Venture capital vs roll of the dice

I recently travelled to San Francisco to meet with portfolio companies, founders, operators, and investors. SF is a wonderful place jam-packed with events, and I was fortunate enough to attend a Liar’s Dice tournament.

The Liars Dice event was organised by the team at Mason, a company automating real estate development and project management with AI, who regularly bring together people from across the SF tech community.

I’d previously known the game as Perudo - it’s essentially a dice betting game. Each player is given five dice, everyone rolls, and keeps their hand hidden. Ones are wild, and the goal is to bet on the total number of a given number across the table. You lose a dice if you either make too high a bet or call someone else’s bet incorrectly.

So, for example, with five players there are 25 dice in play. At the beginning of the game, with ones being wild, the strongest statistical likelihood for any given number between 2–6 is around eight. Everyone takes it in turns to place a bet, and whoever starts has a disproportionate advantage as they can set the tone for the round. Saying something like ten sixes at the beginning is already pushing the bounds of what feels realistic, and massively decreases the chances of the round comfortably coming back around to you.

Anyway, enough about the rules. It’s a great game and I’d recommend playing it, but what struck me most was how closely it mirrors venture capital.

Oftentimes, we each have a snapshot of the market. We build some level of insight, often with a thesis. Based on that, we choose the types of companies we want to invest in and place a bet on what we think is a probable outcome. If we see strong signals, we might feel emboldened to go big. The equivalent of rolling a strong hand and leaning into it.

But that initial bet doesn’t exist in isolation. It signals conviction to others around the table. And with each turn, that conviction compounds and what started as a relatively bold but grounded bet can quickly snowball as others build on top of it. This can lead to greater and greater bets, leaving people at risk of inflating reality and increasing the risk of the bubble bursting.

I saw this play out in real time. An opening bet of ten sixes quickly became fourteen sixes. With 25 dice on the table, this is a massively outsized outcome, but in the moment it doesn’t feel completely absurd because of how the momentum builds. People aren’t just reacting to the underlying probabilities, they’re reacting to each other.

How this tracks to venture:

• People make big bets with limited visibility

• Hype grows with each bet, especially when people believe each other’s conviction

• When it’s wrong, it feels obvious - the odds were never favourable

• When it’s right, it feels prophetic - but making the right call is very often a game of luck!

Obviously venture capital has many more nuances than this, but it was fun to see the parallels and how people stake their bets. Sometimes it pays to go big, especially when luck works in your favour.

Oh, and the call on 14 sixes… there were actually 15!