E312: The Power Law of Reputation in Venture Capital

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Feb 25, 2026

David Hornik, founder of Lobby Capital and veteran VC with 25+ years, prioritizes ethics and reputation in investing. He discusses why backing unflinchingly ethical founders matters. He explains power-law outcomes, how a few winners define careers, and why reputation and relationships compound over time. He also covers the role of emotional intelligence, selective giving, and rigorous founder diligence.

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ANECDOTE

Splunk Took 11 Years But Paid Off Massively

Splunk took 11 years from Hornik's first investment to IPO and made his firm hundreds of millions.
In year seven he doubted his skill, but the eventual public exit validated long patience and produced a Midas-list result.

INSIGHT

Big Public Multiples Often Defy Fundamentals

Public market valuations are often irrational but reflect concentrated expectations.
Hornik questions trillion-dollar multiples for companies without commensurate profits, calling markets not rational yet acknowledging outsized outcomes matter.

INSIGHT

Niceness Compounds Into Competitive Advantage

Nice behavior compounds into long-term advantage even if it seems disadvantageous short term.
Hornik wrote 'Nice Guys Finish First...eventually' arguing trust multiplies across repeated interactions and referrals.

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Can ethics, generosity, and long-term relationships really outperform aggression in venture capital? David Weisburd speaks with David Hornik about why “nice guys finish first… eventually,” how power-law outcomes shape a venture career, and why reputation compounds more reliably than tactics. Hornik explains why backing unflinchingly ethical founders isn’t just moral—it’s a durable competitive advantage in an industry defined by uncertainty.

Highlights:

Why Hornik only backs founders who are “unflinchingly ethical”
Ethics vs. culture: where pushing hard crosses the line
Why venture capital is a business of disappointment—and patience
How one out of ten investments defines an entire career
The human cost of startup failure and why it never gets easier
Why power laws make venture outcomes feel irrational
Compounding reputation as the most valuable long-term asset
The “transitive property of reputation” in deal sourcing
Why founders should diligence investors as hard as VCs diligence founders
Giving vs. taking—and why pure givers still need boundaries
Media, conferences, and platforms as multiplicative ways to add value
EQ vs. IQ: why emotional intelligence matters more than raw intelligence
Why Hornik won’t invest without sharing a meal with founders

Guest Bio:

David Hornik is the Founder of Lobby Capital and a veteran venture capitalist with over 25 years of experience investing from seed to pre-IPO. He previously spent two decades at August Capital and was the first institutional investor in companies including Splunk. David is known for his emphasis on ethics, reputation, and long-term relationship-building as core drivers of venture success.

Our Podcast now receives more than 300,000 downloads a month. Are you interested in sponsoring an episode? Please email David Weisburd at david@weisburdcapital.com.

We’d like to thank AlphaSense for sponsoring this episode!

Sponsor:

AlphaSense is the AI-powered market intelligence platform trusted by 85% of the S&P 100, helping investment professionals make faster, more confident, data-driven decisions. Built for hedge funds, asset allocators, private venture capital firms, and investment bankers, AlphaSense uses advanced AI and powerful search across premium proprietary content to surface the insights that matter most—before the market moves. Elevate your research and stay ahead of the competition. Visit https://www.alpha-sense.com/howiinvest/ to learn more.

Stay Connected with David Weisburd:

X/Twitter: @dweisburd LinkedIn: https://www.linkedin.com/in/dweisburd/ Weisburd Capital: https://www.weisburdcapital.com/

Stay Connected with David Hornik

LinkedIn:https://www.linkedin.com/in/davidhornik/

Questions or topics you want us to discuss on How I Invest? Email us at david@weisburdcapital.com.

Disclaimer:

This podcast is for informational purposes only and does not constitute investment, financial, legal, or tax advice. Nothing in this episode should be interpreted as an offer to buy or sell any securities or to participate in any investment strategy. All opinions expressed by the host and guests are their own and do not represent the views of Weisburd Capital. Participants may hold positions or have financial interests in the companies, funds, or investments discussed. Any references to specific investments are for illustrative purposes only. Investing involves risk, including the potential loss of capital. Past performance is not indicative of future results, and any forward-looking statements are subject to risks and uncertainties. Any third-party data or opinions have not been independently verified. Listeners should conduct their own research and consult their own advisors before making any investment decisions.

(0:00) Introduction (1:18) Work-life balance in venture capital (3:31) Investment disappointments and startup failures (7:14) Power law outcomes and investment concentration (10:37) Compounding reputation and career effects (15:00) Long-term relationships and winning deals (19:07) Diligence and investment strategy contrasts (22:07) Role of luck and insights from Adam Grant (28:12) Building a network and leveraging media (30:27) Balancing IQ and EQ in startups (34:28) Advice and validation of relationship-based strategies (37:21) Understanding entrepreneurs and authenticity (38:41) Closing remarks