Fred had a great post yesterday about why investors in private companies experience more anxiety than those in public ones (can’t sell) together with some spot on recommendations for entrepreneurs on how to deal with anxious investors.
I have been an occasionally anxious investor myself. Based on that here are some recommendation for the other side: how to be less anxious as an investor.
1. Remind yourself that you have a portfolio whereas the entrepreneur has just his or her company.
2. Remember that the entrepreneur faces his or her employees every day and you don’t.
3. Consider that the outcome of any investment involves a large degree of luck and randomness that you don’t control.
4. Going into investments pick markets and approaches that you have a specific thesis for. Knowing why you invested helps in times of trouble.
5. Focus on the things that the entrepreneur can control and help the entrepreneur focus on that – anything else just adds stress for everyone.
6. Remember that all of us who benefit from technology are luck to begin with even when individual ventures don’t work out.
I am not suggesting that you need to become a robot as an investor. You should experience your emotions of anxiety but then figure out how to let go of them. If you can, you will do the entrepreneurs you work with a great favor. I know it’s not easy and has taken me a long time to get to a point where I mostly succeed at this.
