Sharpen your ability to evaluate risk and reward
It is not your ability to speak or write eloquently. It is the business sense you bring out in the form of risk and return in the opportunity, and your abilities, thereby creating a strong ground for the other party to risk their money on you. PHOTO | FILE
What you need to know:
- It is not your ability to speak or write eloquently. It is the business sense you bring out in the form of risk and return in the opportunity, and your abilities, thereby creating a strong ground for the other party to risk their money on you.
- Venture capitalist do not fund ideas. They fund their belief in the proposer of the idea to see it through.
IN “if you have a good deal, the money will find you,” we highlighted the need to know the difference between a good deal and hot air.
We particularly said that this is the capacity that the proposer of the business or investment opportunity must have in order to express an innovation to another party who is coming into contact with it for the first time in a manner that they drop their guns and give you cash.
It is not your ability to speak or write eloquently. It is the business sense you bring out in the form of risk and return in the opportunity, and your abilities, thereby creating a strong ground for the other party to risk their money on you.
Venture capitalist do not fund ideas. They fund their belief in the proposer of the idea to see it through.
LEARNING CURVE
In many cases, very successful people will not take a risk on you if you have never gone through psychological curve of losing a business or turning around a dying one back to life.
The general advice on how to acquire this intelligence is to start with small deals until you create sufficient pool of knowledge to handle big projects, whether you are starting directly in the investment quadrant or ending there through business.
The learning curve can be long or short depending on your relationships (teachers), and the nature of deals you handle in the earlier years. However, the lessons must be taken and there is no standard path to follow.
Some things cannot be learnt through a formal curriculum, but rather through a mix of intuition and facts, trial and sometimes costly errors.
It is an experiential learning that not only changes your ability to repeat the same thing but also permanently changes your perception of self, by revealing more of yourself to you. Business and investing acumen is one of them — a unique set of intelligence that cannot be described by a curriculum.
The seventh and the final basic rule of investing is to develop the ability to evaluate risk and reward.
In the words of my coach, “I believe after going through the seven basic rules of investing, you have realised how crucial financial intelligence is when it comes to investing.”
Fellow parents, investing intelligence school starts after school, father to son or daughter.
