Baseball Umpiring and Early-Stage Investing

Introduction

We often talk about investing in unicorns as if we’re the ones hitting home runs, like batters swinging at the opportunities coming our way. But if you ask people like Sam Altman or Vinod Khosla, they’d say we investors might be giving ourselves too much credit, and likely more destroy more value than we can create for startups.

That’s probably an exaggeration, but there’s a point there. Investors aren’t typically the ones in the field running the company. Founders are the real batters—they’re the ones who can take a bad pitch and still knock it out of the park.

Perhaps a better description is to say that investors are more like umpires. We judge whether a ball thrown (the startup opportunity) at the batter (the founding team) is in the strikezone, and informing the players on the field whether a ball should be in play or not (through our investment).

So, taking inspiration from various articles on umpiring, how do umpires establish their strikezone, and how can we as investors learn from their techniques in our investing journey?

Keep your head still

Why do umpires do that?

One of the key principles in umpiring is keeping your head still while tracking the ball. If an umpire moves their head, it can lead to poor judgment calls because it disrupts visual consistency. By keeping their head still, umpires ensure they follow the ball accurately from the pitcher’s hand to the catcher’s mitt, allowing for a more precise call on each pitch.

How does it relate to early stage investing?

In angel investing, keeping a “still head” means maintaining a steady framework for evaluating investment opportunities. For us at The Healthcare Syndicate, this means following a consistent framework during due diligence. While the specific questions we ask may vary—much like an umpire’s eyes move to follow the pitch—we stick to a structure that guides our judgment and ensures we cover essential points in every deal memo.

See the Ball All the Way to the Catcher’s Mitt

Why do umpires do that?

Umpires are trained to watch the ball all the way into the catcher’s mitt before making a call. This approach prevents premature judgments and ensures they fully grasp what they’re seeing before deciding to call a strike or ball.

How does it relate to early stage investing?

As an investor, it’s crucial to see a deal through all its diligence phases before committing. Take the time to thoroughly evaluate a startup’s business opportunity, team, and market potential. Just like an umpire needs to see the entire pitch, you need to fully understand a deal before investing.

Pace Yourself

Why do umpires do that?

Umpires are trained to pause before making a call, giving themselves a moment to mentally review the pitch. This brief pause helps prevent rushed decisions and ensures accuracy. Good timing is crucial for maintaining consistency and confidence throughout the game.

How does it relate to early stage investing?

In investing, it’s important to avoid hasty decisions. Just as an umpire takes a moment to consider a pitch, investors should pause to fully assess a startup before committing. This pause allows for reflection and reduces impulsive decisions, leading to more thoughtful investments.

Always take a moment after you “see the ball all the way to the catcher’s mitt” to ensure your observations align with your conclusions. Even in surgeries, a timeout checklist is used before proceeding, significantly improving outcomes by reducing errors by up to 50%. Similarly, this approach in investing ensures you’re aligned with your insights before making a move.

Avoid Gross Misses by Calling Ball

Why do umpires do that?

In umpiring, when faced with borderline pitches, especially low or high, it’s often safer to call a ball rather than risk a gross miss by calling it a strike. The reasoning is that strikes are usually obvious—a clear pitch between the belt and two inches above the knee, touching the plate, is rarely missed. Conversely, borderline balls aren’t always as clear-cut. By erring on the side of calling a ball, umpires avoid the risk of making a glaring, game-disrupting mistake.

How does it relate to early stage investing?

In investing, when in doubt about a deal, it’s better to pass (call “ball”) than to take a chance on a shaky opportunity. Just as an umpire avoids controversy by being cautious with borderline pitches, an investor should avoid risky deals that aren’t clearly viable. This approach helps prevent significant losses and maintains your credibility as a disciplined, thoughtful investor.

Adjusting for the Level of the Game

Why do umpires do that?

Umpires must tailor their strike zone based on the age and skill level of the players. Younger, shorter players often require a slightly wider strike zone to match their physical stature and developing abilities. This adjustment helps ensure the game is fair and consistent for everyone involved, allowing players to grow into the game.

How does it relate to early stage investing?

Similarly, angel investors should adjust their approach based on the maturity of the startups they’re evaluating. For example, a pre-seed startup still in the product development phase likely won’t have a full fledged commercialization plan yet. Conversely, a Series A company working on the same exact vertical as the preseed startup should be expected to have a commercialization team ready to generate revenue, if not already executing a repeatable sales plan with clear revenue growth.

By aligning your investment strategy with the startup’s stage, you make decisions that are both appropriate and effective.

You Will Always Have a Weakness

Why do umpires do that?

As the article on umpiring points out, the widely accepted practice of observing pitches “in the slot” has a particular weakness with low-and-away pitches. Recognizing and accepting these limitations is crucial. Umpires adapt by positioning themselves better or leveraging their strengths, but they stay mindful of their weaknesses.

How does it relate to early stage investing?

Investors, like umpires, have blind spots—whether it’s overvaluing certain technologies or overlooking red flags in a founder’s pitch. The key is to acknowledge these weaknesses and either work on improving them or collaborate with others who can fill in the gaps. Accepting that you won’t always be perfect helps you make better, more informed decisions.

Conclusion

Investing, much like umpiring, requires a blend of discipline, self-awareness, and adaptability. As we've explored, the techniques umpires use to refine their judgment—keeping their heads still, adjusting for different scenarios, and pacing themselves—are directly applicable to how we approach early-stage investing. It’s not about getting every call right, but about making consistent, well-informed decisions that minimize mistakes and maximize potential. By borrowing from the umpire's playbook, we can become better investors and set ourselves up for long term investing success.

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