I had no idea what to do when I first decided that I wanted to invest in Entrepreneurship and Startups. It all looked so crazy and uncertain to me, however I had a background in Software Engineering and Management Consulting thanks to my 7 year education in Ernst & Young and Capgemini. I searched all over the internet and read all the books that I could get my hands on to learn about Venture Investing, I have written about what Fred Wilson wrote to me when I asked him what advice he would give to a new Venture Investor… it was quite simple, he said “Hold onto your money, it always takes longer and more money!” I took that advice to heart. It is rather futile to go into Venture Investing if one does not take the time to learn the sequence, apply strategies, tinker/pivot and skill required to be an venture investor. As an Entrepreneur it is also very important to take the time to understand the total capital need to build a sustainable business. I meet so many entrepreneurs who don’t take the time to really understand the actual capital need to build businesses. Even worse are those investors who are doing this for the first time but are totally unaware of the total capital need. They jump in with some money and then decide we will figure it out along the way, not a good idea. I have noticed experienced investors know how long it takes a startup in the B2C or B2B or any other service sector to get to scale. Me and my partners got lucky with CLARA, but we knew the business we were investing in. I cannot say the same to a number of other investors. I wrote a blog post titled “Organic Growth vs Get Big Fast” on a talk that Joel Spolsky did on Y Combinator Startup School. Knowing the total capital need and the strategy to acquire it is paramount. Not knowing will push you to the poor house very quickly. There is a difference between knowing the path and walking the path… it is the difference between knowledge and wisdom.
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