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Lessons on entrepreneurship learned from both sides
I spent 11 years as a venture capitalist. Before that I was a serial
entrepreneur. Now I’m back to being an entrepreneur with Vringo, so
I’ve seen starting new companies from both sides. I find being an
entrepreneur more satisfying. I love spectator sports, but in certain
things I like to play the game more than I like to watch.
I’ve learned from seeing mistakes from both sides and what I like to do
at this point in my life is offer startup entrepreneurs advice on how
to avoid the mistakes that can derail their businesses. If I could
offer some advice, it would be these points:
1) Choose your funding partners carefully.
One thing people starting new businesses don’t do enough of is due
diligence on their investors. Investors are doing due diligence on
every aspect of would-be entrepreneurs, all the way to including who
their kindergarten teacher was and how do they contact her. Investors
are for life; it’s like getting married. So entrepreneurs need to
thoroughly check out their investors’ track records. It should be a
fully symmetrical, two-way process, not one-sided. Investors can make
your business pleasurable or painful.
2) Make sure you get a strong board of directors to help you.
Most people who are starting new businesses underestimate the
importance of the board of directors, in some cases regarding them as
little more than window dressing. But the board of directors has an
absolutely critical role to play in charting your business strategy,
opening doors for you and providing high-level introductions.
Finalizing your strategy is crucial. And it’s equally important that
you get a chairman of the board of directors who is constantly testing
you with the reality of the outside world. Everyone needs a devil’s
advocate, a system of checks and balances. Your board should be a
combination of people who have sat on both sides of the entrepreneur –
VC table; their critiques and support will prove to extremely useful...
continue...
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