The Do’s and Don’t’s of Venture Investing

When I first started investing, I got a lot of advice. Most people had the same thoughts on what to look for – the “Do’s” of venture investing. None of these were surprising and remain the case today. Do:

  • work with great founders;
  • look for big markets;
  • yada yada

And many gave me advice about what not to do – the “Don’t’s.” Here are some the “Don’t’s” that I’ve heard along the way. Don’t:

  • invest in married founders;
  • invest in single founders (i.e., no second founder);
  • invest in non-technical founders;
  • invest in founders that you can’t drive to;
  • invest in a company where the person who came up with the idea is not the person who executes on the idea;
  • invest in music startups;
  • invest in hardware.

I learned the hard way that there are no “Don’t’s” in venture investing. If you take this advice literally and categorically, you can miss on the companies that really matter. These categorical “don’t’s” are a statement of calculus and not probability, as Peter Thiel would say. And venture capital is an exercise in applied probability, not calculus. I’ve learned the hard way that each startup is situational and you need to block out your pre-conceived prejudices and biases to listen to each founder’s story.