Timing the fundraise: don't show your cards early. Wisdom gained from struggles. Personalized learning is the future.

Portfolio Update:

I am now up to 33 investments with at least 1 and possibly 2 more pending.??I am eager to do more.?This week I have two messages for entrepreneurs- one is about fundraising and not showing your cards too early.?The other is about not being afraid of talking about failures or struggles.??This is a great time to invest and support great entrepreneurs.?People have their heads down building companies.?In many ways it's more exciting than the froth of 2020-2021.??

Also, I am excited to announce?a "special project" at Divergent Investments:?The Neuroschool network website.?We have been doing this on the side, but its now up and running.?My hope is that it becomes a hub for parents in need of information or camaraderie?with other parents of neurodiverse kids.?We also want to grow the database of schools, information?on services?and camps, parent community and programs like ESA that could lead to funding opportunities.?Check out the initial?site below and please create a free account:??https://www.neuroschoolnetwork.com

Entrepreneur?Corner 1)?Don't show your cards until your ready

I had 4 conversations this week with Divergent companies about timing of the next round and pre-emptive interest or whether/when to initiate?discussions.??It is natural that this would be on your mind.?And given the market?condition, you will get many opinions.??

Here are a few rules of thumb to follow:

1) Generally speaking, in a bad market (or really any market), you want to give yourself at least 6 months to raise capital if you are hitting goals and milestones.?Some people would say 12 months.?So you would start a fundraise?roughly 12 months before you need the capital.? If you aren't hitting goals, don't fundraise.

2) As for readiness, it is all about key milestones and having met them.?Have you hit the metrics and organizational infrastructure you need to get to the next stage of your plan in a credible manner??Often, these are perceived or presented as revenue goals, but there are actually many others. I like to focus more on margin economics, team building and product/technology or service readiness.?

3) Don't show your cards until you are ready.??There are any number of investors who will waste your time and they will express interest to get access to your data. Whatever you show them goes into a database somewhere and will be a reference for your next discussion.??

Thus, if in your haste, you don't put your best foot forward, you will regret it later.?Remember most investors have nothing but time on their hands.?As busy as a VC schedule may seem to you, they have plenty of time to talk to you between rounds and those approaches about?how great you are and wanting to take an early?look is BS for let me get a peek under the?covers with no risk or pressure.?It is a one sided conversation.?For many firms they even have people where it is their primary job.?Go talk to people when your ready, when you are proud of your results and you can put your best foot forward.?Without that 6 months or 12 months really won't matter much.??

Entrepreneurs Corner 2):??Failures and struggles build wisdom and in real time.?But you need someone to talk to.?

When something isn't going quite as planned, or you are unsure of what to do in a given situation, do you have someone you can call??Often this call is not instinctively?made to your investors or board members.?That is understandable given your relationships with them may be complicated by other factors.? It is very important you do have someone you can be real with.?Often that is someone who has experience and has seen a lot of things you are contending with before.??I certainly try to play this role for my founders.?I often wonder if people are comfortable sharing and I hope they are.??

My knowledge of business and any retained wisdom I have is directly the result of failures, bad decisions and the pre and post-scripts to those events.??But learning from those and gaining wisdom was the result of not just the event itself but the reflections on it and the discussions I had with people during and after.?I have always had many people I can rely on for advice.?I strongly suggest you do the same.?Wisdom is gained from failures and tough situations but only if they are shared and dealt with.

Parents Corner:?The power of personalized learning and playing to strengths and listening to what the kids want

I have become a huge advocate of personalized education.?Our school system today forces conformity and wants standard outcomes.??Yet each child is unique.??I strongly recommend personalizing your childs education in any way you can.?If money allows, go private and if your public school is great or money is tight, supplement.?The one key I have found is using the kids interest to encourage learning.?In general the school system emphasized standard learning, based on core concepts.?Some of these are in fact essential such as reading, writing and math.??But as an example I feel the school system really minimizes the importance of history and arts and even physical education.?I would even argue the don't do enough science.?When you grow up I could argue physical education is one of the most essential components of leading a healthy life.?For our kids we do a combination of enrichment and educational therapy to ensure academic rigor but then also try to buy books or customize to what the kids like. My older son likes history and my younger son seems to like science.??Bottom line, the goal as a parent should be to cultivate intellectual curiosity and lifelong growth and learning.?Imputing our own wishes is the wrong approach.