What Lessons Can Be Learned from Passing On An Investment?
Missed investment opportunities can offer valuable lessons for both seasoned and novice investors. This article delves into real-world examples of passed-over investments, from AI health startups to self-storage tech innovations. Drawing on insights from industry experts, we explore the critical factors that led to these decisions and the potential implications for future investment strategies.
- Overlooked Potential in AI Health Startup
- Pivot Away from Asset-Backed Model Prompts Pass
- Missed Opportunity in Self-Storage Tech Innovation
Overlooked Potential in AI Health Startup
While I'm not a venture capitalist myself, working with dozens of startups at Spectup has exposed me to moments where investors grapple with decisions that haunt them later. One case stands out--it was during a pitch deck consulting session for a health-tech startup. They had an innovative concept integrating AI diagnostics and data-sharing platforms for small clinics, but the founder's presentation lacked polish, and the financials seemed overly ambitious. A VC we knew decided to pass, citing concerns over scalability and market readiness.
Fast forward eighteen months, that same startup landed a major partnership with a healthcare consortium, triggered exponential growth, and even went through a successful Series B. The VC told me in hindsight they wished they'd looked beyond the surface-level flaws and engaged deeper with the startup's vision, especially considering advancements in AI and healthcare.
For me, the lesson was clear: startups are often rough around the edges but their potential lies in their adaptability and vision, a principle that strongly shapes Spectup's approach to preparing founders for investor meetings. Sometimes, an idea isn't fully baked yet--but if the core is strong and the founder can evolve, it's worth taking a second, more deliberate look.
Pivot Away from Asset-Backed Model Prompts Pass
One experience that stands out was with a startup called "Here." Initially, the business model focused on acquiring physical real estate, offering fractional vacation rental investments. This aligned perfectly with my investment thesis, as it combined tangible assets with a scalable and innovative approach to real estate investing.
However, out of nowhere, the company pivoted to a completely different model, shifting its focus to building a newsletter business. While newsletters can be valuable, this drastic change moved them away from the original asset-backed approach I found compelling. The new direction lacked alignment with my investment criteria, as it no longer leveraged the unique competitive advantages that initially attracted me to the opportunity.
After careful consideration, I decided to refrain from further investment. This experience reinforced the importance of staying true to my investment strategy and thoroughly evaluating whether a pivot still fits my long-term vision and goals as an investor.
Missed Opportunity in Self-Storage Tech Innovation
While I'm not a venture capitalist, owning and operating a self-storage facility like Herron Hill Storage in Nescopeck does involve making calculated investment decisions--especially when it comes to adding new services, technology, or facility features. One moment that stands out is when we were presented with the opportunity to partner with a local startup offering contactless move-in and smart lock technology. At the time, we hesitated. It felt like a high upfront cost, and we weren't sure if our customer base would immediately adopt those tools in our semi-rural market.
We passed on it, deciding instead to stick with more traditional keypad access and in-person move-in protocols. Fast forward about a year, and contactless services exploded in popularity--especially as more people sought no-contact solutions during the pandemic and beyond. That same startup we passed on now partners with facilities across the state and has helped others boost occupancy by offering a more modern rental experience.
The lesson I took from that was not to underestimate how fast customer expectations can evolve, even in a market like self-storage, which some consider more "old school." Self-storage users--whether they're a homeowner cleaning out the garage, a contractor storing tools, or a family downsizing--now expect convenience, speed, and flexibility. Being open to new technology and having the willingness to test and adapt is essential if you want to stay ahead and continue delivering a top-tier customer experience. It's a reminder that passing on innovation can sometimes mean missing out on long-term growth.
