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I sat in on the venture class at UChicago last night (I'm auditing the MBA program). They actually talked about this and the professor referenced some study ou

I sat in on the venture class at UChicago last night (I'm auditing the MBA program). They actually talked about this and the professor referenced some study out of UVA of successful entrepreneurs and one of the recurring traits was that their investments are guided not by the size of the opportunity but by their own conception of 'acceptable loss'. It was emphasized multiple times that you really should _not_ fund your venture on credit cards, 2nd and 3rd mortgages on your homes, etc even if you think an opportunity promises to be the next google, twitter, whatever.

AndrewWarner 17y ago
I can't disagree with that. It's a reasonable point. But when I left school, I used tens of thousands in credit card debt to build my first business because I just HAD to be an entrepreneur and there was no other way. - I didn't want a side job, because I felt it would be an excuse to procrastinate when the going got tough at my startup. - I couldn't raise money, because I didn't have the slightest clue where to begin. (All the books I bought on how to raise VC money were useless. My family didn't have the cash. And my family friends kept telling me I should get a job.) I would have given anything just for a chance to start a business. My kid brother and I actually talked about me selling a body part to raise money. Sounds ridiculous now, but it shows how determined (desperate?) I was to be an entrepreneur. Losing my money, credit, house, etc, all that meant nothing in comparison to a shot at being like the people I admired. I wonder if you can make it without that kind of determination. I wonder if someone who thinks rationally about not taking on too much debt can have the irrational passion to be an entrepreneur (or to do anything exceptional).
- patio11 17y ago
  I wonder if you can make it without that kind of determination. I wonder if someone who thinks rationally about not taking on too much debt can have the irrational passion to be an entrepreneur I'm thinking "You can" and "Plenty of people do", and that we just filter out their stories because they don't fit the narrative.
  - Psyonic 17y ago
    37 signals would be an obvious example that it can be done, wouldn't they?
    - dschobel 17y ago
      Again, 37 signals like VoodooPC is just an exceptional example. That's why it is useful to look at aggregate numbers like the UVA/Darden study (I'm still trying to find an online copy for you guys) which tells you what the majority of successful entrepreneurs (who themselves are already a minority of entrepreneurs) do. And the majority of successful entrepreneurs do not invest assets based on their perception of the magnitude of the opportunity but rather on their own idea of acceptable loss. Stripped of the emotional mumbo-jumbo and romantic appeal of putting literally everything into an investment, the statistically successful position makes perfect sense.
      - Psyonic 17y ago
        Sounds sensible. If you do find that study, make sure to post it. I'd love to see all the conclusions they came to

AndrewWarner 17y ago

I can't disagree with that. It's a reasonable point. But when I left school, I used tens of thousands in credit card debt to build my first business because I just HAD to be an entrepreneur and there was no other way. - I didn't want a side job, because I felt it would be an excuse to procrastinate when the going got tough at my startup. - I couldn't raise money, because I didn't have the slightest clue where to begin. (All the books I bought on how to raise VC money were useless. My family didn't have the cash. And my family friends kept telling me I should get a job.) I would have given anything just for a chance to start a business. My kid brother and I actually talked about me selling a body part to raise money. Sounds ridiculous now, but it shows how determined (desperate?) I was to be an entrepreneur. Losing my money, credit, house, etc, all that meant nothing in comparison to a shot at being like the people I admired. I wonder if you can make it without that kind of determination. I wonder if someone who thinks rationally about not taking on too much debt can have the irrational passion to be an entrepreneur (or to do anything exceptional).

patio11 17y ago
I wonder if you can make it without that kind of determination. I wonder if someone who thinks rationally about not taking on too much debt can have the irrational passion to be an entrepreneur I'm thinking "You can" and "Plenty of people do", and that we just filter out their stories because they don't fit the narrative.
- Psyonic 17y ago
  37 signals would be an obvious example that it can be done, wouldn't they?
  - dschobel 17y ago
    Again, 37 signals like VoodooPC is just an exceptional example. That's why it is useful to look at aggregate numbers like the UVA/Darden study (I'm still trying to find an online copy for you guys) which tells you what the majority of successful entrepreneurs (who themselves are already a minority of entrepreneurs) do. And the majority of successful entrepreneurs do not invest assets based on their perception of the magnitude of the opportunity but rather on their own idea of acceptable loss. Stripped of the emotional mumbo-jumbo and romantic appeal of putting literally everything into an investment, the statistically successful position makes perfect sense.
    - Psyonic 17y ago
      Sounds sensible. If you do find that study, make sure to post it. I'd love to see all the conclusions they came to