The worst feeling for an investor is not missing a successful deal they didn't understand, but investing against their own judgment in a company that ultimately fails. This emotional cost of violating one's own conviction outweighs the FOMO of passing on a hot deal.
Limited Partners (LPs) value fund managers who are willing to listen and internalize market feedback, even if they ultimately follow their own strategy. This openness is a key positive signal, while a refusal to listen is a major red flag that often appears early in the relationship.
Since startups lack infinite time and money, an investor's key diligence question is whether the team can learn and iterate fast enough to find a valuable solution before resources run out. This 'learning velocity' is more important than initial traction or a perfect starting plan.