Investing capital in early-stage companies is risky. There is so much that can go wrong in a company’s lifecycle that can make it a zero. The risks fall into several categories: execution, market, competitive, technology, and ad infinitum. As a starry-eyed founder whose job is to be visionary, it is difficult for them to stop and appreciate these death traps.
The founders that appreciate the risk hold a special place in my heart. I know they are thoughtful and strategic. That they do not act impulsively. Impulsive tactics often lead to unnecessary cash burn.
As a growth investor, I find it not unnecessary to compound my investment risk by buying into an operational plan in which I don’t feel comfortable. Moving into different markets when you do not own a particular segment is an excellent example. Finding founders aligned with this is hard to find, but it is absolute magic when you do.
