The venture landscape is shifting under our feet. The old way of doing things is dying. Based on what I'm seeing in the market, a deep understanding of portfolio construction is about to become the single most critical differentiator for successful investors in 2025. Here's why and how to get ahead of the curve.
What I've Learned From 92 Companies
A few patterns in portfolio construction come up again and again.
The founders who handle portfolio construction well understand that timing is everything in this game.
The Reality Nobody Talks About
A lot of the advice on portfolio construction rests on assumptions that made sense five years ago. The world has moved on.
The first thing to understand is that your team matters more than your technology. I've seen this play out across dozens of companies. The pattern is unmistakable.
Many teams spend months on the wrong path before realizing that customer feedback is the only metric that matters. Once they make the switch, everything changes.
Why Most Approaches Fail
Many common approaches to portfolio construction are flawed at the root.
The root cause is usually one of three things:
Copying what big companies do without understanding why they do it. What works for Google doesn't work for a 10-person startup.
Over-engineering the solution when a simple approach would work better. I've seen teams spend six months building something that could have been done in two weeks.
Ignoring the human element. Technology is the easy part. Getting people to actually use it is where the real challenge lives.
The AI Angle
Any discussion of portfolio construction in 2026 has to include AI. As someone who's invested in Anthropic, OpenAI, Scale AI, and Hugging Face, I have a front-row seat to how AI is transforming this space.
The short version: AI makes good practitioners better and bad practitioners worse. It's an amplifier, not a replacement.
Some teams use AI to get far more out of portfolio construction. Others spend heavily on AI that solves the wrong problem. The difference comes down to understanding what you're actually trying to achieve.
This connects to broader themes around portfolio construction, follow-on investing, term sheets that I've been thinking about a lot lately.
The Bottom Line
None of this is rocket science. But it does require intentionality, consistency, and a willingness to learn from mistakes.
If you take one thing from this article, let it be this: start now, start small, and iterate. The founders who win at portfolio construction aren't the ones with the best strategy on paper. They're the ones who execute, learn, and adapt faster than everyone else.
Companies that take portfolio construction seriously tend to pull ahead of the ones that don't.
If you're working on something interesting in this space, I'd love to hear about it. Drop me a line.
Frequently Asked Questions
Q:How has this view evolved over time?
My thinking on most topics has changed significantly over the years. Early in my career, I held many conventional views that experience proved wrong. I try to update my beliefs when the evidence changes.
Q:Do all experts agree with this view?
No, and that's fine. The best ideas in business are often contrarian. I share my perspective based on my experience and data, but I encourage you to seek out opposing viewpoints and form your own conclusions.
Q:What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.