Top Lessons from Leading Startup Investors

After almost going bankrupt, Godard Abel became more prudent in scaling startups.

\"It's the near failure, you know, almost being bankrupt... it's made me more prudent, I think more careful as an entrepreneur... keeping a closer eye on... getting profitable, free cash flow positive.\"

• Focus on profitability and cash flow early.
• Scale carefully to avoid overinvestment.
• Use failures as lessons to improve leadership.

Matthias advises defining your investment strategy and taking big risks within it.

\"Find your investment strategy... constrain it to something that works for you and then take big risks within those parameters.\"

• Tailor your strategy to your strengths.
• Take big risks within your defined limits.
• Consistency leads to long-term success.

Matthias believes market downturns are great opportunities for contrarian investors.

\"It's amazing... VCs are supposed to be contrarian... After a big collapse... everyone tightens up... I was like, really? This is gonna be a great time.\"

• See downturns as opportunities, not threats.
• Be contrarian to capitalize on market conditions.
• Invest when others pull back to gain advantage.

Matthias learned that embracing risk and staying consistent leads to investment success.

\"I made the biggest mistake not investing in companies that had crazy risks... You don't go crazy in the exuberant cycle... On the down market, don't leave it... be consistent.\"

• Assess when potential outcomes warrant the risk.
• Stay consistent and patient through market cycles.
• Take big risks within your investment strategy.

Rusty and Jay emphasize backing founders with vision and drive, no matter the market buzz.

\"Find the right people with the right mix of vision and drive and you back him no matter what the market is buzzing about... that is a winning formula.\"

• Invest in founders with strong vision and drive.
• Ignore market hype when making decisions.
• A people-first approach leads to success.

By working closely with founders, Rusty and Jay learned what it takes to build real companies.

\"That's where we really learned what it takes to build real companies, is actually being in founder mode alongside him.\"

• Collaborate closely with founders to gain insights.
• Experience challenges firsthand to shape investment thesis.
• Adopt a people-first approach in investments.

Investing their own money before raising LP funds forced Rusty and Jay to sharpen their judgment and discipline.

\"You learn real quick... early-stage investing is not about jumping on a hype cycle. It's all about the people.\"

• Focus on the people, not market trends.
• Early-stage investing is about founder quality.