Herodotus, Investor

It’s been a bit slow on the blogging front, but after a bit of a hiatus, I’m back. 

As you know, I’d been wandering around Silicon Valley for the past few months, meeting with people and learning about what they spend their days doing and whether I might want to do the voodoo they do.  But, of course, TS Eliot had it right when he said, “we shall not cease from exploration and the end of all our exploring will be to arrive where we started and know the place for the first time.”  And, indeed, in a sense, I’ve come full circle as I’ve joined Venture Investment Associates where I’ll be able to pursue my passion for investing in buyout, growth equity, and venture capital funds with folks who have been friends and mentors during the decade I've known them.

Of course, those of you who know VIA might cry out, “but you share a common Greek heritage with two of your partners and whenever the three of you meet, the European Central Bank will have to call an emergency meeting, as the prospect of three people of Greek lineage talking about investing will certainly unsettle financial markets!”  And, yes, I should probably apologize for the havoc that my people have wreaked.  But I actually prefer to brandish my heritage in another way. 

After all, our countryman, Herodotus, is viewed as “the father of history.”  Now, maybe it’s because I’m trying to justify my dusty history degree by saying that the subject is a great metaphor for investing, with it's emphasis on continuity and change.  After all, both history and private equity are concerned with catalysts and their effect on the status quo; at the same time, the whole process of forming investment hypotheses and testing them sounds like a Hegelian dialectic. 

And it was Herodotus who really taught us how to do history.  After all, the word history comes from the greek word historía (ἱστορία), which means “inquiry.”  And what’s really interesting is that ἱστορία in its original connotation suggested inquiry that arises from wandering around and listening while conversing with people.  Herodotus traversed the world and absorbed the stories of the locals in search of understanding.

His lessons echo in the craft of the private equity investor 2500 years later, as we travel the world, visit portfolio companies, do reference calls, and attempt to divine the motivations of our General Partners.  In moving to Silicon Valley almost four years ago, I sought to live among the people the way Herodotus did as he wandered the ancient world.  

But why is such inquiry important?  Inertia makes it easy for some to continue in tried-and-true ways, but good investors constantly cast a skeptical eye, making each new commitment as a "fresh money buy".  Indeed, Herodotus himself reminds us: "For many that were once great have become small, and those that were great in my time were small formerly. Knowing, therefore, that human prosperity never remains the same, I will investigate both alike."  

Of course, Herodotus's investigations took place during a time of great progress and burgeoning affluence for the ancient Greeks.  As the Persian Wars about which he wrote receded into memory, the Hellenes experienced a flowering of knowledge and an explosion of wealth.  And while it may seem rash to compare our era to one of the most fecund in human history, today we are enjoying similarly profound advances in the frontiers of human understanding.  Technology-enabled advances are spreading quickly across an ever-more tightly connected world portending fresh prosperity.  

And I think that's why it's a particularly exciting time to be an investor: skilled practitioners should be able to catalyze value in companies that leverage such advances.  I believe that we'll look back on this period as a golden era of investment opportunity and that's why I'm so excited about spending the rest of my career with seasoned, savvy partners whose commitment to inquiry, to ἱστορία, matches my own.