Company building is a long-term game, not a sprint. A single early success in an investor's career can easily be attributed to luck. True investing prowess is demonstrated through consistent, patient backing of companies over the long haul, understanding that there are no overnight successes in venture capital.

When facing a potential firm collapse, Rich Pzena coped by viewing failure not as a catastrophe, but as simply returning to his previous job. This mindset mitigated the fear that paralyzes many entrepreneurs, allowing him to persist through a 60% underperformance during the dot-com bubble.

After the dot-com bubble burst, Jeremy Grantham's GMO was vindicated. However, the clients who had fired them for underperforming during the mania did not return. The firm attracted new clients who appreciated their discipline, but the original relationships were permanently severed by the pain of relative underperformance.

When a fund manager faced a ~50% drawdown, his commitment to earning back capital, rather than becoming defensive or threatening to close, was a key signal. This behavior justified staying invested through the trough, ultimately leading to a 5x return.

Investors often prefer that a founder who loses conviction in their initial idea pivot and use the remaining capital on a new approach, rather than shutting down. Returning a fraction of the investment is a worse outcome than betting on the founder's talent to find a new path in a large market. The money is a sunk cost; the founder is not.

Great investment outcomes often require weathering long periods of underperformance. The ability to remain patient, like holding a stock through five years of losses before it triples, is a critical skill. This long-term conviction, grounded in business fundamentals, is what separates successful investors from the rest.

Rather than abandoning an investment category after a failure, some VCs intentionally fund the same idea again in a new company. This strategy is not about repeating mistakes, but a high-conviction bet that the core idea was simply ahead of its time and that a change in timing or underlying technology will enable its success.

Founders Fund invested nearly 10% of its fund into SpaceX immediately following a launch failure, betting on Elon Musk's team despite their lack of aerospace experience. This exemplifies a high-conviction, founder-centric investment thesis that ignores conventional industry wisdom and short-term setbacks.

Rich Pzena reveals his deep value firm accepts losing money on 40% of its investments. The strategy's success relies on outsized returns from the 60% of picks that work, demonstrating that a high failure rate is an inherent and acceptable part of deep value investing.