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A Field of Dreams Where Slugging Percentage Matters Most

Len Batterson, January 11, 2021

The key to venture capital investment success is slugging percentage. Doubles and triples are good, but home runs are what really count.

By Len Batterson
VCapital Founder, CEO, Chief Investment Officer

As a kid I loved baseball.  My favorite team was the St. Louis Cardinals. My favorite player was the Cardinal’s star, Stan “The Man” Musial.  

Musial was one of the greatest hitters ever to play the game, ending his career with: 

  • Over 3,000 hits, one of only 32 players in all of major league history to reach that mark
  • A .331 batting average, 18 points better than any of today’s active players
  • 475 home runs, #32 on the all-time list 
  • 1,951 RBIs, #8 on the all-time list
  • Fewer than 35 strikeouts/year over his 20+ year career, a record unheard of among today’s sluggers

Perhaps his most important statistic, though, and the one arguably contributing the greatest impact to his team’s success over his career, was his slugging percentage, at .559, which was and remains one of the best of all time.  According to, a percentage of .550 or above is outstanding.

Slugging percentage in baseball is of critical importance to winning games. It is a measure of a player’s batting productivity, representing the total number of bases a player records through hits per at-bat. In other words, a single equals one base, a double two, a triple three, and a home run four. As Bill James points out in his monumental book, The Bill James Historical Baseball Abstract, it is runs scored that win games, and high slugging percentage is the key to generating runs.

The high risk/high reward nature of venture capital investing is very similar to baseball. On average only 15-20% of all venture capital deals make money. In baseball parlance, that would be a batting average of .150-.200. In contemporary Major League Baseball, the average batting average is just modestly higher at about .250. The key to venture capital investment success is slugging percentage. Doubles and triples are good, but home runs are what really count. 

There are, of course, some differences between venture capital investing and baseball to keep in mind. In venture capital investing, there are no called strikes, no penalty for not swinging at a pitch, even if that pitch is in the strike zone.  If the investor doesn’t swing, there is no money lost. In fact, swinging even at really attractive pitches often results in just foul balls.  

Of course, you can’t generate runs without some big hits, and you can’t get hits without swinging. But seasoned venture capital investors know that good pitches will keep coming along. 

Raw, inexperienced baseball prospects may see every pitch as a menacing fast ball that could bean them. By the time they make it to the major leagues, if they are fortunate enough to reach that level, they need to have overcome FBB (Fear of Being Beaned). But many do still have FOMO (Fear of Missing Out), rather than having yet learned the discipline of “waiting for their pitch.”  With not that many pitches per at bat and most pitchers very good at precise spot pitching, young hitters often fear letting a good pitch go by.  

The same reactive instincts are applicable in the education and maturation of the venture capital investor. Those really new to the pursuit may be afraid to stay in the batter’s box and swing, seeing every pitch as a menacing fast ball that could bean them. With some initial successes, a still not-yet-seasoned venture capital investor likely will have overcome FBB but still have FOMO. 

It generally requires considerable experience and learned instinct for the venture capital investor to learn to overcome FOMO and not fear letting a good pitch go by, knowing you’ll get many chances for a good pitch.  This is particularly important since even a good pitch has only about a 15% chance of being well hit for a double, triple, or home run investment exit.  

A top quartile venture capitalist must hit at least a couple of home runs out of every ten to twelve investments.  The VC who hits two out of ten investments as home runs is a superstar with an outstanding slugging percentage, like my idol Stan Musial, even though unlike Musial, his overall batting average may be no better than .200.

Over the past almost forty years of venture capital investing, my teams have achieved about a 28% annual return on investment with 38% of all investments making any positive return. While we’re proud of the high batting average (even better than Musial’s!), the strong average returns – our slugging percentage – have been achieved by hitting a number of major home runs.  

While broad markets may have both good times and bad times, in venture capital investing, your sweet pitches may come at any time.  The key to successful venture capital investing is to wait for your pitches – the ones coming across the middle of the plate in your power zone – and to keep swinging for the fences on those pitches. Batter up!

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