There is a story operators tell when they move into venture, which is that having built things makes you better at backing them. It is half true, and the half that is false costs founders money.
I have done both now. Three companies of my own, four organizations as an executive, and for the last stretch a small fund and studio, plus a year inside a seed fund running product reviews across a portfolio (roughly thirty companies, most of them at seed). What follows is an attempt to be specific about which parts of the operating history transfer and which parts actively mislead, because the general claim is useless to everybody.
Three things the history lets you see
Whether a metric was built to flatter. Anyone who has run a review cycle has watched a number get defined by the person it will be used to evaluate, and you develop an ear for it. A founder counts active users and a session counts as a user. A retention figure arrives with no window attached. I ask about the definition rather than the value, every time, and the answer is almost never dishonest. It is usually a house measurement nobody has had a reason to break, and what I learn is whether this team argues with itself.
Whether a team can ship or is describing a plan to ship. These sound similar in a meeting and are not remotely the same. The question that separates them is what went out in the last two weeks. People who build answer with something specific and usually show you, frequently something small and unglamorous. People who have outsourced their own product judgment answer with a roadmap. I was on the wrong side of that question myself for a period of years, when I could describe what my organization was building and could not have opened the thing and used it.
What a hire will actually cost. Not salary. A founder says they will hire a head of design in the spring and I can see the six months that follow: the search, the ramp, the reorganization of everybody's expectations around a person who does not yet have context. Sometimes the right advice is that the role is a year premature and the founder should learn the tools well enough to write the specification themselves. I have given that advice three times this year to founders asking whether to add a second designer, and said no every time, for different reasons.
Three ways it makes you worse
Now the part operators do not put in their fund's positioning.
You pattern-match to your own path. My history is a marketplace, a mobility company, a writing tool and a presentation tool, mostly consumer, mostly with a strong design surface. I read those companies easily and I am therefore more confident about them than my track record justifies. The failure is not really about backing too many of them. What goes wrong is that I am less useful, and slower to admit I do not know, in the categories where my instinct still produces an opinion anyway.
You over-index on craft. An operator who ran design will discount a team whose product looks assembled from off-the-shelf components. Sometimes that is the right read and the interface is telling you what the founder thinks the hard part is. Sometimes the interface is ugly because they are shipping four times a week to customers who are paying, and the polish is the correct thing to defer. I have been wrong in this direction more than in any other, and it is the most expensive mistake available to someone with my background, because it disguises itself as taste.
You want to fix rather than fund. This one is almost physical. You sit with a team, you can see the four things you would do in their first month, and the urge to take the wheel is strong enough that it distorts the investment question into a different question, which is whether you would enjoy running this company. Those have very different answers and only one of them is your job.
The urge to take the wheel turns the investment question into a different one: whether you would enjoy running this company. Only one of those is your job.
What an investor can actually do
The standard list of what a seed investor adds is marketing, recruiting and mentorship. Having been on the receiving end of all three, I think the middle one carries most of the weight and the other two are frequently theater.
Marketing help at seed usually means an introduction to a journalist and a logo on a website (both real, neither decisive). Mentorship is real and is also what a founder's peers provide better, more honestly, and without a position in the company.
Recruiting is different, because the binding constraint at seed is rarely capital. What binds is that four people need to become nine without any of the five being a mistake, and a founder doing that for the first time has no network deep enough and no way to calibrate a senior candidate they have never managed the equivalent of.
The concrete version of this, which I ran for a year and would run again: keep a live list of strong operators who are between things. Not a database of everyone. Thirty or forty people you have actually worked with or reviewed, with a note on what each is good at, what environment they need, and what they are looking for next (the third one is the field everybody skips). Match it against the hiring plans of companies you are close to. The list decays in about six months, which is why almost nobody maintains one.
Two things make it work. The first is that your best former colleagues are the supply: the strongest people I ever managed left to start their own companies or to take a founding seat somewhere, and knowing where they are is an asset. The second is closing. An investor can make the final call to a candidate deciding between two offers, and say something a founder cannot say about their own company without it sounding like a pitch. That call is the single most valuable thing I have done for a portfolio company, and it takes twenty minutes.
I also ran small dinners for engineering, product and design leaders in a couple of European cities, invite-only, eight to twelve people, one guest worth showing up for. The stated purpose was community. What I actually got out of them was knowing who was good and who was moving, six months before either was public.
The honest summary
I do think operating gives you a reliable read on execution and an unreliable read on markets. It makes you good at the question of whether these people can build the thing, and no better than anyone else at whether the thing is worth building. The investors I have learned most from are the ones who know which half of that they are, and who bring in the other half rather than pretending to have it.
The version of this I would tell a founder: use your operator investor for the team, the hiring and the product decisions, and do not weight their market opinion above your own. They have seen four companies from the inside at close range. You are looking at yours every day.
I've founded three companies, led design and product at Honor, Lyft, Grammarly and Pitch, spent a year as an executive in residence at a seed fund in Amsterdam, and now run Noord, an early-stage fund and studio. No portfolio company or individual above is identifiable, deliberately. The counter-argument: the talent list and the dinners are also marketing for the fund, founders know it, and an investor who describes recruiting as their differentiated value is describing something almost every fund now claims. The test is whether anybody got hired.
© 2026 Renato Valdés-Olmos