Question of the week #23
I have always been interesting in a variety of things so it is no surprise that I am a generalist when it comes to making investments. So it will come as no surprise that this is the question of the week.
You invest in companies in many industries, what cross-industry similarities and differences (i.e. tech and food/restaurants) have you noticed?
There are both similarities and differences. What is similar is the desire of each entrepreneur to succeed. Starting something, regardless if it is a consumer product or a tech company, there is the challenge of building the initial foundation to grow on. From a legal document stand point the documents are relatively the same. Restaurants on the other hand is a different investment strategy where the owner generally owns 50% from the onset and the investors own the other 50%. Restaurants do not have multiple rounds but one clear cut cash investment. Sometimes they need a little more and then they raise that money and give up their own personal equity.
What I enjoy about being in a variety of different businesses is being involved in the growth. Through that involvement I learn more about that space. I also have had the opportunity to meet investors that are more specific in their investment strategy. There are a handful of investors that I have met in the consumer products space. They are experts in that area and really understand the levels that need to be met, how to roll out a product, what margins are expected, etc. Whereas the investors in the tech community who I have known for a lot longer look at investments differently.
At the end of the day I really invest in an entrepreneurs visions. I expect different returns from each vertical. I guess the best way to look at it is I am certainly not putting all my eggs in one basket.