Early Stage Venture Investing…How To's and How Not's

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  • on November 30th, 2007

I have been addicted to early stage investing and entrepreneurship since my late teens.

I have kissed many frogs. I have started to get better – mostly in the last 7 years and as my SOCIAL network expands, exponentially in the last few years.

The guys in my Venture Dudes blogroll have taught me much in the last few years and losing money has taught me the rest.

I am not insane, therefore I try not to make the same mistakes over and over. Failure has it’s tiny, itsy, long-term upside if you analyze the reasons for it and focus on doing things better the next time.

When I was doing my graduate business degrees, I could never attend classes that were textbook only or led by textbook professors. I wanted classes led by Rodney Dangerfield type ‘Back to School’ professors that would tell me about ‘Paying Off the Teamsters’ and real life drama.

It is interesting though that the term ‘WIDGETS’ used in every textbook as THE PRODUCT when using case study examples, has become the buzzword ‘burgeoning ?’ industry on the web. I guess that’s why ‘WIDGETS’ as a venture backed theme is ultimately doomed – but I digress.

Venture Investing for Dummies does not exist, but the blogosphere definitely can get you going in the right direction…fast.

Here are three great posts from Fred Wilson of Union Square Ventures on some do’s and don’ts from all sides of the equation:

Why Early Stage Venture Investments Fail

Failure Rates in Early Stage Venture Deals

AND for investors – Why Past performance is a GOOD Predictor of Future Returns in The Venture Capital Asset Class

All great stuff for beginners and veterans to review.

In the end, you need to know yourself and be honest with yourself with respect to your abilities.

You need to be great at backing the right leaders because good ones can save crap models and bad ones can wreck good models and ALWAYS be worried about valuation (something I never care about in stock trend following). Always.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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