26 Lessons Learned from Investing in 26 Startups

David Cummings on Startups

After yesterday’s post Investing in 100 Startups, several people asked me about the lessons learned from the 26 startup investments I’ve already made. Generally, startup investing is much harder and less glamorous than it sounds, but I really enjoy it — entrepreneurs have such great energy and enthusiasm.

Here are 26 lessons learned from investing in 26 startups:

  1. Entrepreneurs are always overly optimistic
  2. If anything seems fishy or out of the ordinary, immediately pass
  3. Any signs that the entrepreneur isn’t self-starting and resourceful, immediately pass
  4. Everything takes twice as long and costs twice as much
  5. Look for a pattern where the entrepreneur had already started a prior business, failed, and is at it again
  6. Lean startups are better than heavy startups
  7. Expect regular investor updates
  8. More traction reduces risk
  9. Lack of liquidity is one the biggest challenges
  10. Exits are few and far between
  11. Plan for 7-10 years before seeing a…

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