Timing matters

This interesting bit of venture history appeared in a recent Pro Rata newsletter:

Fourteen years ago, venture capital firm Kleiner Perkins raised $200 million for a fund dedicated to “worldwide pandemic preparedness and global health, with a focus on surveillance and detection, diagnostics, vaccines and drugs.

Why it matters: Several companies from that portfolio are now part of the fight against COVID-19, and the fund’s partners played a part in creating a government agency called BARDA that’s been helping to fund coronavirus test and vaccine development efforts.

In venture, we often ask ourselves the three why’s when we are assessing investment opportunities – why this problem statement / market opportunity, why you, and why now.

For me, it’s relatively easy to discern the validity of a problem statement or market opportunity, and the relative quality of the founding team (why you). The trickiest is the question around timing (why now).

Market timing is tough to get right; too early, you risk spending too much time and money waiting for the market to catch up. Too late, competitors drives away profits and establish barriers to entry. The magic seems to be slightly early, by not being the first mover but early enough to define the category and own the market. Think Google & Facebook. In the case of Kleiner Perkins, this speaks to the difficulty of timing in the financing of innovation. They were clearly right, though a little early.

In any case, I’m glad that the seeds of a potential solution to today’s COVID-19 problems were planted 14 years ago, and i am curious what would the seeds i plant today grow into, in the years to come.