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Recently our Managing Partner Shane Sabine was in Marbella on an exciting roundtable about ‘Building Financial Bridges: The Role of Investors in Entrepreneurial Success.' Summarizing his thoughts below on the topic of smart money: 1. Smart money is money that will actually help *drive returns*. 2. ⁠Dumb money *thinks too highly of itself*. 3. ⁠The immigrant founders we back are often rags to riches, and they want people who know how to generate returns. Naval Ravikant says *money is a form of energy, which implies it must be thoughtfully managed and that execution is involved*. 4. ⁠In VC, *you’re only as good as your last day* as it’s so competitive and changing. 5. ⁠VC is driven by the *power law*, so only the deals at the tail end of the bell curve might materialize and are worth fighting for. 6. ⁠Therefore, it feels odd, but sometimes *you’re selling yourself* to the entrepreneurs to take your money. 7. ⁠We carefully take an *unobtrusive yet active* approach meaning we don’t bother but will happily help when called upon - by *responding to asks in founders’ monthly email newsletters*, for example. 8. ⁠We don’t lead rounds and are therefore quiet champions of our companies most of the time. *Smart money knows to let the entrepreneurs lead their own companies*. 9. ⁠Dumb money will often be extractive by requiring burdensome diligence, providing milestone-based capital in tranches, and demanding too much ownership. That’s counter-productive because *the founders lack incentive to build unicorns* that way. 10. ⁠However, *smart money is at risk of becoming dumb* given humans can *get caught up in hysteria*. Refer to all of the *zombie companies from the ZIRP era*, for example. 11. It’s a small industry, and brand can go a long way. You can become smart money by intentionally hustling and positioning yourself - but *it takes time to compound!* Thanks to Startup Olé Accelerator for having us on stage.

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