When I was a kid, I was very curious. I had a thousand questions for anybody I met. This carried on to my college and adult years. In all the jobs I had, interesting people were put in my path. They all had great stories.
I realize now, all my life, I am a seeker of people’s stories but not a seeker of their advice. I like collecting data and insights and use them to make decisions. This is a big problem. Fundamentally, I must believe that given enough facts, I can figure it out. Emphasis on “I”.
I have the most respect for advice-seeking entrepreneurs. They know, as part of their operating system, time is money. If they get the right advice, they can shortcut their path to success. Better decisions, less frustration. In fact, I have observed there are three types of entrepreneurs.
1. Entrepreneur Who Never Asks
This was me. I wanted to be right on my own. This speaks to my insecurity.
Most recently, as an angel investor, I was given the opportunity to invest in a later stage company. It is a company with a previous angel round. They had a stroke of bad luck and went through all the cash. They were looking for a new lead investor. We knew each other, and I said I would help them out.
The issue here is, I have no real experience in structuring deals for anything other than raw startups. But that didn’t stop me from putting together a term sheet for the deal. Because of the size of this deal and my inexperience, I wasn’t willing to invest much money. This created the necessity to include a couple of experienced angels.
I sent the term sheet to one of the experienced angels. This is where the education began. He reviewed my term sheet and offered excellent suggestions. He helped me better understand the situation the entrepreneur and the investors were in. He put together terms which reflected the risk of the deal. I was schooled.
This experience showed me what I have been missing out on for the last 23 years of angel investing. I have been investing as a solo angel and not really seeking advice on my deals from other experienced angels. I now realize how my insecurities hamstrung my success and relationships. Not asking for advice was a mistake.
2. The Entrepreneur Who Never Does
I have a friend who is an entrepreneur. I’ve been an investor in two of his businesses. We make a fine pair. He is the other side of the same insecurity coin. I want to be right, and he does not want to be wrong. We make for a dangerous combination.
He is always asking for advice. He is bright and capable but has trouble making the big decisions. His process is to meet, present what he is working on, and ask for advice. The meeting will often end with him asking, “What do you think I should do?”
When we get to this point in the meeting, I am relieved. Asking me this question is like tossing a fresh piece of meat to a hungry lion. I am thinking, “Finally. I get to say…here is what you should do.” But he still doesn’t make the decision to do it. He does not want to be wrong. He knows in the end it is really up to him, not me.
3. The Entrepreneur Who Asks and Does
I am working with an entrepreneur who let his expenses get a bit ahead of his revenue. Based upon the terms of our investment in his company, he was at risk of losing equity. We had a discussion on this topic at our last board meeting and he asked for advice on alternatives. The decision was in his hands.
Within a week, he made the decision to cut expenses starting with his own salary. He sought advice and took action. This demonstrated to me he will succeed. He looks for advice, analyzes it and makes a decision. He is not a man with insecurities. He is an entrepreneur looking to succeed for all involved.
Your insecurities as an entrepreneur will either kill your dream or severely limit it. Do your analysis, rely on your experience, but ask for advice and take it. Startups are single strategy companies. If you use up all your money because of your insecurity, shame on you. You never gave yourself a chance. People can and will help you.