Sep 06

It’s not hunger or grit. The one thing that determines success


I read David Rose’s New York Times bestselling books: Angel Investing and The Startup Checklist.

Then I wrote my own checklist of things to do:

  1. Call David Rose
  2. Ask him to do an interview with me for this blog.
  3. Find out what else he knows.

Why did I want to talk to him so much? I’m hungry for knowledge and still climbing in the angel world. Meanwhile, he’s at the top of it. He’s a 3rd-generation angel investor who learned the business as a pre-teen. He’s the founder/CEO of Gust—the global platform that powers about 1,000 investment organizations connected to half a million early stage startup companies in the world of organized professional angel investing. He wrote the definite guide on Angel Investing. He invested in over 90 companies in a lifetime of successes. He’s an associate founder of Singularity University, a Silicon Valley think tank and business incubator teaching the next generation of leaders to solve energy problems.

For Rose, he explained that any deal hinges on founders with these traits:

  1. INTEGRITY. It’s a real business challenge. With an entrepreneur in a startup world, it’s all based on this person.
  2. PASSION. It’s necessary because it drives you. You get no work life balance. Otherwise you won’t have the gas in the tank to get over the hump, because there are a lot of humps.
  3. EXPERIENCE. That shows leadership ability.
  4. COMMITMENT. The one thing I’m giving increasing credit to these days is commitment, being willing to get up when you get knocked down again and again and again and again and again and again and again and let nothing stop you and drive through a wall. That’s what tends to separate them. It’s more than grit. It’s commitment. Keep going after everything tells you to give up. Bad things happen to every entrepreneur. It’s very easy to give up. Unless you can push through you’re not going to get there.

Not grit, but what about hunger?

“I don’t think that hunger is particularly critical. Exhibit A is I’m talking to you now. I grew up comfortable, done well in life. I’m eating in a fancy restaurant in Manhattan. Am I hungry? No. Do I have passion, drive, commitment? Absolutely.”

He knows every twist and turn of the angel investing roller coaster, from the exhilarating rush to slowly stalling on the tracks.

The peak of the mountain was a video company: “Angels wrote a check for $500,000. That’s all they needed.  Broke even within 9 months. We stayed there a few years, put money back into the business. Sold it for $130 million. It was single digits valuation at first.  That was a very, very nice deal.”

The valley was a promising app deal until the co-founding developer dropped out in 90 days: “We suggested very nicely to the other founder to bag it and return what money you could. Like a decent entrepreneur, he was committed wanted to see it through. We said OK. He spent 2-3 years valiantly trying to make a go of it. The company faded out. That was a misreading of a cofounder. All you can do is pay more attention and see if they’re really committed. He said all the right things. Hindsight is knowledge. I talk more about goals and economics in the future. Human factors are the one thing you can’t really structure against.”

Rose is an angel investor, entrepreneur and futurist. Across all of his investment interests, he said his philosophy remains consistent.

“I do scalable platform plays. I don’t do medical technology because I don’t understand it. I don’t do fashion or music because I have no fashion sense. Don’t do alcohol or tobacco. Life is too short. Gaming interesting, not my shtick. I’m not a foodie. I don’t do food deals,” he said.

“At some point you know what you think it’s worth, you do it — and if not, you walk away.”

Thanks to his influence, encouragement and knowledge, I’m hungry for even more commitment.

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