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I actually gave this quite some thought after talking with a friend about the up-and-coming startup he was working for. Recently they just received a 20 mil ser

I actually gave this quite some thought after talking with a friend about the up-and-coming startup he was working for. Recently they just received a 20 mil series A funding and yeh...they're burning cash (mass hirings, searching for a new location, etc.). The thing is, the CEO has started his own company twice and sold both (this was his third company) so we both assume he knows what he's doing. In the scenario of the CEO, I feel like his plan is this, and only this: "high risk, high reward" "live fast, die young" Are these the correct thoughts for a serial entrepreneur (who is also sorta like an investor)? *edit, funding was actually for series A not B

adventured 10y ago
There is no such thing as objectively "correct thoughts" in this context. There are numerous approaches that can result in success with a start-up. Some people are comfortable with more risk, some people prefer less risk. Sometimes in hindsight a situation that appears high risk, is in fact much lower risk than most observers anticipated (Facebook is an example of that, nearly every valuation stage was widely pronounced to be absurd). As an entrepreneur, I'd argue the best scenario for one's self is make sure the risk you're taking is a relatively close match to your own tolerance for risk (that is, within a reasonable range of your tolerance, not far outside it; the consequences to yourself in terms of stress, quality of life and performance skyrocket the further you get away from that).
- huangc10 10y ago
  I agree with you. However, there still seems to be a progression (or at least from articles I've read stating that serial entrepreneurs are usually more successful...) It seems that newer entrepreneurs will take less risk (is this true..? that's why I used seems). More seasoned/serial entrepreneurs will just go balls to the wall because they know of the mistakes they've made in the past and know how to be successful. They don't seem to be as scared of failure because they've failed before. Should newer entrepreneurs just skip the progression and go straight to not being afraid and effect mimic more seasoned peers. Would the chances of success be slightly higher (even a slight higher chance of success is worth it...)?
mattthebaker 10y ago
Yeah, these are correct thoughts for a serial entrepreneur. With two, assumingly successful, exits he now likely has a net worth somewhere between 2-100M. He could live off his investments/net worth. If his next exit is not a very big one, he will not really gain much. i.e. If he exits for 10M, which could be good for the early employees, he has only made a small fractional increase in net worth, for presumably a ton of work -- he wasted his time. So of course he will want to take big risks. This is probably a big part of why VCs prefer serial entrepreneurs, besides other obvious benefits like experience, they are prepared to shoot for the stars which is how VCs get paid.
- huangc10 10y ago
  agreed.

adventured 10y ago

There is no such thing as objectively "correct thoughts" in this context. There are numerous approaches that can result in success with a start-up. Some people are comfortable with more risk, some people prefer less risk. Sometimes in hindsight a situation that appears high risk, is in fact much lower risk than most observers anticipated (Facebook is an example of that, nearly every valuation stage was widely pronounced to be absurd). As an entrepreneur, I'd argue the best scenario for one's self is make sure the risk you're taking is a relatively close match to your own tolerance for risk (that is, within a reasonable range of your tolerance, not far outside it; the consequences to yourself in terms of stress, quality of life and performance skyrocket the further you get away from that).

huangc10 10y ago
I agree with you. However, there still seems to be a progression (or at least from articles I've read stating that serial entrepreneurs are usually more successful...) It seems that newer entrepreneurs will take less risk (is this true..? that's why I used seems). More seasoned/serial entrepreneurs will just go balls to the wall because they know of the mistakes they've made in the past and know how to be successful. They don't seem to be as scared of failure because they've failed before. Should newer entrepreneurs just skip the progression and go straight to not being afraid and effect mimic more seasoned peers. Would the chances of success be slightly higher (even a slight higher chance of success is worth it...)?

mattthebaker 10y ago

Yeah, these are correct thoughts for a serial entrepreneur. With two, assumingly successful, exits he now likely has a net worth somewhere between 2-100M. He could live off his investments/net worth. If his next exit is not a very big one, he will not really gain much. i.e. If he exits for 10M, which could be good for the early employees, he has only made a small fractional increase in net worth, for presumably a ton of work -- he wasted his time. So of course he will want to take big risks. This is probably a big part of why VCs prefer serial entrepreneurs, besides other obvious benefits like experience, they are prepared to shoot for the stars which is how VCs get paid.

huangc10 10y ago
agreed.