In the world of venture capital, it is not uncommon to make most of your money off only a small fraction of your investments. Here’s how Fred Wilson describes his firm’s “batting average”:

“I’ve said many times on this blog that our target batting average is “1/3, 1/3, 1/3” which means that we expect to lose our entire investment on 1/3 of our investments, we expect to get our money back (or maybe make a small return) on 1/3 of our investments, and we expect to generate the bulk of our returns on 1/3 of our investments.”

I’m guessing that this is one of the reasons why mistakes are more readily embraced – or even celebrated – in venture capital and in tech. It’s part of the DNA of the industry.

A perfect example of this is something called the Anti-Portfolio. Venture capital firm, Bessemer Venture Partners, has a page up on their website dedicated to “honoring those we missed.” It is a list of phenomenally successful companies that for various reasons BVP decided not to invest in. That is, they had the opportunity but they decided to pass.

Here’s a taste (copied verbatim from their site):

• [Apple] BVP had the opportunity to invest in pre-IPO secondary stock in Apple at a $60M valuation. BVP’s Neill Brownstein called it “outrageously expensive.”
  

• [Facebook] Jeremy Levine spent a weekend at a corporate retreat in the summer of 2004 dodging persistent Harvard undergrad Eduardo Saverin’s rabid pitch. Finally, cornered in a lunch line, Jeremy delivered some sage advice “Kid, haven’t you heard of Friendster? Move on. It’s over!”
  

• [Google] Cowan’s college friend rented her garage to Sergey and Larry for their first year. In 1999 and 2000 she tried to introduce Cowan to “these two really smart Stanford students writing a search engine”. Students? A new search engine? In the most important moment ever for Bessemer’s anti-portfolio, Cowan asked her, “How can I get out of this house without going anywhere near your garage?”
  

As I was going through BVP’s Anti-Portfolio, I immediately thought about how different this sensibility is compared to the real estate industry. I mean, could you imagine a developer celebrating all of the sites she or he passed on and all of the projects that lost or made no money?

One of the reasons you do this is to learn from your mistakes. So perhaps we could all use some sort of “anti-portfolio.”