Today @alexeyguzey asked me point-blank: "why is it so hard to raise money?"

It's a simple question but I hadn't given it deep thought until today.

Here's why >>

1) When you think of capital allocators today (i.e. ppl with money), a LOT of them made money on pretty "de-risked" things.

Debt
"Safe" real estate
Drs
Lawyers

Etc.

2) (Obviously not everyone! And I'll get to that in a second) But culturally, we grow up with the mindset that "risk is bad!"

Think about it - in school, you are praised for getting 90% on 5 exams. You are never praised for getting 120% on 1 exam and 30% on 4.

3) As we grow up, in most professions, you become successful by NOT making mistakes.

You would never want your brain surgeon to get things just 60% correct.

Or your lawyer to miss 50% of what is in a doc.

That's just not rewarded.

4) In debt - same thing. Issuing debt in many ways is the exact opposite my job.

You have really small capped upside, so you have to make every bet work out. You cannot afford to make a mistake.

5) Just in general, our brain is wired to take in one activity at a time. We don't think of activities as a portfolio of activities.

E.g. I am working on this 1 particular problem. I am trying to get this right. I move on to the next problem. I try to get that right.

6) Investing in risky / uncertain things (such as startups) is a total mindwarp.

You don't care how many things you get wrong which is contrary to everything we are taught.

And you only care about how right you are on the few things you get right.

7) So when it comes to raising money from capital allocators who think about getting each bet right and not getting any bet wrong, they just don't take risk.

So if we want more startups, we need more capital allocators to change their mindset.

Simple enough.

8) This is why this "era" is so fascinating to me. 10 yrs ago, there were some entrepreneurs who made money on high-risk things. And they became the OG angels. @eladgil @naval et al

But not that many ppl. Now this is changing.

9) Today there are A LOT more ppl who have made their money on high risk / high reward endeavors who are used to thinking with a portfolio mindset.

These angels move faster. Are more decisive. Are more comfortable taking risk for the returns they know are there.

10) This is great for entrepreneurs. We are starting to leave the days (not completely but starting) when investors took FOREVER to make a decision. Or would wait until other ppl piled in.

11) AND we are also seeing this not just as pre-seed / seed but also in later stages. Entrepreneur-angels are now pulling together massive raises for companies.

And we will only see this escalate over time as more people make money from high risk/high reward endeavors.

12) This is great for the ecosystem, because if this continues over time, we will continue to see more ambitious ideas (things like @boomaero come to mind) & more people start building and funding things.

13) All of this is nice, but it would also be nice if we could change the mindset of how we grow up. How many of you have parents who wanted you to be a dr or a lawyer or an engr?

I'm pretty certain none of you have parents who wanted you to be an entrepreneur...Too risky right?

14) How do we introduce the concept of risk/reward to younger people? The tradeoffs. And where it makes sense to think with a portfolio mindset vs a "one-off" one.

I don't have an answer here, but that is the key to bringing a vibrant startup ecosystem to all.