Entrepreneur Office Hours - Issue #125
WE WERE ON A BREAK!!!!!
I was honestly surprised when a couple of you emailed after I didn’t send my usual issue of EOH on Tuesday. I wasn’t sure if anyone would notice. Of course, that also means I’m offended by the other however-many-thousand of you who didn’t email and/or didn’t notice. It’s like you don’t really care enough about the random, online stranger who sends you questionable entrepreneurial advice twice a week… 😉
In either case, with the (US) holiday this past Monday, I decided to take a little break from my usual publishing schedule. No new Web Masters episode this week either, and I only posted one article (shared below). I’ve also included a Q&A about how to research investors.
Otherwise, consider this email a friendly reminder that everyone should take occasional breaks. INCLUDING YOU!
Remember… burnout is real. Whatever your entrepreneurial dreams are, you’re never going to accomplish them if you’re not able to keep yourself happy and motivated.
Our Startup Failed Because We Didn’t Know the Difference Between Bad Problems and Good Problems
Entrepreneurs love solving problems, but, just because something is a problem, it doesn’t mean you should solve it. Do you know which kinds of problems are good problems?
Office Hours Q&A
I’ve been reading a lot of your old articles about fundraising. You keep bringing up the importance of knowing investors before reaching out in your articles. How would you recommend doing that and researching potential investors?
I know that’s kind of a lazy answer, but it’s certainly the best place to start. Of course, google isn’t going to help you get to know potential investors. It’s mostly just going to point you in the right directions, so here’s what you need to know…
The big things you’ll find when you Google investors fall into three categories: biographical data; historical data; and philosophical data. Let me explain each one, why they’re valuable, and how to use them.
The most common form of biographical data you’ll find on investors will be LinkedIn profiles and whatever bios are shared on their relevant employment websites (firm websites if they’re VCs, corporate websites if they’re angels).
This biographical data is useful in two ways. First, biographical data will help you learn about the investor and look for shared points of commonality. That’s everything from where the investor went to college (maybe you attended the same school!) to passions, hobbies, etc. These types of biographical pieces of info can help you build relationships with investors as people rather than just sources of money. This is important because, despite what you may have heard, investors really are people, and they enjoy being treated as such… =)
The second way biographical data is useful is that it usually points you toward the historical data. Specifically, it’ll tell you what their professional experiences are and what kinds of companies they’ve invested in.
Knowing an investor’s background and the kinds of companies that particular investor has previously worked for and/or invested in is going to tell you a lot of what you need to know about the investor’s investment thesis.
For example, an investor who’s only ever invested in (or worked for) medical device companies isn’t going to be a great person to approach about your Web3 dApp. Sorry.
Also, you can use historical data to learn more about how investors operate and how to connect with them. Specifically, looking at what other companies they’re currently invested in can tell you who you might already know or who you should get to know in order to get an intro. Also, historical data can help you find people to talk with who can tell you what it’s like to have a specific investor involved in a company. This is important because investors are going to be important members of your company, and you want to make sure you find ones you can work with for a long time.
The most important aspect of successfully finding investors requires finding people with an investment thesis that matches what you’re building. Because of this, your research needs to help you determine an investor’s investment thesis before reaching out so you can make sure you’re only contacting people who would be willing to invest in a company like yours.
For some investors, finding philosophical data can be a bit trickier than the other types of data, but, for most investors, it’s not impossible.
The best places to look are on sites like Twitter and Medium as well as personal blogs. Lots of investors are intentionally public about their thoughts on startups, so figure out where that investor is producing content and read it.
Even for investors who aren’t actively producing their own content, most of them get incorporated into other people’s content. For example, lots of investors wind up on panels that get filmed and posted to YouTube. Or they get interviewed on podcasts. Look for content like that featuring your target investors, and listen to what they’re saying. This will give you helpful insights into how they think about investing and whether or not your startup fits into their strategy.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!