If you have been around the venture capital industry for a while, you will know the “three deadly sins” VCs look to avoid in a potential new early-stage investment. Standard questions VCs ask entrepreneurs often focus on these.
You hear this over and over from investment partners at these firms.
I’ve worked extensively with an international venture network, and sure enough – it is a focus.
Here are the three:
1) The founder (me!) must be the boss, always and forever
2) Too many products, no focus
3) Not enough capital
Smart founders know these are hot issues for VC investors, it is part of the culture in the industry. To alleviate a potential VC investor concerns, the smart founder will proactively address them, right up front. To alleviate their concerns, say something like:
“I want to run the company but what’s most important is that we grow and are successful. I’m 100% focused on that and will do whatever is needed to achieve it. That includes working with/for someone else.”
“Our technology can be used in many areas but we are focusing on the product with the largest, most immediate return. We can expand from there to grow the business when the timing is right.”
“We do not want to run out of capital, which is why I’m out raising money now!”
If you think about it, these three dangers can be applied to other situations than a tech startup. It’s a useful framework even if something of a formula/stereotype in the startup world.
One example is a new artist trying to make an impact. Here is how it applies in that situation, point by point. Maybe there is nothing further from a tech startup than being an artist. Or maybe they are more similar than is obvious at first glance.
1) For an artist, it is mostly about the individual’s artistic aesthetic abilities so keep the focus on you. However, be willing to get help. Assistance is usually needed. Even creatively. For example, even Elton John had a co-songwriter/lyricist. But everyone focused on Elton. McCartney had Lennon and both were famous. Van Gogh had Gaugin and neither attracted attention while alive. Picasso had Braque though everyone mostly remembers Picasso (though Braque was famous in France). Jagger has Richards and it still goes on.
2) Skilled artists can produce all different kinds of artwork. Avoid scattered efforts and focus on a style or look and become known for that. Change later, though it is hard to do. Picasso was a master of this. First, he first became famous for co-inventing cubism. Then he moved on to other styles. Don’t underestimate how hard it is to become known for a different style after becoming established in another first.
3) It is impossible to be successful as an artist in the long term without some sort of money source. Think about how you will support yourself until your work can make you self-supporting.
I am sure you can think of other situations/professions where the three can apply.
