To understand the differences between investors and entrepreneurs, think of your startup as a fire. It is the entrepreneur who decides to build a fire, gets the right resources in place by collecting kindling and firewood, and provides the initial spark. Up until this point, investors are only spectators who watch you run around frantically to get the fire started, and occasionally lob opinions your way. It’s only when you have the fire burning, and there’s potential to turn it into something much bigger, will an investor jump in to help. Even when investors get involved, their main function is simply to add fuel to the fire. By injecting additional capital, they can help you grow the fire faster and burn stronger.
To better understand an investor’s motivations and desires, it’s important to recognize that their main function is to add fuel to the fire.
Realizing that an investor’s main function is simply to add fuel to the fire, you’ll better understand their motivations and desires. You’ll avoid making mistakes like asking for an investment when you’re not ready, or hoping to get more than capital.
