Luck, Probability & Decision Trees: VC and Entrepreneur Peter Herz

Peter Herz is a serial entrepreneur turned venture capitalist. Currently, he is general partner of 1st Course Capital, a VC firm focused on early-stage food and agricultural companies. When Peter faces tough decisions—like selling a concentrated stock position, considering investments, or choosing from a variety of paths for his portfolio companies—Peter uses a powerful tool called a decision tree. In this episode, he explains how he assigns probabilities to the various branches of the decision tree, and how this helpful tool keeps him from losing everything. 

You can create your own decision tree using the resources in the show notes. Here’s a plug-in for decision trees and other elements to support decision analysis that works on top of Excel. The link for 1st Course Capital’s decision modeling for investments is available here.

Peter Herz's LinkedIn

Joyce Franklin's LinkedIn

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Decision tree graphic from Startup Wealth

Decision tree model templates

Decision Tree add-in for Excel

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