Smart Money?

There is one thing that is true in both start-up technology firms, and in university research labs. In both cases it is hardest to raise money when you need it the most. For the entrepreneur it is also the most expensive time to do it, so many of us wait as long as we can. At least this is what entrepreneurs say to each other, not necessarily wanting to admit that either money isn’t as easy to find as we had hoped, or that we are just too controlling to want to deal with investors looking over our shoulders. To potential investors however, we often say something different. We say that we are not just interested in money for our ideas; we want instead “smart money”. This seems like a perfectly reasonable concept, if not one that is slightly pretentious and condescending. After all, if an inventor needs the money, why not have a smart person give it? You then have positive feedback, at the same time as necessary cash. When this is considered a bit more deeply though, the kind of “smart” a technologist would want in an investor, is not the kind of “smart” he would want in an engineer. For the seasoned serial entrepreneur, confidence may outweigh any interference from having too many opinions on a technological solution, but for most of us it has a way of slowing down a project. For every smart opinion I get (and many are truly brilliant), I stall the progress of my own experimentation and invention, because it only seems natural to want to try good ideas that others suggest. This is almost a requirement if those ideas are coming from the people financing the company.


Does this mean that I want “stupid money” investing in a company I care deeply for? Of course not. If good ideas are a potential hindrance, bad ones are disastrous. What I want are strongly psychologically intelligent investors and partners, who see the big picture of an idea, which requires steps which may be less than perfect, but result in ever improving product releases. For me this is a new type of smart money, and one that is definitely worth pursuing.