Why do VCs say they are different from other VCs?
When talking to venture capitalists (VCs), I keep noticing how they feel the need to differentiate themselves from other VCs. In this newsletter, I explore why.
Dear readers,
This is part three of a series of newsletters based on my dissertation about the subjectivities of Indonesian venture capitalists (VCs)—essentially, the personhood one has embodied as a result of being in the space, and simultaneously, the personhood that affects the way the space runs; it’s a co-constitutive process.
If you are a new reader, welcome! In case you haven’t read my previous posts: in Series 1, I talked about why I decided to do an ethnographic research on venture capitalists as an anthropology student; in Series 2, I explained how I went about immersing myself in the world of VCs. In this series, I’m exploring a question I stumbled upon as I conversed with my informants: why do VCs insist they are different from other VCs?
As a side note, I’ve been absent from publishing for the past couple of weeks as I am exploring different things to write about in my newsletter. I’ve been attending more tech and tech-related events in London in the past few weeks, and I’ve been inspired to take this newsletter in a different direction. Wouldn’t it be fun to sort of crash networking events where I have close to zero knowledge about what’s been happening in the industry? I’m aiming for as many “fish out of water” encounters as possible. But before that, I thought it would be nice to finish this series, or even to alternate between writing up past and current explorations. Stay tuned!
I noticed lingering scepticism among Indonesian venture capitalists (VCs) when it comes to their peers’ branding practices.
“A lot of what they’re saying is basically bullshit,” Marcel (not his real name), an Indonesian-born VC based abroad, told me over a video call. Marcel has been working in the investment industry for about a decade. I met him at a networking event in Jakarta one evening in May 2024. He was flying back the next day, so we reconnected on LinkedIn and set up an online call, which coincided with the end of my fieldwork (late June 2024). By the time we spoke, I had gotten the chance to review my field notes, and I brought up some of my observations for him to weigh in. I asked him the one question that immediately came to my mind when I first started interviewing my VC informants: Why do VCs say they are different from their peers?
“There’s a lot of flexing in VC because you need to build your brand. Hey, I invested in these guys, so you need to invest in me because I found them, and I can find another one,” Marcel explained, giving an example of a common way VCs try to establish their brand in the industry. But a lot of VCs’ selling points are interchangeable, said Marcel. For example, a VC can pitch to founders who do not come from a financial background that they can help the founders with financial planning. Such a skill set, however, is not exclusive to one VC alone, considering that many came from a background in finance. There lies an inherent tension of having to differentiate yourself from your peers when there are not many unique ways to differentiate yourself. Hence, why Marcel thought of this act of differentiation as “bullshit”.
The expression of suspicion in the branding of others within the industry appeared in conversations I had with various informants. There were portrayals of “the other” as a scheming, untrustworthy, ego-driven individual—in other words, inauthentic.
In portraying others as inauthentic, I’m making the case that VCs are simultaneously presenting notions of authenticity. By establishing distance from the inauthentic “others”, they consequently attach themselves to an imagery of the idealised subject—the authentic subject. I’m not making any claims that one is a more successful investor than the other. It is likely that both the “inauthentic” and “authentic” subjects are equally capable of generating decent returns to their funds. But, the idea is that the authentic subject possesses an additional ability to enchant as they manage to establish themselves as successful while being perceived as moral and competent at the same time. Such is the subjecthood that the Indonesian VCs seem to strive for.
Many of my informants have shared rhetorics that capture ideas of authenticity. They perceive their work in venture capital as part of a desire to innovate, an extension of a love for the art of entrepreneurship, or as a way to encounter novelty constantly. Because you’re trying to capture “the next big thing”, no day is the same for a VC, and that sounds like a more ideal form of labour.
These seemingly “pure” desires stood out in the finance industry, which is widely understood by both people outside and within finance as an industry that runs on greed, corrupt desires, and making money for the sake of making money. In Karen Ho’s ethnography of Wall Street investment bankers, “Liquidated”, published in 2009, for instance, she writes how money was regarded as the most important motivation for work by investment bankers, and that compensation is the biggest personnel issue on Wall Street. This, however, is not exactly the case in venture capital.
The informants whom I spoke to who took financial compensation into account as a determining factor as to why they wanted to pursue venture capital were noticeably the young VCs who recently entered the industry. But most of my informants, having had years in the field, did not present money as the be-all and end-all reason for the work that they do. They try to establish that there is a bigger, more “genuine” reason why they are in the space.
Other ethnographies of finance have captured this desire from VCs to differentiate themselves from other financial people. In Tianyu Xie’s doctoral dissertation of Chinese VCs in the United States, “Making Connections and Investments: An Ethnography of China-to-US Venture Capital Business”, published in 2021, she writes how VCs view themselves as “lofty and adventurous Silicon Valley thinkers”, separate from the Wall Street fund managers who are seen as aloof and “(sort-of) ‘evil’”.
