Ego is not your Amigo

You are not the smartest person in the room.

“Your ego is writing checks your body can’t cash” - Stinger, Top Gun (1986)

In the hothouse atmosphere of the startup world, ego flourishes like weeds after a spring rain. Having sat in countless boardrooms over decades, I’ve witnessed the spectacular implosions that occur when self-importance overwhelms good sense. The venture capital industry suffers from a particularly virulent strain of this affliction.

Young VCs enter an environment where flattery is currency and everyone wants something from them. Founders treat them like kingmakers. Limited partners shower them with billions. Before long, many begin believing their own mythology. It would take the fortitude of a saint to resist such temptations.

Flattery is currency in venture. Ego is the inflation that follows.

The symptoms are unmistakable: the investor who dominates board meetings with hour-long monologues about their grand strategic insights (which frequently prove worthless), the partner who chronically arrives late to founder meetings (sending the message that their time matters more), the VC who ghosts entrepreneurs during critical decisions because something more important came along.

When an investor’s ego takes the wheel, rational decision-making flies out the window. We see it in the “big check syndrome,” where VCs deploy outsized capital not because the opportunity demands it, but because winning the deal feeds their vanity. I’ve seen funds put 30% of their capital into a single investment, ego dressed up as conviction, a glaring red flag that common sense has gone on holiday.

Ego dressed up as conviction is a red flag, not a strategy.

I once witnessed a junior partner become visibly upset after The Wall Street Journal requested an interview with the founding partner rather than with him, despite the fact he was the one working with the company “day to day.” The junior partner complained bitterly about being overlooked, completely missing that the newspaper wanted the perspective of the more experienced investor. This childish reaction created unnecessary tension that distracted from what should have been the focus: the portfolio company’s success.

Even more pernicious is how ego poisons the founder-investor relationship. The best VCs view themselves as service providers to entrepreneurs, offering guidance from the shadows. The worst, and they are legion, behave as if they’re the star of the show, with founders merely implementing their grand vision.

Founders build companies. VCs build mythologies.

This isn’t just philosophically backward, it’s empirically wrong. In my years of investing, I’ve never seen a successful company built by venture capitalists. They’re built by founders and their teams, period. The notion that a VC who spends a few hours a month thinking about a company knows better than those living it day and night is one of the industry’s most persistent delusions.

Yet the industry perpetuates a dangerous mythology around investor infallibility. Consider how often founders are replaced at investor behest, between 20–40% of startups eventually see their founders shown the door. While sometimes necessary, these moves frequently stem from investor hubris rather than objective performance issues.

The industry-wide implications are equally troubling. Ego drives herd mentality, as VCs pile into trendy sectors less from conviction than fear of missing out. Nobody wants to admit they missed the next big thing, so rational analysis gives way to following the pack.

Ego doesn’t just follow trends, it funds them.

Ego also fuels the toxic “growth at all costs” ethos, as we saw spectacularly with WeWork, where SoftBank’s Masayoshi Son told Adam Neumann he wasn’t “crazy enough” and should think “10 times bigger”, a perfect storm of inflated egos that nearly destroyed a potentially viable business.

I’ve found that maintaining humility isn’t just morally correct, it’s pragmatically superior and shockingly rare. The VC who approaches each founder interaction as a learning opportunity rather than a chance to pontificate gains insight that self-important investors miss. Being self-deprecating in board meetings and founder interactions goes a long way, further than most investors realize.

Humility isn’t weakness. In this business, it’s an edge.

A well-timed admission of past mistakes disarms tension and creates space for honest dialogue. When an investor can laugh at their own missteps rather than projecting infallibility, founders feel safer sharing challenges instead of just showcasing successes.

There are encouraging signs of change. The most thoughtful investors now openly acknowledge the ego problem and work actively to counter it. More firms emphasize empathy as a core value, measuring success not just by returns but by founder satisfaction. For their part, founders have become savvier about investor selection, conducting extensive reference checks on VCs’ personalities and working styles.

The industry’s future belongs to investors who combine analytical rigor with genuine humility, who understand that their role is to serve founders, not control them. Those who can keep their egos right-sized while maintaining the conviction to back transformative ideas will outperform peers who succumb to self-importance. The market has a way of eventually humbling even the most arrogant.

In an ecosystem built on risk and innovation, perhaps the greatest risk lies in our own psychology. The next time you feel yourself drifting toward arrogance, that creeping certainty that you’re the smartest person in the room, remember:

In venture capital, as in life, ego is not your amigo. It’s your most dangerous adversary.