Rahul Sharma

Freshly inspired from reading the book “The courage to be disliked” by Fumitake Koga and Ichiro Kishimi, a recommendation from Marc Andreesen, I thought about venture capital (VC) from the perspective of Alfred Adler’s principles. Below is a synopsis of an adlerian thesis of VC.

An Adlerian Approach to Venture Capital: Empowerment, Cooperation, and Holistic Investment

Alfred Adler, an Austrian psychologist, was one of the pioneers of individual psychology, which focuses on the uniqueness of the individual and the role of social context in shaping their behavior. Adlerian psychology emphasizes the importance of individuals’ goals, beliefs, and social connectedness in determining their actions. In the context of venture capital, an Adlerian approach would prioritize empowering founders, fostering a collaborative environment, and developing a comprehensive understanding of the market. This essay will explore how an individual who believes in Adlerian psychology would operate a venture capital (VC) fund, the types of founders they would believe in, and the market thesis that would guide their investments.

I. The Operator: The Adlerian Philosophy

1. Empowering Founders: An Adlerian VC would focus on empowering founders to achieve their full potential. This involves providing not only financial support but also mentorship, guidance, and resources that align with the founder’s goals and values. By adopting a holistic approach, the VC helps founders overcome personal and professional challenges, ultimately leading to the growth of both the individual and the startup.
2. Fostering Collaboration: In line with Adler’s emphasis on social interest, an Adlerian VC would prioritize collaboration and teamwork among portfolio companies. This involves facilitating partnerships, sharing resources, and providing networking opportunities for founders to learn from one another. By fostering a sense of community, the VC helps create an ecosystem where all parties can thrive and succeed together.
3. Personalized Investment Strategy: An Adlerian VC would recognize the uniqueness of each founder and startup, tailoring their investment strategy accordingly. They would consider factors such as the founder’s background, personal strengths, and aspirations, as well as the startup’s market potential, growth trajectory, and overall impact. This personalized approach allows the VC to make informed decisions that align with their broader values and goals.

II. Investing in Founders: The Adlerian Criteria

1. Social Interest and Impact: An Adlerian VC would be drawn to founders who exhibit a strong sense of social interest and a desire to create a positive impact on the world. This includes entrepreneurs who prioritize sustainability, inclusivity, and social justice, as well as those who leverage their businesses to address pressing global challenges.
2. Resilience and Adaptability: In accordance with Adler’s concept of overcoming inferiority, an Adlerian VC would value founders who demonstrate resilience and adaptability in the face of adversity. This includes entrepreneurs who are open to learning, possess a growth mindset, and have a track record of overcoming obstacles and setbacks.
3. Holistic Growth: An Adlerian VC would invest in founders who prioritize holistic growth and self-improvement, both personally and professionally. This includes entrepreneurs who are committed to personal development, continuous learning, and the pursuit of a balanced and fulfilled life.

III. Market Thesis: The Adlerian Perspective

1. Human-Centric Innovation: An Adlerian VC’s market thesis would emphasize human-centric innovation that prioritizes individual well-being, social cohesion, and environmental sustainability. This includes sectors such as healthcare, education, clean energy, and social enterprise, where innovation has the potential to make a tangible difference in people’s lives.
2. Long-Term Value Creation: In line with Adler’s focus on the long-term development of the individual, an Adlerian VC would prioritize investments that create lasting value and contribute to the greater good. This involves identifying opportunities with significant growth potential, as well as those that address unmet needs and drive positive change.
3. Ethical and Responsible Investing: An Adlerian VC would emphasize ethical and responsible investing, seeking out companies that operate with integrity, transparency, and accountability. This includes supporting startups that prioritize fair labor practices, environmental stewardship, and corporate social responsibility.

Conclusion

An Adlerian approach to venture capital offers a unique perspective on investing, one that emphasizes empowerment, collaboration, and holistic growth. In conclusion, an individual who believes in Adlerian psychology would operate a venture capital fund with a focus on collaborative relationships, holistic evaluations of founders, and ongoing encouragement and mentoring. They would be drawn to purpose-driven, socially responsible entrepreneurs with strong team-oriented and collaborative mindsets.