(Photo credit @claybanks)
Venture capitalists are by definition investors who take calculated risks, and usually really, really big ones. Their goal is to invest in multiple companies with the assumption that the majority of them will fail, but at least 1 out of 10 will yield 10X or higher results (which will hopefully make up for the failed investments). They spread the risk out. They listen to hundreds, even thousands of startup company pitches and select the ones they think have the best chance of success, after evaluating the company’s management team, the financials, the tech’s potential, etc.
And even with all the resources at their disposal, they get it wrong ALL the time.
So please don’t think you have to have everything figured out completely before you decide to take a career leap. And know that you’re going to make some mistakes along the way - but that’s ok!!
Let me offer you some tips and strategies to help you with this type of career decision-making.
With VCs being taken in by the hype, how can you avoid joining a leaky ship (aka a bad startup)?
Try thinking of making career changes as taking calculated risks. For some, it’s helpful to think of a chess game. How many moves ahead can you plan out and how does that help you decide what to do today? When/how do you need to shift strategy when your “opponent” throws up a surprise move (aka a life change, an industry shift, or an economic downturn)?
Learn to identify your risk tolerance. I talk often with students/clients about identifying your ‘risk tolerance.’ Everyone has a different way of assessing risk in their career and in figuring out how much risk they can handle at any one time. Remember, it can also fluctuate based on your age, family dynamics, finances, etc.
Check out this article for more details on the RRIS method for improving your risk tolerance.
Face your fears. You can also work to increase your risk tolerance by trying this fear-setting technique from this famous guy Tim Ferriss I knew in college.
The aim of the exercise is to name your fears so you don’t let them lurk in the shadows and prevent you from taking big actions. I was surprised by how helpful it was the first time I did it, that even though I scared the hell out of myself, it felt great to vocalize my fears and face them!
Here’s another take on this fear-setting exercise too.
Another way to make hard career decisions is by educating yourself so you aren’t leaping blindly.
What universal skills do you have? You can educate yourself about your skills by taking assessments like StrengthsFinder.
Learn about the startup landscape. You can also use some of the tools the VCs do to educate yourself about the startup landscape & specific niches within it (fintech, 3D printing, IoT, etc): CBInsights and VentureScanner.
Get recommendations on top startups to join. Wealthfront also does a yearly career-launching companies blog post, and provides great criteria/methodology for how to choose among one of these organizations.
