No, I won't invest 1 million in my next startup

This post is a follow up on this good post by Fred: Would you invest 1 million in your next employer?. Go read it now.

Money roll

I happen to currently work for the french government, but that situation will change soon in favor of a 15-persons startup.

I realize that I have much less experience than Fred in the startup world, but still, I had to evaluate a few offers some weeks ago. I first convinced myself that job interviews were also a moment for me to evaluate my next employer. I tried to evaluate the company, its health, the team, the product, the technical context and challenges ahead, and the "cultural fit" (whatever that means). Last but not least, I also followed my instinct.

Now, would I invest 1 million in my next startup? I guess not. Isn't it awesome? Sure it is! But would I invest 1 million in any tech startup? Probably not.

First, because having that much money is toxic. Budget constraints are good as long as they're not too extreme, e.g. they don't endanger your capacity to build things at a fast but reasonable pace. Too much money leads to waste and makes priorities vague or even incoherent (a fortiori in bureaucratic structures). Plus, investing all your money in one startup doesn't look like a good move to me. If you trust your gut that much, good for you, but I certainly don't.

You may object it's not Fred's main point, and you would be right. I think Fred asks if you would follow your next CEO in the biggest challenges, or at least if you trust he can show you the road ahead.

Well I agree, these are some qualities I see in my future boss. But let's qualify this a bit. Unless you know this person before, it's hard to be sure in a one-hour interview. The interview is an uncomfortable game of seduction on both sides, and none of us saw the other at real work or under pressure for now. I'm 100% sure it will be OK, but still, I lack experience with those people.

The second problem is this relation is dynamic, and it can sink pretty fast. I had 3 great bosses in the past, 1 average, and 2 mediocre ones. And the hardest times were sure with one of the great ones, because in a 6-months period our opinions diverged on profound, strategic things, and we ended up making efforts in opposite directions. See Jed Bartlet and Leo McGarry at the end of the West Wing TV show if you like. On the other hand, a person can look "average" at first sight and turn to be a great leader, because he has some qualities that take time to surface.

At the end of the day, trust your instinct, but balance it with rationality and your own experience. And maybe keep your millions for your own startup ;-)

UPDATE 1 : Fred highlighted on IRC that he was specifically talking about investing 1 million in the CEO as a person, not in the company. I guess I read his post too fast. Anyway, most of the content in my own article still applies. Thanks for the clarification!

Credits: Photo £20 roll (cropped) (license)