotion.

It is a biased choice made when rationality can’t fully resolve uncertainty —
a judgment anchor formed through years of worldview refinement and experiential feedback.

V. Belief Is Not Blind Faith, Not Impulse, But a Responsibility of Judgment

In the context of investing, the word belief is often misunderstood.

Sometimes it sounds like blind faith. Sometimes like raw emotion. Sometimes even like an excuse for dodging responsibility. Most commonly, it’s treated as the opposite of “first principles” — as if belief and rationality are inherently at odds.

But this is exactly where our misunderstanding of belief begins.

I didn’t trust the word either, at first. It felt vague. Unreal.

On one hand, it sounded grand — a kind of narrative flourish — but impractical when it came to actual decision-making.
On the other, it seemed unprofessional — lacking data, lacking a framework for validation. As if investing based on instinct alone.

I kept asking myself:

If I get it wrong, am I just being reckless with LP’s capital?
If I use “belief” as my justification, does that mean I don’t need to validate anything?
If what I believe is just a feeling — how is that different from just “liking” something?

I also questioned if belief was a kind of illusion:

When I say I have conviction — am I just flattering my own judgment?
When I say “I see the future” — am I just telling a prettier story?
When I say I believe in a founder — is it clarity, or am I emotionally carried away?

Eventually, a deceptively simple question forced me to reconsider:

If you don’t dare say what you believe in — who exactly are you betting on behalf of?

Are you betting on behalf of the market? But the market changes its mind every day.
Are you betting on behalf of the model? But models only look backward, not forward.
Are you betting on behalf of the firm? But the firm is merely an extension of your own cognition.

The person responsible for the judgment — is you.

And if that’s the case, then you must admit:

Behind every investment lies a worldview assumption — and that assumption is your belief.

So we need to be clear:

Belief is not irrationality.
It is the responsibility of judgment — knowing what you're betting on amid uncertainty, and what consequences you're willing to accept.

It’s not about skipping validation — it’s about knowing what can be validated, and what cannot.
It’s not a rejection of reasoning — it’s the awareness that reasoning can’t cover every gray zone in decision-making.

Here are four common — and dangerous — misconceptions about belief:

Misunderstanding 1: Belief = No Need for Validation

This assumes belief is a shortcut — that saying “I believe” gives you a free pass from reasoning or scrutiny.

But real belief never rejects validation.
In fact, it leans into it.

You’re willing to run user interviews, probe technical feasibility, ask for second-opinions from post-investment operators —
not because you’re blindly optimistic,
but because you genuinely want to know whether this path can work.

You’re not trying to prove yourself right — you’re trying to support the bet with clarity.

Belief doesn’t fear validation.
It doesn’t end validation — it initiates it.

Misunderstanding 2: Belief = Emotional Impulse

Some people mistake being “moved” or “having a feeling” for investment conviction.
That’s not belief — that’s impulse.

Belief isn’t a passing emotion — it’s a long-term orientation.

It’s the stable inclination to keep walking a certain direction
even after you’ve seen failures, endured setbacks, and had your assumptions challenged.

You might be intrigued by a pitch —
but would you still back this founder when the data is murky, the roadmap unclear, and the mainstream skeptical?

That’s when real belief shows up.

Misunderstanding 3: Belief = FOMO

Another common confusion is mistaking belief for FOMO — the fear of missing out.

“Everyone else is in.”
“We can’t afford to miss this wave.”
“We don’t want to look dumb later.”

But these are not convictions.
They are reactions to external pressure.

Belief is internally anchored.
FOMO is externally triggered.

Belief is a choice you can explain and defend.
FOMO is an anxiety you try to rationalize after the fact.

FOMO is imitation.
Belief is commitment.

FOMO avoids regret.
Belief assumes responsibility.

FOMO chases consensus.

Belief stands alone.

Misunderstanding 4: Belief = Reckless Betting That Violates Fiduciary Duty

This is the most common fear among professional investors:

“We can’t invest based on belief — we have fiduciary duty to our LPs.”

But early-stage venture is, by nature, a game of bets.
Information will always be incomplete.
Judgments always live in ambiguity.

Rather than pretend belief doesn’t exist,
it’s more honest — and more responsible — to clarify:
what do you believe in, and what are you betting on the basis of?

Real fiduciary duty is not “guaranteeing no failure.”
It’s being clear about what you're betting on — and being accountable for that bet.

You can’t just rely on Excel.
You can’t just rely on market consensus.
You need to have clarity on the structure behind your conviction.

Avoiding risk in the name of safety sounds cautious — but it’s actually more dangerous.

As Warren Buffett once said:

“Risk comes from not knowing what you're doing.”

