What A $2.2 Billion Exit Taught Me About Investing

I sat down with Jason Kirby, a four-time exited entrepreneur who hosts the excellent $100M Exits podcast. Jason is a thoughtful interviewer and, as a former entrepreneur who now helps Founders raise funds, a shrewd operator. For the first time, I expand on an investment I made over 15 years ago, which resulted in a $2.2 billion exit (and, at the time of writing, a $4.4 billion market capitalization). Lessons learned abound, but the key takeaways relate to the mindset behind those types of ventures.

We talked about how mindset permeates every corner of VC-backed entrepreneurship, on both sides of the table. From raising capital — whether for a startup or a fund — to allocating it in moments of pressure — bridge rounds, follow-ons, investment committees — we explored how underlying psychological dynamics influence conviction and judgment in the decisions that matter most.

I encourage you to watch the video below for practical examples and a more nuanced take on many topics discussed in Venture Capital today.

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In This Article

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#1. Don’t Underestimate Time Horizons

“When you build a big company, it takes much longer than you think.”

The Founder I invested in thought he would be out in five years, and it took twenty, with later rounds that ended up larger than the initial projected investment.

Related: VC Funds DPI: How Long Until Venture Capital Delivers Outlier Returns?

#2. Bridge Financing Is The Hardest Decision in Venture Capital

“The good way of doing it is look at the new money as a new investment.”

The decision only becomes clear when you eliminate common biases such as the sunk-cost fallacy, loss aversion, and escalation of commitment, which distort judgment.

Related: Bridge Financing: When Venture Capitalists Throw Good Money After Bad

#3. Process Can Help Mitigate Biases

“You want a fresh pair of eyes.”

On that investment, part of the deal team changed, part of the board changed, and the Investment Committee included people who were not already invested, so the decision setup itself reduced the emotional baggage.

Related: “You can be thinking your shit smells like ice cream.” – Marc Andreessen

#4. My Decision Model Blends VC and Behavioral Psychology

“Delay your intuition, collect more data, and when you make the decision, try to understand if you are trying to win or to not lose.”

That regulatory focus lens shows up everywhere: promotion focus pushes toward upside and “what can go right,” prevention focus pulls attention toward how the investment fails.

Related: A Manifesto For Mindset-Based Investing

#5. The Best VCs Understand Mindset

“Great VCs are aware of Founder psychology, and they’re also aware of their own psychology.”

That’s why they pay attention to subtle team dynamics, but they also stay humble about first impressions. Brad Feld’s Fitbit story is the textbook example: he passed after a first call because he misread James Park’s affect, then changed his mind later when he had more context and was in a different state.

Related: “Google’s funding round had red flags.” – Bill Gurley

#6. Fundraising Founders Should Pay Attention to VC Mindset

“Founders should listen more than they speak in VC meetings.”

Founders who talk nonstop kill the dynamic. A better approach is to start by learning what the Investor cares about and then answer questions based on whether the Investor is hunting upside or trying to avoid downside.

Related: 5 VC Fund Mechanics That Decide Which Startups Get Backed

#7. Investment Committees Need a Champion Rule to Catch Outliers

“The best IC rule for early-stage VC is the champion rule.”

Without it, the “12 Angry Men” dynamics and the search for unanimity push firms toward safe consensus and away from disruptive ideas that create natural skepticism.

Related: Venture Capital Investment Committees: Best Practices From Elite VC Firms

#8. Top LPs Pick Emerging GPs like Elite VCs Pick Founders

“99% of the allocation process is the same as VC’s allocating to Founders.”

Emerging Managers who are on the ground with startups and term sheets stand out, and many LPs get suspicious when managers mainly talk to LPs instead of doing the actual job of investing.

Related: Emerging VCs: Selection Through Mindset (Report)

Full Video Transcript

If you don’t have your earphones or prefer reading, here’s the interview transcript (it’s AI-generated, so mistakes may be present).

00:00 Introduction

Jason: Aram Attar is with us. Kind of former French version of Shark Tank guest—or I should say, coach—for five seasons, plus a VC and Founder himself. He’s the Founder of The VC Factory. He’s done over 50 deals, ranging from $1 million to $1.6 billion, and has advised over 50 VCs to help them build their own funds. He also helps LPs decide which emerging fund managers to back. Aram, welcome to the show.

Aram: Thank you so much, Jason.

Jason: You have a very impressive track record, but I want to start with one deal in particular. You had an opportunity to invest back in 2008, when markets were not great. Tell us how that company took 20 years to become a $2.2 billion New York Stock Exchange exit.

