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How I Invest · 5 min · Oct 28, 2026
A manager's response to a mistake can end an LP relationship
Gavin Ezekowitz says an investment error was tolerable, but the manager's failure to disclose and own it ended their relationship.
In this episode
Full analysis- 9:07Underwrite the team and milestones, not a distant market forecast6 min
- 29:19Venture returns require convexity, pacing and position sizingPro pick 6 min
- 48:09Avoid letting macro timing override your investment mandatePro pick 5 min
- 1:49Early AI markets can produce more than one leading company5 min
- 26:59SpaceX's compute buildout shows the value of anticipating shortages3 min
- 37:28Small funds can turn a focused founder network into an edge5 min
- 43:18Small initial stakes can dilute a fund's biggest winner3 min
- 1:06:49A manager's response to a mistake can end an LP relationship5 min
“when you are candid about those things, and then when you are clear about what actions you've taken”
Takeaways
- An investment can fail without ending an LP relationship.
- Hiding or minimizing a mistake can destroy trust.
- Investors expect managers to explain how they will respond.
About this segment
Gavin Ezekowitz says an investment error was tolerable, but the manager's failure to disclose and own it ended their relationship. He sees candor and a clear remediation plan as essential to fiduciary trust.
Gavin Ezekowitz is co-founder and chief investment officer of BFA Global Investors.
Built a career across capital markets and investment banking, then became a venture and growth investor.
David Weisburd, Host
From “Gavin Ezekowitz on AI Valuations, Asymmetric Returns, and Why Great Investors Fail”, Oct 28, 2026. Watch the full episode
Thanks. We'll look at and fix what's off.
Transcript
From the transcript How I Invest publishes with the episode.
- 1:07:02
Any investor who does a call with us, and not all of them ask, but anyone who asks, Can you give me your worst decisions, worst fund, worst company, learnings, observations? I will give them a thorough run through. I'll be honest with you, there are many things in there that I would say are not like a shines some beautiful, and it's not sort of recasting it as... That it's all wonderful characteristics, sort of slightly misaligned.
- 1:07:36
About you be... Having no career, life balance, and overworking seventy hours a week. There there are some genuine mistakes. You know, there are genuine mistakes. Absolutely. When I sat down with Jonathan Gray, president of Blackstone, I asked him, how do you manage LP relationships in a downturn? Mhmm. And he said, he goes on a plane, and he went out. And specifically, I asked him on 2008, how did he manage that?
- 1:07:58
And he said, got on a plane, and he went and met with every major LP in person. And his peers were sitting and hiding behind their desk, and he went and did the thing. And in retrospect, it's obvious. That was the hard thing. That was the, quote, unquote, right thing. That was extremely painful and probably painful for at least a year. Just brutal. It's just like going going, visiting someone, getting yelled at, going...
- 1:08:21
Jumping back, staying at staying at a hotel. I'm sure his hotel was fine even then. Waking up in the morning, flying to the next place, getting yelled at, and doing this over and over and over and over and over again. And that is what it takes to build an org... Excellent organization. And the truth truth of the matter is most people just don't have that level of discipline, that level of conviction.
- 1:08:41
They don't take their business to that level of seriousness in order to execute. It goes back to something that we talked about earlier, which is integrity and and taking seriously being a fiduciary. People have entrusted you with their capital. And while no one's expecting perfection, they're expecting candor. They deserve it. And I think when you've made a mistake or we've made a mistake, you've got to own it.
- 1:09:13
You you know, and it's just it's the human thing to blame someone or blame the market or whatever it may be. But but we make mistakes. We we miss things. We... No organization, no individual that doesn't. But but I think you win you win trust when you are candid about those things, and then when you are clear about what actions you've taken and and what you're going to do to make it right. If you don't come into the business that way, I'm not sure how you're going to handle what is inevitably going to be some pretty rocky spots.
- 1:09:57
And I would say that my worst investment outcomes and situations have come out of a manager making a mistake. It was a genuine mistake, not only up to the mistake. I discovered the mistake sometime later, but they'd made a genuine mistake. Never really owned up to it. And it was the end of that relationship. It was... I mean, the mistake was what it was. Right? They had conviction, and they did a thing, and thing didn't work.
- 1:10:32
I mean, okay. That's part of life. But even at the time when it clearly didn't work, they weren't clear saying, look, here are the three things we really just missed. We just got it wrong. And we're gonna have to figure out how to, you know, go from here. But this was not... This was on us. Right? We we gotta own some of that. And and I think if you can't do that with me in that situation, I look down through the rest of the portfolio, and I look out over time, and I say, you know, life's too short.
- 1:11:11
Don't don't need don't need to be Don't need to be wondering about that.