How Committed Should an Entrepreneur Be?

A few months ago Amplifier helped start Spydrsafe.  It’s taking a very good approach to Android security, and I am very happy with how the team is progressing.  Last week I was over at the company, and the Mike Pratt the company CEO said “Hey, I want to show you something that I did over the weekend.”  He then rolled up his trouser leg and showed me this:

For those of you keeping score at home, what he did was tattoo his company’s logo onto his leg.  To be honest, I was a bit taken aback.  “Gee Mike,” I said, “that’s a pretty strong statement.”  He looked at me and said “well, you wouldn’t expect anything less would you?”  Well, maybe a bit less I thought.  I mean, tats are cool and all, but what happens if the startup didn’t succeed?  He’d have a reminder for a while, that’s for sure.  But, he didn’t see it that way.  His startup is going to succeed. 

Later I reflected on my reaction.  What does an investor expect of his entrepreneur partners?  How committed is committed?  How confident is confident?  Do we really expect that each entrepreneur either figurative or literally tattoo their likelihood of success on themselves?  I think that the honest answer is yes we do.  But, there are also limits.

The best analogy to investor expectations is that we look for entrepreneurs who are driven but have a sense of perspective about themselves and their mission.  We want people who are confident and willing to take risks, but are not narcissistic and seekers of risk for risk’s sake.  There is a very interesting line between someone who is a backable entrepreneur and someone who is not.  Overall, I think that investors are most comfortable funding people who are in balance with themselves, and do not exhibit extremes of behavior.  The ability to calibrate one’s behavior to a situation, and to provide maximum effort without damaging oneself permanently, is at the core of this.

For example, investors will generally agree that they seek entrepreneurs who have “skin in the game.”  That doesn’t mean that we expect an entrepreneur to become financially destitute if their startup fails.  What we expect is that an entrepreneur not give up at the first sign of adversity.  In fact, if the entrepreneur doesn’t hang in through at least a few pivots we have reason to be disappointed.  But, that doesn’t mean that we expect entrepreneurs to tie themselves permanently to a doomed enterprise.

Over the years a lot has been written about the VC/entrepreneur relationship, and what makes a good one.  I think that what Mike’s tattoo really triggered for me is the following realization: a good investment is one where you are confident that the entrepreneur will do everything reasonably possible to succeed, and a good investor is one who understands that if an entrepreneur fails after trying his best the entrepreneur should be free to try again elsewhere.

While I would never have asked Mike to carry around a tattoo of his company logo on his ankle, I am glad that he is. It shows me in a small way that he is thinking about his company all the time, and is reminded that its success is his success.  As an investor I can’t really ask him to do more than that.