Morals vs Greed
We are all reading about bad behavior in the venture business this summer. It is not pretty. The data is right there about how it is more difficult for women founders sitting on the other side of the investor table. Many questions are posed that are inappropriate from “do you plan on having children” to questioning the ability to grow vs seeing the opportunity. As a founder, you want to push back and change the conversation but then you have to wonder if you really want those investors to put money in your business. It is a serious catch-22. I do believe it is getting better but we are certainly not where we should be.
Every day there are new businesses coming at investors. It is an incredible time and we will look back at this time in history as a time when new businesses changed everything for the next generation. I can point to Tesla, Cryptocurrencies, and even Justin’s Peanut Butter.
As an investor, I stick to one investment per vertical. I believe that if you bet on a space, you pick one company and get behind it. Otherwise, how can an investor be involved and know information around multiple companies in one vertical that are competing with each other? This defines one’s moral compass.
I have seen more than a few investors invest in more than a few companies in the same vertical even though they have told the founders of one that they wouldn’t do it and they did anyway. Early stage investing is such a risk as it is. Mitigating your risk by putting money into several companies in the same space competing against each other is about greed and once again spotlights that investors hold all the cards. Not ok.
Greed is unattractive. When you start to look at the investors for your company there are several factors to be looked at. You want an investor who gets your business, can provide intellectual value as well as financial value, you want to connect with them and more importantly, you want to trust them. Dig deep and see what their moral compass is before you take someone’s capital. As founders and investors, we all want to see success but I can not and will not be involved with someone who has lost their moral compass.