Motivation is a key factor in any act, and that is especially true for startup investing.
Given the high risk and unpredictability of markets and trends, having a strong “why” can help you weather the ups and downs throughout the years of a company’s journey. And with the decade-ish wait for returns and liquidity on a typical angel investment, that motivation should primarily be to support the entrepreneur community, not just make the most money.
“I don’t think that most successful VCs view themselves as stewards of capital,” said First Round Capital cofounder Josh Kopelman, this week’s guest on “Off the Sidelines” — an investor education podcast produced by us at Technical.ly in partnership with Project Entrepreneur, a program by UBS. “They see themselves as participants in the entrepreneurial ecosystem.”
As such, Kopelman contends that the single best thing investors can do is participate in that ecosystem — start a company, join an early-stage startup, and gain the knowledge and experience to provide actual value beyond just writing checks. He believes an investor’s goal should be to help their founders win, and that may involve taking personal risks and going against preconceived patterns.
Kopelman’s position that “the most successful founders are nonconformists” applies to himself too. As cofounder of First Round Capital, he has built his career on seeing opportunities where others don’t, getting in early with Uber, LinkedIn and Blue Apron, among other notable investments.
He started his career in the early 1990s as a precocious Wharton School student, first with a company called Infonautics, an early IT firm as the very infrastructure for the web was still being developed. In June 2000, he escaped the perils of the dot-com bubble bursting with a sale of his Half.com to eBay for $390 million. In these and other companies, he’s tried to beat a trend with a different approach.
This approach aligns with that of Project Entrepreneur, which aims to change the status quo for female founders and accelerate their growth through increasing access to capital and building ecosystems to advance women entrepreneurs. Like Kopelman and First Round, Project Entrepreneur recognizes that founders need more than just checks — they need fully developed ecosystems that invest in them as well as their companies. Investment innovators like Josh are leading the way, since it is becoming clearer by the day that such environments require a nonconformist attitude — and a lot of motivation.
Listen to the episode below to hear our conversation with Kopelman, including how investing is like a marathon and how to tell if a founder thinks you’re the smartest investor in the world (or the dumbest).
Off the Sidelines — Ep 8 — Josh Kopelman of First Round Capital
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