Most follow-on decisions aren't made with bad intentions. They're made with bad information.
In a recent webinar, Lisa Cawley, Managing Director of Screendoor, named the first place she sees fund operations break down as firms scale past a handful of portfolio companies. It isn't fund admin. It isn't LP reporting. It's follow-on discipline. And the root cause isn't a lack of conviction. It's a well-documented behavioral pattern called the endowment bias.
What the endowment bias actually does
Borrowed from behavioral finance, the endowment bias describes a simple but stubborn tendency: people assign extra value to something purely because they already own it. In public markets, it shows up when an investor holds a losing stock too long because selling it feels like admitting a mistake. In venture, Cawley pointed out, it shows up in two places: LP re-ups and follow-on decisions.
A VC doesn't sit down and think, "I'm going to put more capital into this company because I already have capital in it." The bias doesn't announce itself. It shows up as a feeling that this one is different, that the team just needs more time, that pulling back now would be premature. The reasoning sounds like judgment. Often it's attachment wearing judgment's clothes.
The hardest decisions, Cawley noted, were never the obvious ones. Nobody struggles to write a check for a rocket ship, and nobody agonizes over a clear no. As she put it, "the challenge really lives in the middle ground where you've sunk in time, you've sunk in obviously capital." That middle ground is exactly where endowment bias has the most room to operate.
Why this is a data problem, not just a psychology problem
Here's the part that matters most for anyone running portfolio operations: Cawley didn't frame the fix as "be more self-aware." She framed it as a systems problem. You need, in her words, "systems in place that are feeding you the data that you need... as fast as possible," because the alternative is making decisions on stale data and calling it instinct.
When a VC's only view of a portfolio company is a quarter-old deck or a backlog of unread updates, every follow-on decision gets made in an information vacuum. And humans do not fill information vacuums with neutral guesses. They fill them with whatever story is easiest to believe, and the easiest story to believe is usually the one that justifies the capital already committed.
This is the mechanism worth sitting with: stale data doesn't just produce worse decisions. It actively gives bias more room to operate. Current, accurate, accessible information doesn't eliminate human judgment from the follow-on decision, and it shouldn't. But it narrows the gap where a feeling can pass for a fact.
What this looks like in practice
Cawley shared a concrete example of what happens when this goes unaddressed: she's seen "funds where they have identical exposure to a company being marked at... widely different values on statements." Not because of a complicated multi-party cap table dispute, but simply because nobody had an up-to-date, shared pulse on what was actually happening with that business.
That's not a one-off clerical error. It's a symptom of a portfolio being tracked from memory and outdated documents. And if a fund can't agree internally on what a company is worth right now, it's worth asking what else in the follow-on decision is running on outdated information.
The fix isn't more data. It's the right data, current.
It would be easy to read this as an argument for collecting more metrics, more frequently, from more sources. The goal isn't volume. It's a current, trustworthy view of what's actually happening across the portfolio, available at the moment a follow-on decision is being made, not reconstructed after the fact from scattered spreadsheets and old decks.
That's the difference between a VC who can say "here's what the data shows me right now" and a VC who can only say "here's what I remember and how I feel about it." The first is making an investment decision. The second is rationalizing one.
If your team is the one chasing portfolio companies for updates every quarter, reconciling conflicting numbers across spreadsheets, or trying to give partners a current view of a company before a follow-on conversation happens, that gap between stale and current data is exactly where Visible's portfolio monitoring closes the loop. It's not about replacing judgment. It's about making sure the judgment is working from reality.
