Are you the ‘difficult’ investor?
I had a meeting cancelled this week because the entrepreneur said they’d been ‘summoned’ by one of their ‘more difficult investors’.
Summoned? One of their more difficult investors? That doesn’t sound good. I wondered if that was sometimes me, although I also wondered if ‘difficult’ meant pushy and expecting high standards, or meddling and a hindrance?
How can an angel investor know what a good angel investor is?
“Man muss immer umkehren”
Or, loosely translated from Carl Gustav Jacob Jacobi’s native German, “invert, always invert”.
Often the opposite is easier to think of. It forces us to form an opinion on both side of an argument, and that way we can be more sure about which side of the argument we fall on.
With that in mind, what could make you a terrible angel investor?
You lose all your money by backing the wrong team.
You waste an entrepreneur’s time by advising them to do things they shouldn’t.
You’re an obstacle to the company’s success by being slow and indecisive.
That was quite an easy list to come up with and I’m sure there are many more terrible investor traits you could add. So, after doing that list we now just do the opposite.
It sounds simple, right? And it is! All investors say they’re ‘value-add investors’ but are you really? I bet you’ve done some of those ‘terrible investor’ things. I’ll admit I have. Inverting isn’t a magic wand for all problems but it can certainly help you think about what might do harm.
Inversion also saves time — try it. It’s a bit of a hack as it’s easier coming up with the simple ways of, say, being a terrible investor rather than looking at brilliant investors and trying to think of different and new ways to be even more brilliant.
That’s not ‘difficult’ at all.
In other news
One of my investments, NoblyPOS, has been acquired by Revolut. Great work by George, Seb, Royce and the team.
You can read more here.
Important:
None of these posts are investment advice. If you are thinking about investing you should seek the advice of a suitably qualified independent advisor.
#CapitalAtRisk