Investor involvement in moderation

My parents used to tell me that I should do everything in moderation. The reason why they said this is because my tendency is to do things at their extreme or not at all. So the recommendation was correct in light of my starting conditions.

However, over the years, I’ve discovered that the right approach actually depends on what you’re doing and what outcome you hope to achieve. In some contexts, getting the outcome you want requires doing things at their extreme. In others, it requires moderation.

For an investor, getting involved with the startups you invest in is an example of the latter.

If you do it too often, you become a hassle for the entrepreneur rather than a source of help. And because you’re intervening all the time rather than when it matters, the interventions that you attempt to make when it matters become less impactful.

However, if you don’t do it at all, you’re not able to help out when it’s necessary because you don’t know what’s going on at the company and the entrepreneur doesn’t think you care.

Investor involvement in moderation produces the best outcomes.


Also published on Medium.