Baker Institute Team
“VCs play roulette and entrepreneurs play poker.”
Madeline Rosenthal '20 | Huntingdon Valley, PA Major | Accounting
Minor | Entrepreneurship
So far my Lehigh Silicon Valley experience has been better than I could have possibly expected. I’ve taken many entrepreneurship classes that have allowed me to speak with founders and investors, but it is truly an eye opening experience being in the thick of it in Silicon Valley. It is fascinating how intelligent and well spoken all of our guests have been, and a privilege that they are willing to let us “under their tents” so that we can learn as much as possible.
Tim Eades was an exceptional speaker. He was completely raw and truthful about his thoughts and experiences. He was able to captivate our cohort for an entire afternoon, provoking complex questions and making us think differently. My favorite quote from that session was “VCs play roulette and entrepreneurs play poker.” This was an extremely interesting comparison to consider and a new way of thinking about entrepreneurship.
I think that this quote can be interpreted in a few ways. There isn’t much strategy in roulette, it’s mostly luck. You pick a color and a number, and hope that you win. In poker there is more strategy and thinking that goes into making a “play.” This isn’t to say that VCs don’t think strategically or that an entrepreneurs thinking always makes them “win” but there is no guarantee that the money VCs invest in companies will make for a successful company.
The other way to interpret this is that in roulette you put stronger bets on some of the numbers that can bring back even larger returns. VCs invest in many companies and they get either no return, an expected return, or a way larger return than expected. It is obviously the hope that the more positive outcome will result, but it’s more than likely not that it will not occur. In poker you know that there will be a winner, and the reward is presented throughout the game, so the outcome is more predictable.
This quote is something that will stick with me throughout my career and my entrepreneurial ventures. I often find that comparisons are an effective way for me to learn, and Tim Eades was able to use this to teach me.