Venture without belief is speculation.
Only belief-backed betting is responsible investing.

This also brings us back to the relationship between belief and first principles.

Many treat them as opposites — one is emotion, the other reason.

But I’ve come to see it differently:

They are not adversaries.
They’re two parts of the same judgment path.

First principles strip away noise, challenge assumptions, and dismantle packaging.
They are tools to help us reach the base of our thinking.

But when reasoning can no longer deliver more information — when the data and models run dry —
you’re left with another question:

Are you willing to bet on this path?

First principles provide the logic.

Belief provides the inner structure that sustains your bet — when logic alone can’t span the uncertainty.

And they’re not mutually exclusive:

The more you use first principles,
the more you start to recognize recurring structural patterns.

You begin to sense:

Which types of founders tend to be trustworthy;
Which paths often look improbable but end up working;
Which under-appreciated angles often prove insightful.

These structural intuitions ,
reinforced by reasoning and validated through repeated bets —
become part of your belief system.

Belief is not a replacement for first principles —
it is the distillation of first principles through lived experience.

VI. What I Believe In: The Early Shape of My Investment Faith

If belief is the judgment anchor we hold amid uncertainty,
then every specific bet we make is an expression of that anchor.

There was a project I accompanied for over six months —
we discussed technical paths, dissected the ecosystem, and revisited every piece of logic again and again.

The first time it went to the investment committee, it was rejected.
The product wasn’t live yet. The roadmap was unclear.

But we kept following up — and worked together to shape what the demo could look like.

Eventually, the founder self-funded the first version.
The result far exceeded expectations.
At the second IC, the project passed smoothly.

Through that process, I realized:
Even if I couldn’t articulate all the decision criteria, I was already forming some investment preferences —
around what kind of people I trust,
what kind of problems I think are worth solving,
and what kind of world I want to participate in.

People: Who Do I Believe Will Go the Distance?

The quality I care about most is:
Can this person evolve fast in the real world?

When we first spoke to the founder, his thinking was scattered. His articulation was rough.

But in the following conversations, he turned each discussion into a next-level structural upgrade.
He kept refining how he understood the tech stack, the industry rhythm, the resource dynamics.

This wasn’t just intelligence —
it was the ability to expose uncertainty, seek feedback, and keep correcting course .

He didn’t start out ahead — but he improved quickly.
That became a key signal for me: Is this someone I’d be willing to run with?

The second trait was a sense of commitment .

After being rejected in the first IC, the founder didn’t wait around.
He spent his own money, borrowed equipment, pulled in people — just to make the demo real.

We didn’t ask him to do that. He wanted to prove the thing was worth doing —
and worth another look from us.

It wasn’t performative effort.
He was pushing things forward, unprompted.

Whether words are followed by actions.
Whether milestones are actually delivered.
Whether failure is followed by a closed-loop reflection.

These matter more than how polished the pitch is.

The third trait: Will they stay long enough?

They had been quietly working on this project for years.
Only one small pre-seed round. No fanfare.
Just quietly maintaining a direction the market hadn’t yet noticed.

Until we stepped in to discuss hardware, product design, and go-to-market strategy —
the possibility began to open up.

But the founder had never walked away.
Never stopped trying to make it into a real business.

The fourth: Are they grounded enough?

After we connected on Discord, we saw that the founder personally replied to every single user message —
even tiny bugs or feature suggestions — and updated the daily changelog accordingly.

Often, what we discussed one day, he’d have a prototype the next.

He didn’t do it to “show responsiveness.”
He genuinely cared about frontline feedback.

He knew how to listen, how to fix, and where to begin.

This wasn’t just execution.
It was a way of operating .

He wasn’t pitching like a “startup founder.”
He was building like a “real doer.”

Speed of learning, ability to follow through, long-term commitment, and grounded execution —
these are what I now look for when deciding if someone is worth betting on.

Problem: What Do I Believe Is Worth Building?

We kept asking one question throughout this project:

Is this really worth doing?

Not from the lens of “can it make money quickly?”
But from the deeper question of:

Does this deserve to exist in our time?

It wasn’t a clear market pain point.
It didn’t have an easy ROI pitch.
It was a direction the tech giants had abandoned.

User feedback was ambiguous.
The roadmap was immature.

But when the first batch of users tried the prototype, their eyes changed.

Not “I’m ready to pay.”
But — “I never thought this was possible.”

That’s when I realized I had a subconscious investment bias:

I’m drawn to products that shift how people perceive the world.

They may not solve urgent problems —
but they touch the edge of human perception.

And they tend to emerge from directions that were previously dismissed —
not because they were useless,
but because the tech, cost structure, or ecosystem wasn’t ready .