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00:39 A 20-year journey to a $2.2B exit

Aram: By the time I got involved in 2008, the company had been founded for four years. In 2004, this gentleman came to Mexico—he wasn’t Mexican—and thought, “I’m going to build this great company, copy what was done elsewhere, and in five years I’ll be out.”

That’s the first thing I want to say: when you build a big company, it takes much longer than you think. He thought he’d be there for five years. It took him 20 years.

I was there for the most critical years, where the first money was gone. The first two rounds were gone. And now we were in that territory where you ask: do we keep funding it, or do we fold?

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01:57 How VCs make decisions

Jason: That happens to a lot of VCs. I work with a lot of VCs who ask: “Are we throwing good money after bad?” How does a VC make that decision?

Aram: There are two ways to do it, and it really comes down to mindset.

The wrong way is treating the money already invested as something you can salvage. It’s a sunk cost. If you do that, you trigger loss aversion, escalation of commitment—basically a hotbed of cognitive biases.

The right way is to look at the new money as a new investment. If I didn’t have any money in already, would I be comfortable investing now at this point in this company?

Never think about the money you put in before. That’s why I call the bridge financing decision the most difficult decision in VC: you have to erase the memory of “we’re $20 million in,” and judge it as net‑new.

Jason: Do you evaluate it with the same criteria? Is it the same fund?

Aram: In this case, it was the same fund because I worked for a family office and it was an evergreen vehicle.

But to generalize: even if you have several funds, it’s good to have different people looking at it. In our case, part of the deal team changed, part of the board changed, and the investment committee was made of people who were not invested in that company. You want a fresh pair of eyes.

Marc Andreessen has a quote—if you don’t do that, you may think “your shit smells like ice cream.” That’s him, not me. But he’s right. That’s exactly what happens.

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03:50 Investing in a Mexican retail company

Jason: Walk us through the decision criteria. The company had already burned through a bunch of money. You had to decide if it was a fallacy or a real opportunity. What justified the net‑new investment?

Aram: In hindsight, what helped us was being very hands‑on. We had monthly reporting that we did ourselves. It was a hard discount store operation. They had hundreds of stores. The model is: you bleed cash until some stores make money and then you can start financing the operation.

Every year we went to Mexico for two weeks, audited all the stores, met everyone, and so on.

A lesson for VCs: don’t wait until the company runs out of cash to make the decision. If you do, it’s too late—you’re deciding under pressure and stress. The more you know as you go, the better.

Jason: How much was the investment at that time?

Aram: I’m not sure how public I can be because it’s a public company, so I can’t say a lot. But the third round I did—actually the third and the fourth—was substantial. The third round was more than all the money that had been put into the company up to that point. So it was in the dozens of millions.

We thought the third round would be the last, and then we had to do a fourth round a couple years later.

Jason: For context, this was essentially a discount retailer expanding across Mexico. Not traditional tech, but it took 20 years and got to a $2.2 billion public exit. Last I checked it was north of $3.5 billion.

Aram: It went up and down, but I still have a little bit of carry in that, so I look at it every now and then. Last time I checked it was over $3.5 billion.

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06:20 What mindset-based investing really means

Jason: Today you help VCs make hard decisions and have the right mindset for investment decisions. What does that actually mean?

Aram: Unfortunately, I wasn’t that good when I was an investor. I didn’t know those principles then.

This framework came from reflecting on my mistakes, and listening to maybe 20 of the best investors in the world on how they make decisions. I came up with a framework called “mindset‑based investing.”

It brings behavioral science—behavioral psychology—into VC. It’s three steps:

1. Delay your intuition (and don’t treat it like a god‑given ability).
2. Collect more data.
3. When you decide, understand whether you are trying to win or trying not to lose. What’s your motivation—minimizing loss or maximizing gain?

Jason: Those are two wildly different mindsets—preservation versus “bet the farm.” How do you unpack that? Is one right and one wrong?

Aram: It often relies on the behavior of Founders.

Great VCs ask: “What have you learned?” Then you get two types of answers.

One type of Founder focuses only on what went right. If something went wrong, it’s not their fault—it’s someone else’s.

The other type says: “I made these mistakes. This is what I learned. I tried everything until I found the path.” They don’t care about ego. They knock on every door and turn every rock until it works. That’s the better answer.

