Episode summary
Can VCs Actually Pick Winners?
How I Invest With David Weisburd
· · Hosts: David Weisburd · Guests: Eric Bahn
Summary
Eric Bahn argues that at the pre-seed stage, venture is mostly about observing execution velocity rather than trying to infer destiny from pedigree. He says Hustle Fund’s core insight came from accelerator data: early stack-rankings of companies barely changed over time once the teams had shown how they worked in practice. For Bahn, “hustle” means throughput, learning speed, and grit, and the best way to measure it is by working with founders on real sprints after the first check.
He also defends Hustle Fund’s wide-net model as a deliberate blend of diversification and concentration. Because the firm often invests at very low ownership and in teams no one else has yet de-risked, Bahn says the fund is less ownership-sensitive than traditional VCs and relies on a few outliers to drive returns. He thinks pedigree signals are often already priced into a startup’s valuation, while hustle can reveal unpriced alpha through customer discovery, experimentation, and boring early work.
Bahn says Hustle Fund has turned its platform into a founder-services business, with newsletters, events, and an angel community that help drive distribution, mentorship, and deal flow. He also says venture timelines are stretching, seed-strapping is becoming more common, and secondaries may need to play a much bigger role as IPOs take longer than the old four-year vesting norm assumed.
Key takeaways
- Bahn says pre-seed investors are mostly guessing at entry, so Hustle Fund prioritizes observable execution over pedigree.
- He argues that hustle is best measured after investing, through eight-week sprint work that reveals throughput and learning speed.
- Bahn says pedigree is usually priced into a startup’s valuation, which is why Hustle Fund looks for unpriced hustle instead.
- He says the firm’s small-fund model works because only a few companies need to drive the portfolio, even with low ownership.
- Bahn says seed-strapping and slower IPOs make secondaries increasingly important for liquidity and may justify longer fund lives.
Notable quotes
“We think that hustle, which we define as great execution, meet these high velocity, is one of the best leading indicators of success”
“The longer that I'm in this game as a preede stage investor, the more I'm convinced that all of us are just surely guessing”
“There's also I think a little bit of the art behind this business because there isn't what we've learned any standard metric”
“for us, we're a lot less ownership sensitive than any other fund at a small size”
“the teams that do best are the ones that are just doing the gritty, nasty work in the beginning”
How the episode opens
You've been in hundreds of companies. What did you learn early that still shapes how you invest today?
Before we started Hustle Fund, one of my co-founders, Elizabeth, and I were working at an accelerator called 500 Global. And the unique property of being in an accelerator is that you get to have access to tons of data. Uh at the time, I think they had close to 2,000 companies that they invested in even at that point in 2017.
So, uh it's a classic accelerator program. They get a batch every quarter or so, 30 companies, uh, 50 companies sometimes. An interesting exercise that we informally did was we tried to stack rank the best companies from one to 30 or however many companies at the beginning of the batch, one month in, the very end, and then in some cases when we could do it one year later.
And the shocking thing was our stack ranking about one month in did not change indefinitely into the future after that. And the reason why that was the case was once you're about a month in with these companies, you've had a chance to witness how they work, how they operate, see what kinds of metrics that they're going after and how successful they are in executing against those sprints. And that was really the genesis of hustle funds.
We think that hustle, which we define as great execution, meet these high velocity, is one of the best leading indicators of success. And that it actually penetrates through all the noise of other kinds of factors that a lot of other early stage managers try to judge teams. you are very focused on the concept of hustle.
Obviously, it's in your name. How do you know so early on whether somebody's actually a hustler versus they're simulating hustling or they're trying to make it seem like they're a hustler?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- vc evaluation
- founder hustle
- execution velocity
- pre-seed investing
- venture fund timelines
Companies and tickers mentioned
- META
- Hustle Fund
- Meta
- 500 Global
- AlphaSense
Watch the episode
Watch “Can VCs Actually Pick Winners?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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How I Invest With David Weisburd, this episode and its artwork belong to David Weisburd. Octagon is not affiliated with the show; this page is an independent summary.