Now, those constraints are changing.
Old “impossibles” are becoming newly viable.

World: How Do I Believe the World Evolves?

I don’t pretend to be good at predicting the world.
But I’ve grown increasingly certain of this:

The world doesn’t evolve linearly.
It jumps.

Some opportunities don’t become clearer over time.
They become suddenly real —
once a technical inflection point is crossed.

What used to seem unworkable
was often just too early —
tech wasn’t ready,
supply chains weren’t cheap enough,
user behavior hadn’t caught up.

Now, the underlying variables are shifting.
Some of the previously locked doors are cracking open.

So I’ve learned to look for structures that are starting to loosen —
even if they’re still blurry.

Not because I know they will work.

But because I believe:

They are more likely to work now than they were before.

If I Had to Sum It Up in a Single Sentence:

People: those who self-correct through feedback and follow through on commitments.
Problems: those being re-enabled by the times and worth trying again.
World: structures that are loosening, offering a shot at nonlinear change.

We haven’t seen cycles yet.
We haven’t sat at the head table.
We haven’t lived through the rise and fall of an era.

But belief isn’t the conclusion you reach after you’ve seen it all.
It’s the anchor you hold while walking through the unknown .

And I’ve grown more and more certain:

Early-stage venture capital must be grounded in belief.

VII. Why First Principles Thinking Is the Biggest Illusion in Early-Stage Venture

This is a conclusion that only makes sense within the specific context of early-stage venture investing — particularly Pre-Seed to Pre-A .

At this stage, information is scarce, the path hasn’t formed, and most projects are still in conceptual, prototyping, or early exploration phases.

Truly great early-stage investments tend to fall into two broad categories:

One is value investing : identifying structurally sound, undervalued opportunities with clear logical closure;
The other is value creation investing : betting on something even before the structure exists — committing time and trust to help it materialize.

These represent two fundamentally different judgment paths:
recognizing existing structures vs. participating in building new ones.

There’s no hierarchy between them — one leans more on seeing , the other more on believing ; one emphasizes more on validation , the other more on co-creation .

And in reality, these paths often overlap and evolve:

A structure you "recognize" may only come to life because early believers helped it land and scale.
A structure you "build" may, through exploration, gradually reveal a clear logic and coherent narrative.

But at the Pre-Seed to Pre-A stage, what we most often face is the second kind:

Structures not yet formed, variables still unclear, and futures still in the making.

In both modes, first principles thinking plays a crucial role.

Whether you’re deconstructing hype, validating technical feasibility, or abstracting fundamental layers —
it brings a form of much-needed clarity.

It’s a rare skill, and an essential tool for early-stage investor.

But because it is so rigorous, so logically complete, so seemingly bulletproof —
it’s also the easiest to confuse with a finished judgment .

Especially in value-creation investments,
the limits of first principles thinking become more pronounced.

You may have broken down the path, listed the risks,
but the final question — “Am I willing to place this bet?” — doesn’t always emerge from reason alone.

And that’s not the fault of first principles.
It’s a misapplication — the mistaken assumption that reasoning can replace commitment.

Early-stage investing isn’t about solving a puzzle.
It’s about choosing a side.

One project I passed on taught me this viscerally. I’ve revisited it many times.

The founder was about my age.
He was working on a technically ambitious, high-complexity product.

I broke down the model. The tech seemed possible. The direction had potential.
It was high risk — requiring precision, timing, and aggressive resource orchestration.

But from a first-principles standpoint,
it wasn’t logically invalid.

Still, I didn’t push the deal forward.
Not because I had a reason against it —
but because my internal system hadn’t yet formed enough belief to support the bet.

I instinctively leaned toward founders who had been through full cycles —
who had scars, cadence, and tested resilience.

Here, I was looking at someone early, raw, still climbing.

I’d also seen technically plausible projects fail.
That history built in a kind of cautious reflex —
a default conservatism when the structure looked “possible but not probable.”

These weren’t analytical errors.
They were the result of having no belief anchor —
and thus defaulting back to safer, more familiar decisions.

That project later took off.
The product moved forward. The team raised well.

It made me realize:

First principles can help you see that something isn’t wrong .
But without belief, you may never get to: “I must to invest.”

So why do I say first principles thinking is the biggest illusion in early-stage venture ?

Not because it’s the most error-prone.
Not because it leads to the biggest losses.
But because:

It looks the most like truth.
It looks the most like rationality.
It looks the most like a finished judgment.

It carries you to the logical endpoint —
and thus convinces you that your thinking has gone deep enough.

It forms a beautiful closed-loop structure —
and so you assume it has covered all key variables.