I don’t have a definitive answer yet—this research is ongoing. My instinct is: you want promotion‑focused Founders to chase gains. But the teams I’ve seen win often have both mindsets represented. Someone also needs to think about preservation and security, because it’s not always right to bet the house on every decision.

And the team has to trust each other. It can’t be someone constantly trying to prove they’re right.

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10:04 Behavioral insights every founder should know

Jason: Our audience is Founder‑heavy. Help them understand the psychology VCs observe that can blow up an opportunity. What are subtle cues VCs read as “not a good sign”?

Aram: Small clarification: I was a coach on that French Shark Tank program, not a judge.

Here are examples. One: a Founder repeats exactly what the other Founder just said, without adding anything—because they believe the other person didn’t say it right and they can say it better.

Great teams supplement each other. They add new information, push the idea forward, or they say nothing and let the conversation move on.

You shouldn’t over‑interpret every cue because people can be stressed. But the looks, the interruptions, the physicality—it can be telling.

I always say VCs are great at two things: reading teams and reading business models.

Jason: Are all VCs great at telling those cues? What separates a great VC from a not‑so‑great one?

Aram: Great VCs are aware of Founder psychology, and they’re aware of their own psychology. They know they have cognitive biases and they try to mitigate them.

Brad Feld talks about Fitbit. The first time he met the Founder, it was a call and he had something else on his mind. He didn’t like the Founder’s affect, thought he wasn’t enthusiastic, and he passed. Six months later, angels insisted he talk again. This time he was relaxed at home. He had learned more about Fitbit. Then he understood: that’s just how James Park speaks. It’s not lack of enthusiasm.

Great VCs are vulnerable about that.

Jason: So Founders should pitch VCs in a good mindset, and if they don’t, come back when it’s different?

Aram: Yes. You can’t fully control it, but you can read cues.

A big mistake Founders make is talking nonstop. That’s a nightmare. They should let the VC talk at the beginning. They should listen more than they speak. Many Founders are always pitching, and it kills the dynamic.

Jason: My advice is: spend the first 10 minutes listening. Learn what the VC cares about, what they look for, check if you’re even in the ballpark—then answer questions instead of pitching.

Aram: Exactly. That’s basic sales: listen.

And VCs have ego. They often like being asked questions. The great ones tend to have less ego.

Peter Fenton has a video where he says: if you have a big ego, after 10 years of success, new Founders don’t know you. You still have to hustle, make calls, explain who you are. If ego takes over, dealflow dies little by little.

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15:34 Research behind successful VC thinking

Jason: Walk us through your mindset research. Why do you do it? And tell us about one of the reports you’ve done.

Aram: The biggest mistake in VC is not an error of commission—investing in a deal that fails.

The biggest mistake is an error of omission. You see Airbnb, Uber, OpenAI before everyone else, and because of what happens in your head—cognitive biases—you pass.

That’s the famous anti‑portfolio idea (like Bessemer’s). The mistake isn’t technical. It isn’t that you didn’t understand the Founders. It’s in your head.

I realized it after listening to thousands of hours back when podcasts were rarer. Great VCs talk about psychology all the time. Some people in VC have repeated outlier performance over decades, not just a lucky hit once. There’s something consistent there. For me, that’s mindset.

Jason: What are some findings worth sharing?

Aram: The commonality among the “power law masters”—the VCs who repeatedly make those huge bets—seems to be traits and temperament. It’s not primarily about what they did before. It’s not simply being an operator. It’s not just being “commercially minded.”

It’s how they see the world. They tend to be optimistic. They have low loss aversion. They focus more on gain than loss.

Vinod Khosla says he doesn’t mind a 90% probability of failure if the 10% chance of success changes the world or creates a huge outcome. That’s the mindset: “What can go right?”

Alfred Lin at Sequoia is another example of that style of thinking.

What I’m researching is how these traits map to established psychology theory, and whether it can help identify who might become a great VC.

Jason: Founders always think they’re “the one.” How does a Founder communicate to a positive‑outlook VC to trigger that response?

Aram: If the VC is prevention‑focused, I don’t think a Founder can “trigger” that mindset. Most VCs will ask in the first meeting: “Who else is looking at the deal?” There’s herd mentality.

That person usually won’t lead. A lead investor makes decisions from first principles and doesn’t care what everyone else is doing. People now call it “pre‑consensus”—seeing it before it becomes consensus.

Jason: How does a Founder infer the type? What should they ask?

Aram: Listen to the VC’s questions. Are they trying to understand how big it can get, or are they trying to understand how they could lose money?

