“Play long-term games with long-term people…. this is an insight into what makes Silicon Valley work, and what makes high trust societies work. Essentially, all the benefits in life come from compound interests. Whether it’s in relationships, or making money, or in learning” Naval Ravikant
The best investors make big bets on the right people, the Stars Founders as I call them. Combine those people with the right startups, the Star (or Potential Star) Businesses, and that’s where the greatest returns will come from.
But most investors do not back the best founders. Most investors, especially at the seed stage, don’t know what to look for or how to properly evaluate founders. And much of the time investors are therefore forced to make their investment decision on the spot or lose out. This is the short-term game: they ‘spray & pray’, accepting (because everyone else does) that most will fail and hoping that one investment might just outperform all the failures.
Throughout the history of VC, however, the best VCs have played long-term games with long-term people. They get to know lots of founders and then they invest when the time is right. Jason Calacanis, Chris Sacca and Ron Conway have all done this, especially at the beginning of their investing careers. What is the common thread? They consistently build relationships and lasting trust long before any investment conversations take place.
Eventually everyone will show you who they are; you just have to wait. Over the last decade I have been consistently observing the quiddity of people at meals with 9others. By creating and being embedded in the networks where entrepreneurs come from since 2010 I am constantly on the lookout for Star Founders running Star Businesses. That works for me but won’t work for you so you need to carve out your own method or join forces if you can create a true win-win for the long-term.
You can read more on Star Founders here.
In other news
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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.
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