Pave – Investing in an indivdual rather than a start-up

My friend and old business partner, Jeff Hilimire, recently sent me an article about Pave, the crowdfunding platform for investing in people. Pave’s approach differs from crowdfunding platforms like Kickstarter that focus on the idea or product where you fund the startup and get ownership of the product or similar. Alternatively, Pave allows you to invest in an individual and you get a share of their salary in the future (regardless of the company they work at or start-up they are involved with).

Pave’s approach of investing in the individual certainly resonates with me. Every start-up I’ve invested in has been mainly because of the people (founders, key employees, etc.) as opposed to the idea/product. Don’t get me wrong, the idea/product matters, but not as much as the people leading the effort that are on the ground day and night. You can have a great idea, but it still takes a special type of person to make a start-up successful. So my rule over the years has been to first make sure I like and believe in the people involved before I look at the idea/product in depth.

As I perused Pave to possibly find individuals to invest in, I came across an issue that’s put me off doing anything with Pave or similar crowdfunding platforms. Although some of the folks where inspirational, everyone seemed so packaged up and put together. I almost felt like I was shopping at Tiffany’s for expensive, perfectly boxed up jewelry. A lot of the individuals looked great, knew what to say, how to act, and were all shining stars in their own right, but I came to the conclusion that these folks would do great in life regardless of my money or involvement. They’ve generated enough interest on sites like Pave and have already learned how to market themselves. I discovered  I am more interested in the diamond in the rough; someone who has all the potential but hasn’t been discovered (at least not in a shop I can browse in with the rest of the world).  I have more fun, and find more value, meeting and discovering people the old fashion way, and generating my own value as a result of what I see in the individuals I come across through my life.

Does anyone share my point of view or disagree?

Start-up stages based on number of employees

I had a fun meeting with three guys from a start-up I’m looking at investing in; it made me re-live my own start-up days and I realized I’m envious of their road ahead. One of the guys asked me how to establish a culture in a start-up. My answer was, “it depends on the size of your start-up and what stage you are in”, which of course led into a discussion of what the start-up stages are.  Here is how I see the stages unfolding – what are your thoughts? I’d like to know other view points.

1 to 8 employees
The founders and the first employees ARE the culture. There is no separation. You don’t have to go out of your way to create/establish a culture, it’s already in the DNA of the company your building just by the nature of who you are, so don’t over think it.

In the early stages everyone is wearing any and every hat. If you need to figure something out, one of you will end up learning whatever it is at 3am and implementing it the best you can the next day. You’ll find that work and social lives combine, your co-founders/employees are best friends, a family, and you have each others’ backs. The start-up consumes every ounce of effort and excitement so nothing else maters. This is your life and you love it.  Most of the time you don’t have a clue what you’re really doing but that’s what’s so exciting; if it doesn’t feel that way, you are over thinking it and haven’t let go of your old life. Continue reading