For promotion‑focused VCs, what matters is insight and vision. “Why me?” In Ben Horowitz’s words: “What do you know that nobody else knows?”

Ben Horowitz has a great example about Brian Chesky explaining Airbnb’s vision.

And if you listen to Travis Kalanick describe a business, he’s not saying, “We’ll build X kitchens within 100 km.” He’s saying: “In 100 years, food will be so cheap nobody will cook. Robots will make it. It will be delivered to your door.” You may not believe it, but if you do—and you’re promotion‑focused—you ask: “How big can this get? What do you need?”

Sequoia is a poster child for that “what can go right” line of questioning.

Jason: What about preservation‑focused VCs?

Aram: Be prepared to keep it short, politely. They can be great once the round has momentum, but they won’t lead early. They’ll ask about who else is in, unit economics, downside risks. Answer what you can, and then say: “Thank you. I’ll come back when there’s more momentum.”

Jason: Can a VC be both depending on the deal?

Aram: Over time, yes. Some VCs start very promotion‑focused, then later—when the numbers get big and they have a lot of carry—they become more risk‑focused. There are public cases of that.

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23:43 Missed deals and costly VC mistakes

Jason: Walk us through deals you’ve experienced where these principles show up.

Aram: In my case, I learned these principles partly by missing great deals.

I remember four deals in a row that I brought to committee about 10 years ago. Investment committees—if you’ve seen “12 Angry Men”—it’s exactly that dynamic.

Some people come in with an opinion on a 50‑page deck they haven’t read. Some people get swayed by the boss. Politics happens.

We passed on deals because I needed unanimity or majority. And for outlier deals, you can’t rely on unanimity, and often not even majority. You need what I call the “champion rule.”

We did say no to deals that would have lost money too, but those aren’t the ones that matter. The painful misses are the outliers you pass on.

In the BBB deal we discussed earlier, I wasn’t the lead partner. I joined the board. My lead partner talked a lot about the Founder’s psychology—he believed the Founder would never let it go. He’d say: “We could sell it to Walmart right now, but who cares about $100 million more if we can sell it for a billion in six years?” That’s a very different mental model.

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24:20 How investment committees really work

Jason: A lot of Founders say: “I had a great meeting. The VC loves me. They want to invest.” Then I ask: “Did it go through IC?” And they say: “What’s IC?” So explain what the investment committee is and what happens.

Aram: The investment committee is the only internal client a VC has. It’s a meeting of the partners who vote on whether the firm will spend more time and money on a deal. Most firms have multiple committee gates before the final investment.

As a Founder, you meet one partner and they seem positive. But over time—every Monday, for example—that partner has to pitch your company, give updates, show progress. That’s why reporting progress matters.

Then they write a memo—10 pages, 20 pages, whatever—and bring it to the other partners.

And in the room, a lot happens that isn’t about the company. Some partners want the fund’s capital invested in their deals. Some are on a bad streak. If your champion is on a bad streak, they may have less clout. Others are on a winning streak and get listened to more.

Some people have double votes. Sometimes partners don’t like each other. Sometimes someone thinks you’re too young. All kinds of dynamics.

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24:51 The champion rule in venture capital

Aram: In my experience, the best IC rule for early‑stage VC is the champion rule—used by firms like Benchmark, Kleiner Perkins, Khosla Ventures, and others.

The partner on the deal team takes everyone’s advice, but in the end they decide. If they’re wrong, it’s on them. They lose money and take responsibility. But they can choose to invest even if other partners disagree.

If you don’t have that structure, you won’t get outlier performance, because truly disruptive ideas create natural skepticism.

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26:06 Inside the investment committee process

Jason: Quick break—if you’re a Founder doing over $5 million in revenue and want to know what the best $100 million‑plus Founders are doing to fuel growth, subscribe to our $100 million exits newsletter… (promo break)

Jason: Back to the show. Founders don’t realize they’re up against IC dynamics. What should they ask so they understand the process?

Aram: Ask: what’s the decision process? Who makes the decision? What happens on Monday? What happens after?

Talk to other Founders who got money from that firm. Those Founders now have the VC on the board. They often know who has influence.

Look at the partner you’re speaking to: how successful have they been, how long have they been there, what’s their position in the firm.

All of these things matter.

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29:37 Why founder empathy matters

Jason: Do you think Founders who lack empathy—who don’t understand “the strings”—are the ones who become most successful?

Aram: In my experience, it’s 50/50.

