Amateurs Versus Professionals: You Need Both on Your Investing Team

You can tell the difference between amateur and professional when it comes to investing. It’s in the attitude & energy levels.

An amateur brings enthusiasm and energy as they are learning. They come with new ideas because they don’t know what works as they have no experience. But because of this they are unpredictable and honestly erratic. Hard to count on them. But the right & good amateur sheds a new light on problems. And usually brings energy to make up for their lack of experience. Hopefully also a good attitude and openness to learning. Without this, they are NGMI (Not Going to Make It)! They definitely will not last long enough to make the transition to a professional in the business. 

A professional has a “been there and done that’ mentality and wide body of knowledge and patterns to tap into. They know the textbook because they wrote the textbook (or at least copied the textbook). But the danger is the world changes very fast and these textbooks can get outdated very fast, especially when it comes to technology. Also their experience can easily turn into arrogance or “know it all-ism.” This is incredibly dangerous. There are many previously massively successful investors & founders in Silicon Valley, now widely seen to be very irrelevant these days. Their previous success blinds them to the new trends and startups that are fast emerging. You have to be hustling and working on this all the time. You have to love the game. 

I started off as an awful amateur angel investor back in the 2012-ish timeframe and transitioned into a so-called professional investor as a Partner at 500 Startups. But honestly, I was still a rank amateur and I threw myself into learning the venture investing business. It took doing a lot of crappy deals, a lot of reading, a lot of podcast listening and lots of mentoring from REAL VCs to get remotely decent. 

But somewhere along the line, I fell in love with this business. I’ve said it before, it’s a hard business to get really good at. But it’s the ultimate “Human Potential” business, you get to meet and invest in some of the brightest young and old talent across the globe. And if you do this well, everyone makes money. What is better than that? 

Self knowledge and knowing where you sit on the amateur to professional continuum is really important. So be humble, be self aware and be prepared to work your butt off. But if you do it well, the rewards in both financial, emotional and psychic impact are so worth it. I feel so grateful and lucky to be doing this as a vocation.