A Mistake from the Get-go

Traditionally, venture investment was recognized to be a people business. The venturer backed not an idea, not a plan, but a person. The function of a written business plan was to be sure the entrepreneurs had carefully thought the project through, and to educate the venture capitalists enough about the proposed business that they could challenge the entrepreneur about the proposal. But it wasn't a plan that the venture firm backed; it was the entrepreneur.

The rule of thumb about whom to choose for an investment was: Invest in someone you know, or someone with a track record. The best investment is in someone you know who has a track record. And never invest in someone you don't know who has no track record. ...

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