You have sophisticated, empathetic Founders who know what they’re doing and build great companies.

You also have wild cards. They can be polarizing, mission‑driven, and not very sensitive to what others think. Some of them win big. But most of those wild cards, in my experience, don’t work out—unless they get help, and unless they’re smart enough to listen.

At the same time, if you listen to everyone, you won’t be an entrepreneur. Everyone will tell you it’s not going to work. The best entrepreneurs learn who to learn from.

Jason: Advice is often delivered on incomplete information. What I look for is a Founder who talks to three or four people, hears their stories, and then charts their own path. Also: the more raw data a Founder shares, the more useful advice they get. Too many Founders only share “we’re awesome, everything’s perfect.”

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33:04 The power of honest communication

Aram: That’s another mistake: boards where everyone has the same opinion. If there’s dissent, people worry about debate. But I think Founders need respectful disagreement on the board so they get different perspectives. Founders have to be okay with dissent.

Jason: If everyone is a yes‑man, the company won’t win. I often play the dissenter for the exercise, because without the thought exercise—upside and downside—you miss things.

It causes friction, but it’s friction worth having when nothing is at risk in the moment. When there’s time, you can see the fork in the road early, collect data, gather opinions, get a devil’s advocate view—so you don’t hit a brick wall later.

The only way these conversations happen is with honest sharing of what’s going on. Founders who don’t share don’t succeed. When they’re open about problems, they get better feedback and can win.

Aram: And it connects back to prevention vs promotion focus. People who have been reinforced all their lives not to make mistakes can become entrepreneurs, but entrepreneurship requires learning through mistakes. Some Founders don’t tell their VCs what’s going wrong because they fear it will look bad. That fear of failure sits underneath it.

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36:28 How to evaluate emerging fund managers

Jason: We’ve talked about VCs evaluating Founders. What about LPs evaluating VCs—especially emerging fund managers with no track record? How does an LP decide?

Aram: Exactly. I call it the “emerging VC conundrum.” For a first fund—and even the second—you don’t have a track record. And even later, track record isn’t always a great filter because persistence is weak.

So what do LPs do? My team and I listened to hundreds of hours from leading LPs and found six criteria they use. Then we found that to excel at those six criteria, you need to be a promotion‑focused investor.

Here’s an example: fund size.

A first‑time GP comes and says, “I’m raising a $100 million fund.” LPs often hate that, because the first fund isn’t where you make money. It’s where you prove you can do the job.

Raise $5 million or $10 million. Beezer Clarkson (Sapphire) has a line along the lines of: your fund size won’t decide whether you raise or not. Do the first fund. Show you can deploy capital. Show what you invest in. Then raise fund two, bigger. Then fund three, bigger. One day you raise a $250 million fund and the economics work.

Emerging managers are often fund one to four. That can be a 10‑year journey.

Jason: The hard part is: raising $5–10 million can be as hard as raising $100 million. And the fund economics are brutal. A $10 million fund at 2% is $200k a year, then admin costs, support, and there’s not much left to pay yourself.

As an LP, what should I look for when 100 emerging managers pitch me?

Aram: 99% is the same as VC allocating to Founders.

You want traction. For a GP, traction means talking to startups, not just talking to LPs. You want term sheets, activity, being on the ground.

In the last six months I talked to 80 emerging managers—19% of them were only talking to LPs, not startups. That’s like a Founder talking to VCs instead of customers.

LPs look for:

• sourcing and access (some “unfair advantage,” even if it’s a loaded term),
• portfolio construction and VC math (reserves, number of companies, ticket size),
• team experience and cohesion,
• thesis fit (credible domain background),
• proxy track record (e.g., Angel investing),
• aligned terms (2% fee, 20% carry—not 4% or 30%).

I wrote a 60‑page report on this.

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43:01 Advice for new fund managers

Jason: You’ve trained over 50 VCs to be LP‑ready. What’s one key takeaway for aspiring fund managers?

Aram: Talk to people who’ve been in your shoes—not 10 years ago, but two to three years ago—especially in this market.

For example, Jeremy Tan in Singapore told me his biggest mistake was fund size. He aimed for $100 million, raised $30 million, felt like a failure. If he had aimed for $30 million, he would have deployed faster and raised the second fund better.

People often don’t do enough conversations about what they’re up against.

Jason: That resonates. I wish I’d done more of that earlier in my career. Now there’s so much content—podcasts like this—but it’s even better when it becomes a real conversation.

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