There is a specific kind of dread that hits GPs quietly, usually on a Monday morning. You see another portfolio, similar vintage, and a few of their companies just marked up 3x. Yours haven't moved yet.
The mental spiral starts fast. Did I pick wrong? Are they seeing something I'm not? Should I have been in that deal?
That's portfolio envy. And it's one of the more corrosive forces in early-stage investing, because it doesn't just sting in the moment. It quietly distorts how you pick next.
Here's the problem: markups at the seed stage are almost entirely noise. A Series A valuation is a signal about what one investor believed on one day, under competitive pressure, with limited information. It is not a verdict on the company. It is certainly not a verdict on you.
The data makes this uncomfortable to sit with. Horsley Bridge, a longtime LP across top VC funds, found that 6% of venture investments generated 60% of the asset class's returns over a 30-year window. More pointedly: the GPs running 3x+ funds logged more losses than GPs running 2-3x funds. The best pickers lose more, not less. Conviction and early validation are not the same thing.
This isn't to say markups are meaningless. A markup suggests a portfolio company may be on the right trajectory — a later-stage investor saw enough to write a check. But as 2021 proved, that signal is weak. Hundreds of companies marked up 5-10x at Series A are worth less than their seed price today. Treat it as one data point on that specific company, not validation of your thesis. And someone else's markups? They have no bearing on your portfolio or your capability as a GP.
Early-stage venture runs on a 10-year feedback loop. Interim markups are a construct for LP reporting, not for evaluating the quality of a decision. The picks that define funds tend to look uncertain for a long time. That's not a bug. That's what it means to see something before the market prices it.
Portfolio envy pulls GPs toward what the market has already blessed. If other smart investors are in, the logic goes, it must be right. That's not a picking process. That's social proof dressed up as conviction. Consensus deals might get early markups but they don't define funds.
Conviction in picking comes from process, not from watching someone else's portfolio. It comes from being honest about what you knew when you made the decision, what the thesis was, and whether it's still intact. If it is, markup timing is irrelevant. If it isn't, that's an investment decision to learn from, not a confidence crisis.
Portfolio envy doesn't make you a better picker. It's just a tax on your mind and your process.