This week host Harry Stebbings interviews Chris Schultz, an active angel investor and tech entrepreneur. As the Founder of Voodoo Ventures, a platform that invests in companies and builds out their own products, Chris has invested in several companies across a range of sectors at the very early stage.
In his experience of dealing with startups, Chris has encountered two distinct types of people:
- People focused on creating value
- People focused on extracting value
These archetypes can be anyone involved in a company – founders, employees, consultants and investors.
Simply put, some people are there for the love of the game, because they want to build something amazing and create a business, and others are just along for the ride, trying to figure out how they can cash in.
Chris believes you can break down investors into these two buckets as well.
‘The way I think about those two types of investors is an engineer is investing to try to build more value into the company, where a financier is focused on extracting value out of the company,’ says Chris, who identifies with the first camp. ‘When I invest, I want to work with the founder and help them to build additional value into the company, for better or for worse.’
This isn’t to say that financiers don’t value the product on its own merits, or that engineers are happy to rush into a less viable business just because the concept of the company excites them. However, engineers tend to be less focused on the terms and preferences that a financier-style investor might approach a deal with.
So, which are you – financier or engineer? Or do you wholeheartedly disagree with the whole concept of this sort of labelling system? Let us know in the comments below.
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