Conviction in Venture

If you scoot on over to and search for the word “conviction” you get the following definition:

And what struck me is that conviction can be seen as a two sided beast. On the one hand, conviction is a firm belief that is unwavering. VC’s are constantly pursuing conviction about the market, team, technology, thesis, etc. And over the last year, I’ve been pushed by my firm to develop conviction when we are evaluating investment opportunities.

Developing conviction is hard. Having conviction is even harder.

I’m grateful that at Storm Ventures I’ve been given the time to focus on developing conviction, because it’s key to the success of any investor. But I’ve learned that developing conviction is hard. Having conviction is even harder. This is because “conviction” isn’t just a a firm belief, it’s also “The state of being convicted.” What I mean by that, is that once you have conviction, you’re defined by it and there’s no going back.

Let’s use my dating life as an example. When I was in high school, I remember how nerve racking it was to ask someone out on a first date. First it took conviction for me to have the desire to ask the girl out, but that was usually the easy part. The truly scary part was doing the asking, because that put me in a position where I couldn’t go back, if the girl said no, I’d be convicted by her rebuff and thrown into eternal embarrassment. This embarrassment would clearly then extend destroy my “street cred” at school as news broke about my failed attempt. (sound extreme? Give me a break…I was a 16 year old nerd).

As a VC, a similar dynamic unfolds. If I have the conviction and the desire to invest, I dig in. That part is easy. But when it’s time to present and announce to the firm — or even the world — that’s when the pressure begins. Because our investments define us in this industry.

But conviction isn’t just about making investment decisions. Conviction is bigger. The most successful VC’s have conviction when others don’t. They see opportunity in markets that others aren’t looking at — and this means they’re out there talking about opportunity and evangelizing about things that others are dismissing. That’s what being thesis driven means. That’s scary.

It’s human nature to find comfort in groups. That’s why consensus building is key to the success of a great partnership. It’s also why every firm tracks the companies they see, and if one of those companies raise capital from another firm, we make a mental note that says:

  1. Too bad we didn’t invest in that one. Let me see how they do, maybe the next round?
  2. At least I’m hunting and seeing the right companies. This is good signaling for my ability to find patterns.

The tracking is a way of looking for consensus in the market. BUT, the glaring reality is that the highest returning investments occur when consensus isn’t found, but the investment still happens. How does this happen? Conviction pushes the deal through, and that conviction invariably ties the individuals career with that decision — you’ve gone all in. Behind every big bet is conviction and fear.

Conviction at Storm

Here at Storm, it’s true that some of our highest returning investments didn’t have consensus internally, and this is true across the venture industry. Fundamentally, if you think about the venture model, it makes sense. It’s our job as VC’s to invest in the cutting edge and to invest in areas that have been overlooked when the time is right. And this means those early movers, those who develop strong conviction before the rest, see the largest returns.

When I look at Storm, I see Tae Hea having conviction around mobile being huge in the enterprise even before the iPhone, I see him having conviction around marketing automation and the transformational influence AI/ML will have. I look at Ryan and I see someone who understood how AWS was going to transform the tech world, how open-source was democratizing software development, and the impact diversity can have on technology. Lastly, I see Arun and his passion for digital health leading him to see opportunities others don’t because he has a truly unique and personal perspective.

You’ll notice I’ve left myself out.

That’s because I’m currently on my conviction development journey. That journey has been deeply personal, educational, exciting, and the adjectives could continue. For me, it’s been most recently centered around government technology (GovTech). While it’s an industry that has seen some venture activity, it’s as Ron Bouganim, Founder of GovTech Fund, would describe it as only the bottom of the first inning.

While on this journey, I’ve learned the importance of patience. Developing conviction isn’t about pulling the trigger on an investment quickly, it’s about taking the time to learn. It’s about checking your assumption and building a network of people far smarter than you. As an investor, I find that it’s about not just meeting founders, it’s also about meeting civil servants, foundations, other investors, and folks who’ve developed the scar tissue from being burned before.

So when I say conviction is scary, I speak from my personal experience. Building conviction isn’t for the feint of heart, but those daring to go through the journey will find that if it’s coupled with passion, then end result is simply put, thrilling.

Venture Capital
Storm Ventures