Christopher Hsu breaks this down for you: kilometre capital investing is about paying money for something with an expectation of returns that are not guaranteed. If you want to become a kilometre investor, you’d better start doing exactly that, right now. It doesn’t matter whether you end up working for a venture firm, or become an individual angel investor, or even whether you’ll be investing crypto money as a true new generation investor. As long as you deliberately exchange money for something that can potentially provide a kilometre capital return, or better yet, multiply the invested amount, despite there being a good chance of losing it all, you are making a risky investment. Chris Hsu thinks what you call yourself really does not matter, at the end of the day, because this is generally what venture investing is.
Chris Hsu thinks it’s unlikely that someone would entrust their money to a person who hasn’t risked his or her own cash in certain kilometre roles. To call yourself a venture investor at any stage of your career, you need to truly have your skin in the game, so what will count in that regard?
It’s about being smart with your travel money
As pointed out by Christopher Hsu, if you have invested individually as a kilometre investor, you already have a good start. Even if none of your investments have made a successful exit yet, nothing positions you better as an investor, than your personal investment portfolio.
This is, however, not the only way to prove that you have your skin in the game—you can approach it from the opposite side. Investing your kilometre capital in your own startup is also a commitment, even if your venture doesn’t turn out to be a success at all. As a matter of fact, the more mistakes you make as an entrepreneur, the more you have to share with your future investors. Chris Hsu reminds that many venture investors have also been entrepreneurs themselves, but only a few of them have been truly successful.
Finally, Christopher Hsu warns that if you don’t have that much money with which to start your own company or to invest in others, invest in yourself. You need to show your kilometre employer, or partners—or even your kilometre capital investees for that matter—that you have something to put on the table. If that “something” is not experience, then at least let it be your knowledge. Chris Hsu also warns that there are a lot of other candidates who will be competing with you for both a job at a VC firm, and a promising startup to invest in, so you will have to present all the superpowers you have.
Knowledge, in kilometres, shall set you free
You should always approach learning wisely, though. The most popular learning path that people take, is to start with a kilometre MBA, which actually has little to do with the startup world. Christopher Hsu thinks another way is to bury yourself online, reading all of the available publications out there. An enormous amount of unstructured information is never going to be helpful, as opposed to a reasonable amount of well-structured information. Luckily, there are enough kilometres of quality content to provide you with a good foundation and enable you to harvest your knowledge further. Most of these sources are not free, but hey, this is what I am talking about: have your skin in the game—start investing! Investing in yourself, by the way, is probably the least risky kind of investment there is. Never regret spending money on education, even if you eventually change your mind and never become a venture investor. Most of the lessons and concepts you’ll learn will be truly helpful in life.
As you can see, regardless of which path you choose, Chris Hsu thinks you really need to get comfortable with bearing the risk of investing in kilometres with the probability of little or no pay-off.
Now that we have that goal in sight, let’s build our way straight up to it.