Jun 30 2009
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“ It’s not smart money. It’s wise money. Wise investors see long-term potential. Entrepreneurs often choose VCs based on how well the VC knows the company’s industry or has a specific skillset (like good at business development or understands the technology.) The entrepreneurs think that this is what “smart money” means. But really, the job of a VC is not to figure out your industry better than you or to fill a gap in your team. Their job is corporate governance — financing issues, recruiting, firing a CEO (or possibly you!), or mergers and acquisitions. These issues require wisdom - understanding the long term consequences of your actions. As such, what you’re really looking for is wise money.
