Slater's Law

Rob Slater roping up at the Base of Fast Draw, Colorado National Monument

Rob Slater was one of the strongest and most versatile climbers of my generation. An expert at big wall, aid climbing, his first ascent in 1984 of El Capitan’s Wyoming Sheep Ranch remains one of the neckiest leads ever on the Big Stone. Rob also loved BASE jumping, successfully hucking himself off many of the formations he climbed.

Rob and I were at the University of Chicago at the same time and began climbing together in the late ’80s. He was busy then trading money funds for Goldman Sachs and I was busy building a venture capital business, but each year we found time to take a climbing trip to a place neither of us had been.

One fall weekend, we went to the Colorado National Monument to climb a couple of its beautiful desert towers. Rob was big on desert tower aid climbing in those days, and I was not, so we agreed to pick objectives that could be free climbed. One of those was a classic Layton Kor Route called Fast Draw: three pitches of hard crack climbing to the summit of the Sentinel Spire.

Rob and I climbed Fast Draw together in good style, and on the summit, I offered my hand to him in congratulations. He refused. “Wait till we get down,” he said.

We made two rappels back to the base of Sentinel Spire, and at the end of the last one, I again offered Rob a handshake. Again, he refused.

“The Tower’s not over until the ropes are on the ground,” he declared.

Ever since that trip, I’ve thought of this as Slater’s Law and I see entrepreneurs and venture capitalists publicly violate it every day. Blog posts humble-bragging about a round of financing that values a startup at a billion dollars or more, press releases touting a company’s filing of an IPO, young VCs raising a new fund on the strength of their awesome but entirely unrealized first portfolio — all of these violate Slater’s Law.

A venture-backed company is not a success until the return is fully realized by its shareholders through a sale or public offering.

An IPO is not a success until the underwriters sell shares to the public, the proceeds are in the bank, the investor lockups have ended, and there is a liquid market for these public shares at a price in excess of their offering value.

A venture fund is not a success until limited partners have received the realized proceeds from their fund managers at a multiple of their original investment, and the fund managers have cashed their carried interest checks.

The Tower’s not over until the ropes are on the ground.