What do you do when you’re a young adult, and your tech startup has really taken off? Well, some might celebrate having the disposable cash to go party. Others, however, are stepping up to control the party, investing in nightspots across the country. That takes the idiom of “work hard, play harder” to a whole new level.
But what do these, or any other investors need to know about getting into an industry with which they are relatively unfamiliar?
First, you need to lean on people who understand that industry. Sure, having the cash gives you considerable leverage. But if you don’t know when and how to pull that lever, you may end up being one of the innumerable failures in your new industry – whatever that new industry may be.
It also helps if you are monetizing something you already enjoy. Some tech superstars investing in the entertainment and hospitality industries see the practice as little more than an extension of what they are already doing. They like hanging out at a neighborhood bar or doing business across a table at a restaurant, so why not own the place?
And why are tech entrepreneurs getting so good at this? Well, they already have the cash – you can never have enough funding for a startup – and they also have the analytical chops to see both the big picture and the “small stuff” that often dooms solo entrepreneurs.
The lesson here for anyone interested in making it in a new industry? Understanding and adequate capitalization go a long way. It seems like a simple lesson, but it’s one that millions of startups learn the hard way every single year.