In my encounters with VCs, I found it interesting how VCs' act of differentiation extends beyond separating themselves from other financiers; they also differentiate among themselves, which seems to be an essential labour within their industry—it is an act of branding, if anything. You may think to yourself, that sounds like an oxymoron: branding oneself as authentic. The idea of deliberately creating an image of oneself stands in contrast with being true, being real.
But I am limiting myself from delving into that philosophical debate. I’m taking a more pragmatic approach—I’m writing it how I perceive it. Authenticity is a branding strategy. I’m not differentiating between real authenticity and manufactured authenticity. I’m making the case that either way, authenticity as a brand helps VCs to stand out in a sphere where others are believed to be untrustworthy. Sometimes the branding comes subtly, other times it’s very overt.
Here’s a brief excerpt from my interview with a VC who portrayed themself as the only good actor in an industry where everyone else is conniving:
Informant: The VC world is mean. People are so mean.
Dita: Have you stumbled upon a good VC?
I: This! That’s why I’m here. (“This” refers to the company where the person works.)
During that conversation, as I’m sitting opposite to my informant in a crowded restaurant in the posher part of Jakarta, some parts of me believed that this person really do think that they are “one of the good guys”, or to be more accurate to what’s being implied in the conversation above, “the only good guy”. I can’t help but wonder how comforting that worldview must have been. To so decisively separate oneself from the failures and missteps the industry has made.
It’s kind of like being a journalist, if I think about it. During my previous role working for a publication that focuses on writing long-form as opposed to covering news, I kept having to explain to people I spoke to how we were covering stories differently. “We don’t cover the fluff, we cover the real stuff.” Something along that line. Said more politely, of course. Did I believe it? Of course, I did. I didn’t work so hard for a journalism vision I didn’t believe in. But was it also true that that worldview became a sort of trap? Probably. Beliefs of exceptionalism feel incredibly assuring, especially in a world where there is very little stable footing.
In practicing self-reflection, I realised I did hold on to that belief so tightly at a time when everything else felt unstable. It was during Covid-19. Newsrooms were hit hard. There was more to cover, but burnout was prevalent. The idea that we’re doing good, in a sense that we labour for “the good stuff”, which consequently makes us one of “the good ones”, felt nice. It felt grounding.
I noticed the same kind of pattern in the world of venture capital.
It’s a disruptive industry; you are looking for disruption, for change. You’re making bets on a future that may or may not come to be. And you want to be on the profit-making side of the equation. You labour in an uncertain world, make profits out of uncertainty, and in the process, make the world more uncertain for others. Operating in such a world, you have to become a certain kind of individual and embody a certain kind of subjectivity. The authenticity as a branding is a manifestation of that subjectivity, I would argue.
Portraying oneself as authentic is a practice that a self-enterprising, self-reliant individual has to be adept at as a form of strategy to cope with the uncertainties that emerged from a changing world, a neoliberal world—a world where traditional forms of safety nets have become unreliable, or are never present to begin with. The pressure to create a good life is increasingly placed upon the individual, and away from social institutions. A neoliberal subject is formed in the process.
In my dissertation, I’ve argued more thoroughly how the subjectivity of a venture capitalist is that of a neoliberal self. (I’m conscious of writing too long in my newsletter, so I’m leaving the more “academic” discussion out. If you’re interested in reading that version, send me a message!)
I argue that this neoliberal self becomes most apparent in the scepticism VCs have over the branding practices of the neoliberal others. The idea is that as a neoliberal subject whose main goal is self-survival, one must operate under the framework that others are also trying to get the best deals for themselves, even if it’s at the expense of other individuals. If you are not constantly looking out for yourself, others would “steal your lunches”. The mistrusting, outwardly critical attitude displayed by the Indonesian VCs is part and parcel of the self-economising, self-reliant, self-directing neoliberal subject; the entrepreneurial self.
But why does the differentiation have to come in the form of presenting oneself as the more authentic subject?
It’s a way of producing hierarchies. I’m making the case that embedded in the work of differentiating oneself is the work of class formation. In presenting oneself as authentic, that one cares about the industry and strives to conduct oneself in what one believes to be the ethical way of doing business, a VC is making a statement that they are a subject that gets to be authentic, that gets to care, that gets to be ethical. Care and ethics are an extension of power and privilege.
Whereas others invest just to flip deals and make money, I invest to make innovation accessible to the world. To support founders. To find the next big thing that will make a difference in the world. You get the picture. I’m not describing this with a note of sarcasm, just to be clear. I don’t have a personal stance as to what’s the right motivation to be a VC, and I am not making a case that there is a right motivation to be a VC. I am merely describing things the way I see them.
In conclusion, why do VCs say they are different from their peers?
It’s because in the world of VCs, standing out is required to fit in. For one to operate in a world where everyone is self-economising, one needs to constantly be on the lookout for one’s own survival. One needs to constantly make a case for oneself why one is more useful, more competent, more connected, more successful, more interesting, more unique, more special than other VCs. In a world where the benchmark for success and the rules of the game are always changing, the internalisation that one is different, and that being different will improve one’s odds of “winning”, becomes a required mindset to participate in the arena.
To be different is to belong.
I guess no occupation is immune from pick me attitudes