I find that almost all startups look much worse beneath the surface than they first appear. I think this is particularly true of stuff with hyper-growth or really impressive top-line numbers. It’s also particularly true as founders have become more adept at telling their stories and communicating what they’ve done and what they plan to do to investors.

One of the things that you learn to do pretty quickly as an investor is get beneath the surface. You learn to pretty quickly uncover the hidden tells, or soft assumptions of a business or of customer data. As the venture market has gotten more efficient, many (if not most) investments get priced to the point where there is almost always heartburn around a decision. This is why for every great company, there are many investors that could have had a chance to invest but did not, at least at some point in the company’s early life.

I used to think that the antidote to this was semi-blind conviction. Some investors just believe, and choose to ignore some facts in favor of others. That’s the skill and gut of the business.

But after some recent reflection and conversations, I am questioning that belief. Actually, I’m starting to think that the antidote to this is actually getting FURTHER beneath the surface one additional layer.

As a seed stage investor, we see A LOT of potential investment opportunities. You see a lot of patterns repeat themselves, both across companies today and across companies over time. It’s ridiculously easy to draw on personal experience or do a couple calls to knowledgeable people around a sector or opportunity and kill a deal. “It’s been done before”, “these companies have a hard time succeeding because of X”, “top line numbers are great but engagement is too low”. There are lots of easy things to identify.

But I’m realizing that the best investors actually push harder for deeper truths. Those cursory, beneath the surface objections are not so much deal killers, as they are magnifying glasses through which to push deeper into the merits or strengths of an opportunity. Doing the work allows one to form a strong, non-consensus opinion that a few diligence calls or cursory assumptions can’t. It’s less about gut, it’s actually about being more diligent and more inquisitive.  Actually, it’s also not just about doing due diligence. It’s about committing to using products and really trying to figure out what’s happening, or really trying to figure out how markets are changing and what old assumptions are on the verge of no longer being true.

The question then is how to handle your time. As a VC, you want to see more opportunities, not less, and the more time you spend on any one, the less time you have to see the next opportunity or to support your portfolio companies. Almost no one would say that the secret of VC is to spend more time and effort evaluating investments, and less time looking for new ones or working with companies.

But, I think that actually might be something I try to do more in the coming months. Chance favors the prepared mind, after all.