The Mind of a VC: 10% lower working memory than average, 67% more risk taken

From the Prophecy Sciences blog:

Not-so-great memory— With so many things competing for our attention throughout the day, it’s a challenge for anyone to keep the important things in our working memory and the unimportant things out. VCs appear to have even more difficulty with this filtering, with our data showing a 10% deficit in working memory compared to everyone else.

Risk Seeking— Not everyone has an appetite for risk, preferring instead to go for small, safe wins. The VCs in our dataset had no trouble going for the big, uncertain gambles, making risky choices 67% more often than others we tested.

Prophecy Sciences is a YC company run by one of the smartest guys I knew at Stanford— he's a PhD/postdoc in Neuroscience and they're building technology for short sit-down cognitive tests that can tell a whole lot about people. It's already in use at hedge funds and professional sports teams to help build teams that work together better. 

Read the full study at Prophecy Sciences

3 responses
I find the notion that venture capitalists are "risk seeking" to be completely counter to the literature and my experience. VC's are interested in making investments in businesses that are already showing many signs of success/traction. They invest in things they know and care about. They invest in things that make sense for their capital and business interests. I don't think this is any more risk seeking as any other business investment given the parameters.
Not so great memory is probably a requirement thanks to the colossal failure most VC's deal with.
VC's are not as risk-taking as we may wish they would be. When compared to a typical business exec at an established business, we're still talking more risk at the end of the day. In any case, the above is from a quantified study of the behavior in cognitive tests, which seem to reflect more risk-taking behavior in the context of the test, not necessarily out there. Should they be more forward thinking and take more risk? Yes, probably. But there's a new guard that does, and thank goodness for that.