In conversations with friends in the community over the last 4-6 weeks, the same questions seem to come up, so I thought maybe I should just blog a quick “FAQ” in case many more people are also interested in the same topics — alert, this is all highly subjective, and usually what I relay to others in person, so I’ve just written it down here — much of it could be wrong or misguided. Fair warning:
“How should I think about investing in startups?”
Many people have fallen into liquidity over the past few years. Now, what to do with is? I’ve been approached by tons of friends, peers, etc about this. Here’s my general response, then followed up by something specific I believe in: Talk to friends first who have experience with wealth management. At some point, you may elect to put aside a small percentage for investing in startups. Think about whether you’d like to do that directly or through another fund. It’s really hard to know what investor or what fund is going to catch the best investments. The past is not necessarily indicative of how the future will shake out (with respect to funds), yet in most funds who are fortunate enough to return funds, there’s usually one investment as an outlier which drives all the returns. There’s a lot of randomness and luck and I’m not sure how safe investing in this category is, so just do so if/when you’re ready to roll the dice. (For those who want to start funds, just be prepared for a lot of legal stuff and accounting stuff, and usually those things are uneconomical (ie foolish) when dealing with a small fund. However, raising a bigger fund is not easy, either, and requires some kind of track record.)
“How should I get started writing, blogging?”
It depends on whether you’re (a) actively trying to build an audience or (b) writing for yourself first and sharing it with the world. Most people, when asked, will say (b) but when you dig into it, they really mean (a). So, the first step is to be honest with the pursuit. There’s nothing wrong with (a). If you’re trying to build an audience in technology and startups, get onto Twitter and Medium and keep it short, precise, different, and smart. Easier said than done. If you’re more motivated by (b), then just start writing about things that you care about and sharing it (briefly) with the world. Keep pieces short, unless you want to go deep. Assume people have short attention spans. If you look at the best, most-read people in tech and investing blogging today — Fred Wilson, Om Malik, MG Siegler, Chris Dixon, Marc Andreessen, and Mark Suster — the one thing they all have in common is: They’ve been writing forever, constantly, never stopping. It’s more like a disease or habit than something one just does.
“How does one crack into venture?”
I laugh a bit here because I don’t consider myself having cracked into the industry. I usually point people to this short video discussion I had with David Hornik, it’s a 5-min clip that’s worth watching. To paraphrase him, he said the best way to get into venture is to pick something else you’re interested in and do that (and be great at it), and then maybe some day you’ll crack in. A mistake I made was to try to go in directly, way before I was ready — if only I had known then ;-)