VCs Podcasting Addiction and Its Implications
Podcasts present many opportunities for both VCs and startups from deal sourcing, brand and narrative building, to even the democratization of knowledge. However, it seems like these benefits have prevented many from seeing the risks associated with leaning too heavily into podcasting.
Relative to any other corner of finance, venture capital has developed an unusual reliance on podcasts. The reasons for the sector’s embrace of podcasting are very logical. Compare VC to nearly any other sector in finance: venture thrives on visibility. Whereas a private equity firm engaging in podcasting might seem unprofessional, for VCs it is seen as being part of the ecosystem. Venture capital is a narrative driven industry, with visions and marketing often mattering more than the numbers behind a startup. Since startups (and sometimes VCs) rarely have the track-record to be deemed trustworthy, founder reputation is initially built through charisma and personality. Podcasts provide founders an outlet to build credibility and VCs with an opportunity to develop an aura of intellect and industry relevance, helping attract deal flow.
Despite the many benefits of podcasting for VCs and founders, the sector’s reliance on podcasting risks permanently damaging the industry. Firstly, podcasting contributes to echo chamber dynamics and the commoditization of insights, wherein different podcasts recycle each other’s ideas and narrow creativity. This could lead to greater hype amplification (something we are already seeing) and the erosion of insightful thought leadership, all resulting in reputational fragility. Equally important, podcasts reward bold, contrarian takes and shocking personalities. While the tech space will undoubtedly always have an element of eccentricity, the podcasting medium could tilt the industry towards marketing driven behavior, creating a mismatch between PR and product quality.
Podcasting has clearly helped many in the VC space, but its effects on the sector need to be monitored to ensure that crazy statements on-mic with Dwarkesh do not replace intellect and investment savvy. * Written by Benicio Becka, Senior Editor
Benicio is a Sophomore at the University of Chicago studying Business Economics with a deep interest in seed stage startups and startup financing.
