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Why am I so lucky?

By on January 22, 2014
FlickrCC Neal Fowler
FlickrCC Neal Fowler
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Mark Suster, one of my favourite VC bloggers, wrote a post entitled “Why am I so lucky?” In it, he says that if some unexpected luck comes your way, be sceptical. Not distrusting, just sceptical.

So if a large Silicon Valley investor contacts him, offering him the chance to invest in the A round of a company that VC has backed for a seed round, he asks himself “Why am I so lucky?” The Silicon Valley firm can afford to fund the A round (and the B round, and the C round). They were in early. They don’t usually co-invest with Mark. So why is so lucky this time?

The full post is worth a read: Why Am I So Lucky? Why You Need to Be Sure You’re Not the Sucker

But it is also a great reminder of why you should be so cautious about who your first investor is. If it’s a great VC firm who backs you at the seed stage, you might now be in trouble: if they don’t follow on their investment, the danger is that no-one else will either. Ditto with strategic investors, where I urge you to be very cautious about taking money from a strategic investor.

It’s not just about the first round. It’s about thinking how to make sure you are keeping options open, not closing them down, when you take investment.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com