It's mainly an easy/polite way of saying no. If they knew it was going to be huge, all would have invested.

Sure, but the point is that as a startup I'd like to get a clear, unambiguous no when they're not going to invest, rather than a "yes, maybe, soon..."

This is probably the safest way to reject someone seeing that 4 of them used the exact same response as well as your music business investors. I hear this line all the time.

To be fair, I guess making huge returns is not their prime policy or maybe their investors have a policy against certain investments due to moral or some esoteric reasons.

The VCs we talked to weren't not rejecting us so they could save our feelings. They were doing it because we were offering them a free option on our business.

A common-enough rhetoric in discussion with folks from VCs does definitely seem to involve the 'areas they are currently interested in'. A sibling comment to mine bears this out slightly with the 'security is not our sweet spot' response.

You cite esoterica, but perhaps investors just feel more comfortable with certain areas - or ones they have the in-house experience to evaluate properly - or that are easier for junior partners to sell to the folks higher-up?

I don't know much about VC but I thought taking risks was the name of the game? Isn't that what "venture" in VC mean?

I'd understand if this was Ontario Teachers Pension Fund or something like that where a large amount of capital had to move around to generate some sizable returns. Even these money managers are scrutinized for bad decisions.

The whole 'not our area of focus' seems to be the same line mutual fund managers use during report card season by writing off bad picks and claiming they beat the market.

It's about taking educated risks to the best of their ability. Otherwise there are a lot of people selling bridges...

This advice comes straight from the oracle of Omaha himself, "Never invest in a business you can't understand."

I'm passing on rather than defending their behaviour.

Having said that, there's perhaps something to be said for picking one's battles?

Indiscriminately attempting to capitalise on any lucrative opportunity seems like a common road to ruin (feature creep, startups that put everything in scope, https://xkcd.com/793/).

While that makes sense for established markets like the stock market, I don't think the same can be applied to the early stage tech market or reading into fundamentals. Certainly trying to capture all opportunity in the stock market can lead to mediocrity (over diversification) but when one bet can produce returns that more than makes up for all the other tiny bets, hard to fathom why that isn't a much more attractive strategy.

For example, make 1% stake bets stretched across 100 startups vs 20% stake bets stretched across only 5 startups I "understand" or feel comfortable with. Isn't the risk inherently bigger if you chose the latter? If one of those 100 startups end up producing low to mid 5 digit ROI, shouldn't that cover for the 99 other bad bets? The probability increases since you are not introducing any personal biases and exposed to more upside potentials.

Last time I checked the name of the game was making more than 100 times the amount invested in less than 5 years - taking risks is a unavoidable side effect.

Sounds like the old searching for your keys under the street-lamp because that's where the light is.