Michael Moritz, a general partner at Sequoia Capital, has made a lot of money for investors over the years by picking the right entrepreneurs to bet on. He backed the founders of Yahoo, Paypal, and Google, which so far has returned 560 times Sequoia's original investment. He's also had his share of dogs, like Webvan. So it was interesting to hear him tell attendees at the IBF Venture Capital Investing Conference in San Francisco last week about Sequoia's struggles with judging people. "We're very bad at being able to predict human performance," he said. He went on to describe some of the maniacs the firm has unwittingly invested in over the years.
"We never thought we'd wind up in business with a CEO who kept a gun in his drawer," Moritz said. "The same individual went home and trained wolves. There was another character who had a big drug habit that we had no idea about when we made the investment. There was another co-founder who on a Sunday afternoon at a startup in Santa Clara tried to kill his co-founder by driving a pickup truck through the plate glass window. We are often wrong about our assessments and judgments about people."
I guess I won't feel so bad the next time I trust the wrong the source. Unless he drives a pickup. For more on "toxic entrepreneurs," read this story by Connie Loizos.