Question of the week #8

What role does gut instinct play in your investing decisions?

This is not the first time that I have been asked this question.  It goes under the heading, angel investing.  What I mean by that is even though I am investing in companies that have shown traction it is still a high risk.  I absolutely want to see a business plan that shows projections including an organization chart for growth but the chances of those exact plans coming to fruition are slim to none.  Start-up business growth is a work in progress.

So the answer to what role does my gut play in my investing decisions...huge.  My investments are not limited to one particular vertical so my thought process is wide.  I am a generalist at heart.  I look at a business and wonder if this is something that can change an industry, be a new part of an industry or perhaps disrupt an industry five years from now.   Yet the most important thing is if the entrepreneur is someone I believe to be a person who can execute on that plan.  Entrepreneur first, business second. 

A really good entrepreneur pushes forward but is also listening to the marketplace as the business grows.  It is when the business really takes hold that the numbers are more and more important to the game as you have to plan and perhaps raise more funds based on certain models.  At the onset, it is really about ramping up to speed with a shot of cash that will take that original traction and in essence grow the model by planting roots. 

I do believe we are seeing a fundamental shift in every single vertical and there are opportunities for investors to help grow businesses in each industry.  That is why I like being involved in so many areas.  It is interesting and opportunity appears to be ripe everywhere.  We will look back at these times as the time when everything changed.  The economy is shifting with technology.  Being part of helping entrepreneurs grow their business is exciting and rewarding and at the level I am getting involved, a lot of it is gut. 

Truth is, I have been making gut decisions at every turn of my life.  It is truly how I operate.