What Investors Don't Know

Investors are human too.

What do I mean?

Just like founders, we don't know what we don't know.

I was at an investor conference last night.

It was good to catch up with buddies and see what they are excited to be invested in.

Inevitably, the conversation turns to fundraising,

Whether they are raising for another fund, helping a founder find additional investors or a family office raising for a follow on investment.

Two conversations struck me as interesting.

The first one told me how narrow her investing thesis was.

She explained how he could not find any founders he thought "got it".

She went on to say that many of the founders he got were not coachable.

We all know how I look for coachable founders.

But that doesn't mean I dont see and attract them often. I do.

All the time.

As the conversation went on I began to wonder if the investor,

(Who moves big money by the way)

Was in fact, coachable themselves.

So like I do, I pushed back.

"Why don't you found the company yourself" I said with a wry smile.

"Well, I can't scale myself. And I am better at running funds and investing."

Exactly. You better go find yourself the right founders then ;)

The next conversation was with an old friend who has continued to thrive as an investor and big name in cutting edge tech.

Think near a billion in investment returns and several healthy exits.

As we spoke, I could tell very quickly that his understanding of capital types that frequently get "stacked" into startups was quite rudimentary and frankly, lacking.

To them, all capital into venture came from family/friends, angels and VC's.

Those of you attending our fundraising fluency and Pitch Kung Fu weekly online sessions know that this only accounts for 3% of the capital available for venture.

I don't blame investors for not knowing, since this knowledge is not as widespread as one would think.

It took me researching the friction in raising and building a funding platform to automate fundraising platform to become obsessed with tracking down all the capital flowing towards venture.

When an investor is unaware of the patterns and directions capital can flow from, it makes it hard for them to guide a given invested in founder in their fundraising efforts.

As an investor, we can just be "dumb" money and simply invest our capital, or we can understand that perhaps we need to understand fundraising better than our founders since it will be most likely most significant challenge shared across all founders.

I did not correct this investor because I could tell their mind was set and made up on this topic.

But this doesn't change that they are "skipping" several trillion, yes, trillion with a T, in capital out there available for venture.

Investors.

Be better.

Be smarter.

Remember, we are still students.

We must be just as entrepreneurial in our investing endeavors as founders are in building themselves and their companies.

We are not exempt from the same learning and leveling up that we expect from founders.

If we don't know the options, how can we see trends, and find the best founders or guide them to massive wins?

Our edge as investors is counting on it.

See you out there, investors.

Founders are counting on you just like we are counting on them.

#investors #investing #venturepcapital #capitalraising #fundraising