The Obvious and the Oblivious
Something obvious is easily understood or self-evident where oblivious is not being aware or concerned about what is happening around us.
The best entrepreneurs have to have a balance of both. They see the obvious when nobody else does but can be oblivious to everything else such as culture, valuation, people around their table and sometimes a clear path because isn’t the goal obvious to everyone else?
You have to wear certain rose-colored glasses to build a company from an idea. It’s part and parcel of an entrepreneur’s makeup. It shouldn’t be for investors.
Institutional investors have one job which is to return capital back to their LPs hopefully at a good multiple. How you do that is just not picking the right founder with a great idea but coming in with the right amount and the right valuation and figure out how to help grow the business with financial support, knowledge, experience and the right amount of tough love and of course portfolio management. Entrepreneurs want that from someone.
Too many investors and board members don’t do that. They come in at a high number then proceed to push the company to grow at a ridiculous rate with no real help on how to go about it. Help means working with the founder to execute and think and that means not telling them what to do. Companies’ valuations are so inflated that nobody understands how this will all end. My gut is not how they want it to end.
It is being oblivious to the obvious. Public markets, CAC, ROI, profit margins and more tell a story of what a company is worth. Somehow it seems like the last couple of years has become so inflated due to the market of oblivion.