Consensus Came Too Early

On the quiet shift from independent judgment to social proof at the earliest stage

Early in my career in equity research, I remember building out a model on a REIT we covered. I had gone through the numbers, updated the assumptions, and recalculated FFO. It all tied out in a way that made sense to me. When I walked through it with my managing director, his first response wasn’t about the assumptions or the logic. He just said, “Before we publish, check consensus.”

I remember pausing on that. Not because I didn’t understand what he meant, but because I didn’t understand why it mattered. If we believed in our analysis, why did it matter whether we lined up with Citigroup or Goldman? Was the goal to be right, or was it to be close enough to everyone else that we wouldn’t stand out?

Over time, I understood the game. Public markets reward being directionally right, but they punish being wrong and alone. Consensus is a reference point. It helps anchor expectations. It protects you, in some ways, from being too early or too far off. There is a place for it.

But that place was never at the beginning.

What struck me this week is how much that same instinct has crept into the earliest stages of venture. Pre-seed, seed, and my beloved Series A used to be the part of the market where consensus didn’t matter much because there wasn’t enough information for it to matter. Someone met a founder, saw something others didn’t, and made a bet. It was closer to: we think this works, we’re going in, we’ll see what happens. That was the job.

The early stage was about being early and being right. Not perfectly right, but directionally right about a founder, a market, or a shift that hadn’t fully revealed itself yet. You were trying to see around the corner.

Now it feels like that sequence has flipped. Instead of conviction first and validation later, validation is driving conviction. Investors are circling deals because other investors are circling. Founders signaling who else is in as a primary input into the decision. Rounds that start to take shape only after a certain kind of social proof appears.

A strange version of game theory has taken hold. Not the kind where independent actors make decisions, and the market converges over time, but an inverted version where everyone is trying to anticipate everyone else and move together. The goal is not to be right, but to not be wrong alone.

That shift sounds small. I don’t think it is.

If the incentive at the earliest stage becomes “don’t be wrong,” the system starts to select for a different kind of founder. A different kind of company. A different kind of outcome. You get founders who are easier to explain, not necessarily more interesting. Companies that fit into existing narratives instead of stretching them. Rounds that fill up quickly because everyone is reacting to the same signal at the same time.

One example came up recently that stuck with me. A company gets one real term sheet, and suddenly there are more than twenty within two days. Not because twenty investors independently arrived at the same conclusion, but because the presence of that first signal changed how everyone else processed the opportunity.

That’s not conviction. That’s coordination.

And underneath it, there are other agendas running. Not just wanting to win, but wanting to say you saw it. Wanting to be associated with it if it works. Wanting to avoid the feeling of having passed. It pulls the decision away from the more honest question of whether you actually believe in the company.

When coordination shows up too early, it reduces exploration. Venture has always worked, at its best, by funding multiple paths at once. Different teams, different approaches, different assumptions about how a market might evolve. Most of those paths don’t work. A few do, and those few carry the outcomes. When consensus compresses those paths too early, we don’t just change who gets funded. We change what gets discovered.

There is also a structural problem that is hard to ignore. At pre-seed and seed, there is very little data to anchor to. For years, the conventional wisdom was that the founder and the team carried the vast majority of the decision at that stage. You were underwriting a person and a market direction. That is inherently a conviction-driven exercise. If that starts to drift toward 50/50 with what others think, you are introducing a proxy for validation into a moment that is supposed to precede it.

None of this is to say consensus is inherently bad. It has a role. As companies mature, as data accumulates, as financial performance becomes legible, it makes sense for the market to converge on a view. The issue is not that consensus exists. It is that it has moved upstream.

I still think about that moment in equity research. Checking consensus made sense there because the job was, in part, to understand how your view compared to the market’s expectations. But if that had been the starting point, if we had built the model by asking what everyone else thought first, the work would have been different. Safer. And less valuable.

Early stage was never about agreeing early. It was about disagreeing early and being right later.

There used to be a kind of purity to that. It was hard, uncertain, and often wrong, but it was honest. You were making a call based on what you saw, not what everyone else confirmed.

Early-stage venture is starting to feel like it is checking consensus before it has even built the model.

And if that becomes the norm, it is worth asking what kind of outcomes we are quietly optimizing for.

~earn