It validates logical consistency —
and so you assume you’ve made a judgment, unaware that your worldview has already chosen for you.

It shows control over risk —
and so you mistake “not investing” or “investing carefully” as inherently responsible.

It feels precise and professional —
and so you forget to ask the one question that matters most:
“Am I willing to bear the consequence of this bet?”

First principles create the illusion of a completed decision —
when in fact, your stance and ownership haven’t yet emerged.

It doesn’t lie to you.
But in the absence of experience or belief, it makes it easy to lie to yourself.

It’s not the most dangerous mistake.

But it is the biggest, and the hardest to notice.

VIII. Great Early-Stage Venture Is a Double Leap: One into the Future, One into Human Nature

One Leap Outward: Into the Future Not Yet Real

This isn’t about predicting what the future will look like —
it’s about choosing which future you want to help make real.

Many assume that investors are in the business of forecasting trends and finding certainty.

But early-stage venture is about the opposite:
placing bets in uncertainty, choosing a stance amid the fog.

It’s not waiting for clarity —
it’s deciding whether you want to help define a version of the future:
Which path are you willing to bet on?
Who are you willing to walk that path with?

We’re not predicting the future —

We’re participating in its creation, one bet at a time.

At that point, judgment becomes deeply personal.

It reminds me of something Alan Kay once said:

“The best way to predict the future is to invent it.”

What kind of world do you hope to see —
and are you willing to commit your trust, time, and resources to accelerate its arrival?

Sometimes it’s too early.
Sometimes it contradicts conventional wisdom.

But you’ve seen signals.
You’ve felt the moment where you think,

“If this works, the world will look different.”

It may not be the next hot trend—
but it’s something you want to help build.

This isn’t objective logic. It’s preference made explicit.

It’s not “This is the best path.”
It’s “Even if it’s not the best, I want to help it become real.”

One Leap Inward: Into Human Nature Not Yet Seen

This isn’t about believing someone is destined to succeed.

It’s about being willing to walk alongside them before the world sees them.

I used to think that evaluating founders was about analysis.
Now I realize:

Founders aren’t multiple-choice questions.
You can’t check boxes to decide who to back.

To judge someone based on a single pitch or moment of imbalance —
is to assess a dynamic system through a static snapshot.

True founder judgment requires placing yourself in the process —
observing over time if this is someone you can walk with as you both change.

I also noticed something else:

Trust doesn’t always start with logic.
It often starts with familiarity.

I’m more likely to trust people who resemble me —
in personality, in cadence, in the way they communicate or operate.

But that also means I have to remind myself constantly:

The most extraordinary founders often don’t look like you.
They challenge you. They destabilize your worldview.
They pull you into places you never thought you’d go.

Belief isn’t about “finding another me.”
It’s about “being willing to accompany someone who’s not like me.”

That’s when I began to accept:

Early-stage venture isn’t about precisely predicting who will make it.
It’s about tolerating 80% failure to protect the 20% shot at greatness.

Greatness isn’t proven —
it’s tolerated, supported, and believed into being.

Just like writers draft a hundred bad versions,
and painters sketch hundreds of rough forms —
Early-stage VCs must endure misjudgments in order to grow their belief system.

This isn’t an excuse for failure.
And it’s not about recklessly gambling LP money.

Quite the opposite:

The core of venture capital is the power-law.
We don’t rely on every project to succeed.
We rely on a few outliers to generate nonlinear outcomes.

That’s not a personal preference —
it’s a structural law proven again and again.

So “risk” in venture isn’t just about the cost of failure —

It’s the precondition for independent judgment and belief to matter.

LPs entrust GPs not to avoid failure,
but to systematically chase the chance of a home run.

Power-law logic is not an excuse —
it’s a demand for greater post-mortem rigor and accountability in judgment.

That’s why I believe:

Great investors aren’t necessarily more accurate.
They’re more honest about the fact that belief often fails — and fails frequently.

What fails is not the sincerity of the decision —
but the limited perspective we brought into a complex reality.

Yes, it matters how often we’re right.
Yes, it matters why we were right.

Those moments strengthen the belief system,
confirm which convictions are worth keeping, amplifying, and reusing.

But a belief system that evolves must not only grow from correct calls —

It must also learn how to update itself after the wrong ones.

That’s the real purpose of belief:
Not to blindly persist,
but to refine judgment through both right and wrong.

It may seem like we’re judging companies.
But really, we’re judging people.
And through people, we’re projecting a worldview.

The real bet is never just on a founder or a company.
It’s a bet on the kind of world you’re willing to help build.

Early-stage venture is not about finding certainty —
It’s about choosing which people and which future you’re willing to shoulder the ambiguity for.