Why Does David Tisch Take 1 Percent Ownership?

David Tisch will take a 1 percent or 2 percent stake when the founder is unbelievable and the opportunity is amazing. Requiring ownership made him turn down great businesses over time, and he calls the decisions terrible.

At the initial check the firm owns 1 percent on some deals and 10 percent on others, with everything in between, and no ownership level is too low. A really small check leaves him sad, but the decision comes down to yes or no. Small checks happen most when the firm gets to a deal late and is left begging for scraps. Getting there late is the firm's fault, so the work is to meet founders earlier, before a company exists. In different market conditions the win rate ebbs and flows between 70 and 90 percent, and getting to a company too late is the single factor that causes the most losses. Speed of decision making and access to the opportunity are the two factors the firm controls that hurt it most. The team is 10 investors, with six partners. They have worked together a long time, and the job each day is to meet the next founder they are excited to back.

He no longer needs to lead. A smaller check means he rarely loses a deal he wants. If he had to only lead, the win rate would come down dramatically, and he does not want to be in the pure-play lead-only seed business.