Having started investing in startups in 2012, I've now done more than 50 direct investments, invested in a further 13 via a fund I cofounded, and have backed 14 more as an LP in Singapore VC firm, Investigate. Here's what I've noticed:
- The best founders are working on something they care about so deeply that they would do it even if they knew there would be no exit.
- Most founders have no chance of raising venture capital because the problems they're solving appear too small in scope. Those who succeed start small ("the thin end of the wedge") but show a path to big.
- Many founders get funded without the involvement of VCs because they can demonstrate to friends, angels and syndicates that they have unique insights, which make them the obvious person to solve a niche problem.
- Listening is one of the most undervalued activities in startups. The fastest way to fail is to build something without constant interaction with the people you expect to pay for it.
- Most startups fail not because they run out of money, but because the founders give up and/or fall out. Start a company with people you know well.
- Most founders do not make good CEOs. People who go from zero-to-one are often not well suited to management, implementing systems, and structure. I know a lot of successful founders who crave the old days of early-stage hustle.
- The best founders don't get overwhelmed. They have a natural ability to ignore everything except what is critical to create forward momentum. (As a shareholder this can be annoying, but it's way better than the alternative!)
- Defensive founders create problems for themselves but founders who bring their weaknesses front-and-centre earn support, trust and loyalty.
- One of the most frustrating traits in founders is overpromising and underdelivering. Having integrity means doing what you say you'll do when you say you'll do it.
- (Borrowing this one from Naval Ravikant)... Success won’t make you happy, healthy or loved. Being happy, healthy and loved 𝘪𝘴 success.
– Featured image by Javier García.