Yesterday’s class with Jorge Mata covered a a lot of ground, from the practical (what investors are looking for) to the philosophical (entrepreneurship requires ego). Senor Mata was very candid with his opinions and forthcoming with advice and experiences. To recount everything discussed in the session would cause me to develop carpal tunnel syndrome, so I’ll be focusing on a few key takeaways that had particular meaning and/or interest for me. For a more complete blow by blow of the session, I’d advise you to look here.
Since you are all closely following each post here at thisismytechblog.wordpress.com, you’ll recall that my primary question for Jorge was related to the issue of raising money from friends as family, or as I like the call it, the implications of raising “personal” capital rather than “professional” capital. Some of the answer was on point with the thoughts on this subject I’d heard before, namely that it’s often a necessary evil; a phrase we often heard from Jorge was “money is always green,” meaning that you take the money where you can get it because as an entrepreneur you can’t afford to be picky about your financing sources. The most interesting part of the answer centered on two key points.
1) With friends and family you are negotiating with a person, not an institution. The contact (especially for those from latin cultures) will not contain everything. These unspoken agreements are key and must be taken into consideration.
2) It’s not just losing money that hurts. Jorge was adamant that he always works to make sure his angels get back their investment. However, it’s not just the issue of making sure that money is returned to those who lent it. He shared with us the story of his two brothers, one who helped to finance his initial venture and made quite a bit of money. The other more risk averse brother did not participate, and though he lost nothing, also earned nothing. This lost opportunity created a rather uncomfortable situation in the Mata family, and it is clearly something that must be managed when seeking “personal” sources of funding. Is everyone getting in on the action, and if they don’t, how will they feel?
Aside from the question of funding sources, I found two other points from the talk quite useful.
1) On the subject of businesses, despite his highly scientific background (Mr. Mata is a theoretical physicist by training) and technology centered business experience, the message of the day focused on entrepreneurship as a back to basics undertaking. Identify a problem or process, provide an easily understood solution, focus on superb execution rather than technology. Do these things, and success should come.
2) When doing business across borders, don’t try and force your style of work on the on your partners. The example of Silicon Valley investors forcing Mr. Mata eat a quick SANDWICH (shudder) for lunch rather than a drawn out, wine fueled Menu del Dia was amusing, but also quite true. Cultural sensitivity is something to be considered in all aspects, including (perhaps especially?) lunch.
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