Why Founders Really Matter

The WSJ today published an article called “Drop in Tech Stocks Hits Startup Funding” (more here). The piece outlined how the NASDAQ correction is in turn affecting VCs and angels.

I’m not a pro at the public markets and its ripple effects, but I do feel strongly about this: time horizon really matters.

If your time horizon in owning equity is a few seconds or a few months, then, what the public markets do is really important. If the market is softening, it makes sense to unload your position ahead of everyone else (if you can).

But, if your time horizon is many years, then you can handle the short-term volatility. VC funds are 10 years-long, and so, we’re not paid to be traders. I would find it too nerve-racking to be eyeing a Bloomberg machine all day. Instead, I can think about the future and what trends might unfold and what business today can benefit.

Similarly, founders I know are committed: they pour their lives into their companies, and when things get rough, they bear down. Their time horizons are long and they’re willing to gut out the tough times. You really cannot replace that.

“Hired guns” usually don’t have as much persistence. You see various execs., who are hired later, often cycle into companies. Most don’t have the staying power of founders.

Founders really matter. They have extremely long time horizons.


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