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26 Lessons Learned from Investing in 26 Startups{.markup—anchor .markup—p-anchor data-href=“http://davidcummings.org/2015/07/05/26-lessons-learned-from-investing-in-26-startups/?utm_campaign=Mattermark+Daily&utm_source=hs_email&utm_medium=email&utm_content=20450339&_hsenc=p2ANqtz-_eAwq9GAQNsiRZ1fWRTHPBPEDthG8J2TVdTV3R1SurUg5ncNelBa56fUxqW2dCEbnkg5EZn9UzZKX4zW9OwLjFDHuryQ&_hsmi=20450339” rel=“noopener” target=“_blank”}

1. [Entrepreneurs are always overly optimistic]{#fb2e}
2. [If anything seems fishy or out of the ordinary, immediately pass]{#0567}
3. [Any signs that the entrepreneur isn’t self-starting and resourceful, immediately pass]{#c15d}
4. [Everything takes twice as long and costs twice as much]{#8572}
5. [Look for a pattern where the entrepreneur had already started a prior business, failed, and is at it again]{#b82e}
6. [Lean startups are better than heavy startups]{#dc79}
7. [Expect regular investor updates]{#4b17}
8. [More traction reduces risk]{#ca89}
9. [Lack of liquidity is one the biggest challenges]{#d7f3}
10. [Exits are few and far between]{#ba90}
11. [Plan for 7—10 years before seeing a return on investment]{#c549}
12. [Exit value is more important than entry value (e.g. a small piece of a big pie is usually better than a big piece of a small pie)]{#eeb1}
13. [Reserve twice as much as the original investment for follow-on investments (e.g. exercising the pro-rata rights)]{#2c54}
14. [Personality fit is more important than entrepreneurs realize]{#45c3}
15. [$300k is the ideal amount for a seed round]{#57fc}
16. [Build a portfolio for diversification]{#c979}
17. [Investor jargon is more prevalent than expected]{#c031}
18. [Know that winning a pitch competition isn’t the same thing as a successful startup]{#78e9}
19. [Fewer seed-funded startups as a percentage raise a Series A round]{#defd}
20. [Developing rapport well in advance of investing is important]{#6668}
21. [Evaluate the Investment Readiness Level]{#679b}
22. [Seed capital is different from venture capital]{#02c6}
23. [Bet on the horse, course, or jockey]{#7195}
24. [Understand the difference between friendly customers and unaffiliated customers]{#8cc9}
25. [Milestones met pre-investment help improve confidence]{#939d}
26. [Investing is an incredibly hard way to make money]{#8231}

2015.7.09 ::: ::: :::