Below is the “Tip of the Week” transcript from the Podcast Episode 2: Venture Capital… Angels, Funds & Entrepreneurs (feat. Chris Yeh)
The tip for this episode is to have a strategy or a focus when it comes to startups that you invest in…
Whether that be geographic, an industry vertical, product vs. service-based businesses, software vs. hardware… whatever the case, having some background or domain expertise in a field, market or application should help tremendously when evaluating early-stage companies in that area.
Whether you’re 20 or 80 years old… we all have knowledge and experience in certain areas that should be leveraged.
That said, your focus doesn’t doesn’t have to be super narrow… to the level where you have one startup in 20 that you can even consider… but I’d also suggest it not be too broad… such as “we invest in tech.” If that’s the case you could make the argument that any starutp is in your area of expertise.
The advantage, of course, to having strategic focus, is that you’ll eliminate opportunities quickly…..
with the ones that are a fit… you’ll be able to evaluate them more quickly and more effectively,
and overall you should have greater confidence in your decisions.
And make sure to use your network of Subject Matter Experts. Recently I reviewed a very strong startup in the renewable energy trading space… and while I’ve had some exposure to the field, that is not square in my core… so I pulled in a buddy for some Q&A with the founder and was much better able to understand the industry dynamics and growth potential…
So, consider your experience and figure out those areas where you’re going to differentiate and have an advantage over other startup investors.