The Most Expensive Mistake in Venture - Solving the Wrong Problem

An LP I know (and who’s on this mailing list - hello) recently told me:

“The signal-to-noise has gotten so bad, I’m not sure how anyone stands out anymore.”

He looks for managers who are "magnets" for high-quality deal flow - not another needle in a haystack fund, but someone with such a clear and credible position that the best founders actively seek them out.

That line captures the core issue for fund managers.

What feels like a marketing problem or a deal flow problem is usually a positioning problem.

The Misdiagnosis Trap

A secondaries fund once came to me convinced their biggest challenge was “low engagement” on social.

They were posting three times a week. The posts were polished, branded, full of stats and industry jargon. And yet… crickets. No comments, no inbound, no deals.

They’d already decided the answer was to step up content production and go hard on video. They were ready to try a six-month campaign.

But halfway through explaining their plan, we stopped them.

Engagement wasn't their problem. People didn't know what they stood for, so they had nothing to engage with.

This happens all the time in venture, both with funds and portfolio companies.

We inherit problem definitions from inside the building:

• “We need more deal flow.”

• “We need a new website.”

• “We need to create more content.”

But those are symptoms, not problems.

Remember that scene from Moneyball? baseball scouts judged players by whether they had a “good face” instead of their on-base percentage.

We can do the same thing - chasing surface-level fixes because they’re visible, familiar, and comfortable to measure.

When you misdiagnose the problem -

• Burn time and money on fixes that can’t work.

• Stuck in endless cycles (“We need more traffic!”) without addressing the root (“Our offer is unclear”).

• Strategies optimise for the wrong thing.

As they say, to a hammer, every problem looks like a nail.

For that partner, more content would have meant more noise, not more traction.

I realise this is shooting myself in the foot… after all, I literally get paid to deliver content strategies, rebrand funds, and reposition decks.

But those things only work if we’re fixing the right problem in the first place.

One of the ways I differ from a regular freelancer or agency is that I’m close to the ground in capital raising / deal flow. That vantage point makes it painfully obvious when a request is misdiagnosed.

The Real Problems Behind Common "Problems"

Most VC "problems" are actually three problems deep.

How to find the real problem

Keep asking “Why?” until it hurts

If you believe, “We need more engagement,” ask: “Why?” If the answer is “to get more inbound,” ask: “Why aren’t we getting inbound now?” Keep going until you hit something fundamental.

Separate symptoms from causes

Low engagement might be caused by weak positioning, a misaligned audience, or unclear messaging - none of which more posts will fix.

Test before you scale

Before spending big bucks figures on a rebrand, test a positioning change in a few posts, on a landing page or a report/market map. See what moves.

A great example of this is the first fund I ever worked with shifted from a generalist fund, to a media tech fund. Over the course of two years, we ran several vertical specific pitch days, alongside a more general Fund I, which set the spring board to a specific Fund II.

For a VC, solving the right problem can change everything

For most emerging managers, it's rarely a “brand” problem in the conventional sense. It's usually a volume problem (not enough systematic outbound) or a quality problem (generic positioning that attracts generic inbound).

A "deal flow" problem might actually be a "brand" problem. But a "brand" problem might actually be a "focus" problem.

Before you hire anyone, buy anything, or launch any new initiative, run this diagnostic on your biggest challenge:

1. Write down your surface problem - "We need more X"
   
   “We Need More LP meetings”
   

2. Ask why three times - Keep digging until you hit something structural about your positioning, expertise, or approach
   
   “Because we want to raise a fund” —> “Because we want to find the next unicorn in climate tech” —> “Because if the best climate founders can’t raise from funds positioned to lead and support them, the technologies needed to fight climate change won’t scale in time.”
   

3. Test the real problem with small experiments
   
   Draft one-line fund pitches - different lenses (quality problem) e.g. returns-first, impact-first and send to 5 people in your pipeline (volume problem).
   

4. Measure what actually moves
   

   Measure how many reply, request more detail, or intro you on.

Whether you're trying to raise capital, win deals, or build lasting LP relationships. Fix the right problem, and everything else starts working harder.

Laurie, Refinery Media

If you made it all the way through, thanks so much for reading! Several hundred VCs now open this every week. If it’s helped you think differently about marketing, Venture, or storytelling, please send it to someone in your orbit.