The Third Theory of Disenchantment: Beware of First-Time Founders

Why do investors prefer to invest in serial entrepreneurs rather than first-time entrepreneurs?

The answer is simple: the probability of first-time entrepreneurs stumbling into pitfalls is much higher.

Let's talk about some advantages of serial entrepreneurs:

First, they have experience throughout the entire project process and know what to do and when.

Second, they know how to interact with investors.

Third, if they have a successful project experience, their personal credibility and endorsement are strong.

This is why Babylon, a leader in Bitcoin staking, had a very easy time in early financing, relying on the personal experiences and charm of the project Founders.

In contrast, first-time entrepreneurs should be wary of encountering the following types of people:

➣ Those who pretend to understand but do not.

➣ Those who do not take the experiences and lessons of predecessors seriously.

The former is particularly evident among those who switch careers to start businesses in traditional industries; they always rely on their past experiences and never think about adapting flexibly to align with market trends.

As a result, whenever they want to make a big push, they end up getting into trouble.

The latter resembles a novice in trading; investors, having been exposed to numerous projects and participated in many project processes, have effective solutions for some issues that arise during project development.

However, first-time entrepreneurs may have an obsession with their own methods of handling matters, assuming theirs is the optimal solution. They end up spending a lot of time and energy in trials, only to find that the solutions provided by investors are the simplest and most efficient.

Many first-time entrepreneurial projects fail during the trial process because they run out of money and lack sufficient cash flow to sustain project development.

Based on this, when we research a first-time entrepreneurial project, we need to focus on the following two points:

➣ Does the founding team have sufficient awareness and understanding of the market? If they have irreplaceable past project experience, that would be even better, like Huma.

➣ Are the Founders 'cooperative'? First, they should listen to investors' advice; second, they should heed the feedback from community members.

If they lack both, I can only say, 'Good luck to them!'