Casado argues that while VCs preach non-consensus investing, later-stage funding rounds become increasingly consensus-driven as check sizes grow. Startups that are too far off-consensus risk being unable to secure the necessary follow-on capital to survive and scale.

The venture market has shifted from seeking contrarian bets to piling capital into consensus winners, even at extreme valuations. The new logic resembles the old adage "you can't get fired for buying IBM," where investing in a perceived leader with a 1x preference is deemed a safer, more defensible capital allocation decision.

As venture capital firms scale to manage billions, their business model shifts from the 'artisan craft' of early-stage investing to an industrial process of asset gathering. This makes it difficult to focus on small, early opportunities and will likely result in IRRs that are no better than the industry average.

Instead of coaching unconventional founders to be more palatable for mainstream Series A investors, early backers should encourage them to lean into their unique traits. The investor's role is to help them find the right future partners who appreciate their peculiar worldview, not to change it.

While a first fund is raised on a compelling vision, raising a second requires demonstrating institutional maturity. LPs shift from underwriting a founder's promise to underwriting a firm's ability to be "consistently excellent." The narrative must evolve to highlight repeatable processes, refined decision frameworks, and a scalable organizational structure.

Founders must have conviction, as even their most sophisticated investors can fundamentally misjudge a bold strategic shift. A Sequoia Capital partner admits their own investors strongly opposed a pivotal move into logistics, demonstrating that founder vision must sometimes override expert consensus.

Generating disproportionate returns requires holding an original, contrarian perspective that the market initially dismisses as "stupid." The ability to persist with a non-consensus belief until it's proven correct is a core, and rare, quality of great investors.

Large, contrarian investments feel like career risk to partners in a traditional VC firm, leading to bureaucracy and diluted conviction. Founder-led firms with small, centralized decision-making teams can operate with more decisiveness, enabling them to make the bold, potentially firm-defining bets that consensus-driven partnerships would avoid.

While limited partners in venture funds often claim to seek differentiated strategies, in reality, they prefer minor deviations from established models. They want the comfort of the familiar with a slight "alpha" twist, making it difficult for managers with genuinely unconventional approaches to raise institutional capital.