When most founders successfully exit their startup, they usually go back to the same well: They try to think of the next venture they can start and scale. Such is fine, of course. Second-time founders often produce some of the most important innovations of our time, given that they return to entrepreneurship with a wealth of experience, such as the late great Tony Hsieh, who previously exited LinkExchange to Microsoft before founding Zappos.
But second-time founders can increase their chances of making an impact through another domain: investing. To wit, many of the founders or executives from the region’s most successful startups, such as Grab, Go-Jek, and Lazada, have gone on to become influential investors. These so-called mafias often pass startup leads to one another as an informal but trusted network for dealflow.
As these startup mafias know, it’s hard to take on both entrepreneurship and investing at once (at least immediately), so we would like to give our take on why exited founders should consider investing before launching another startup.
It’s important to note that this advice comes from first-hand experience. At Accelerating Asia, we work with a few such founders, who either co-invest into one or more of our startups or invest directly into one of our funds. In either case, we see the benefits that they get from becoming an investor that they would not necessarily get as a founder.
Scale up your impact. The goal of every startup is the s-word: scale. Yet no matter how ambitious and successful you are as a founder, you can ultimately only scale one startup to affect one industry.
Such is not the case when it comes to investing, where you have the opportunity to help scale many different startups and in turn shape many different industries. Sure, you may not be operationally involved in the day-to-day business activities of each venture, but you will still play a meaningful role in all of them. Just look at how some of the top investors in Silicon Valley, such as Sequoia Capital or Kleiner Perkins, have left their mark on the global tech ecosystem as we know it today. Like them, you can back and grow a roster of winning companies, rather than put all your eggs into just one.
Take on a new challenge. Many founders love growing companies because it’s a challenge. But there’s a bigger challenge that they often tend to overlook: How do you mentor another founder to grow their own company? Here your work is abstracted one level higher: Rather than playing 4-D chess, you’re now coaching another person to successfully play 4-D chess.
Mentoring other founders can be tough, but it can be even more rewarding. What’s a better feeling in the world, after all, than helping another person? And there is no one more qualified to help other founders than you: You were literally in their shoes, just a few years or even months ago. Your advice can get them past the current roadblock and reach the level of breakout success that we all dream of.
At Accelerating Asia, we encourage our investors who were successful founders to strategize with our startup teams. By doing so, both parties grow: Founders gain knowledge that they can immediately apply, and investors walk away with a deeper sense of fulfillment knowing that they made a difference.
Focus on the big picture. As a founder, it’s easy to romanticize your startup journey in hindsight and forget all the work you may not necessarily love doing. Outside of building your product, you’re also responsible for a laundry list of functions, including everything from compliance and legal to recruitment and account management. Depending on your functional background, you may like some of these functions, but there are certainly several that are not your cup of tea.
As an investor, you are spared of the nuts-and-bolts of building a business. You can instead focus the entirety of your energy on the big picture, bringing it into fruition through higher value tasks such as strategizing, relationship-building, vision-setting, mentoring, and more. You can concentrate, in short, on the activities that give you energy rather than drain it - most of which are built around the act of creating at the heart of entrepreneurship.
If you’re a successful founder looking into investing, consider doing so with us. As mentioned earlier, you can co-invest into any one of our startups that catches your eye, or invest directly into our latest fund. In either case, we’ll make sure your first foray into investing is as rewarding as your first startup and that you experience all of the joys cited above.
Accelerating Asia invests in startups with scalable technology solutions and revenue generating business models that combine purpose with profit.
In making an investment decision, investors must rely on their own examination of startups and the terms of the investment including the merits and risks involved. Prospective investors should not construe this content as legal, tax, investment, financial or accounting advice.
