How to Not Become Dumb Money

Financing is crucial to many startups, yet too many entrepreneurs don't focus on it, to their peril. Don't be one of them.

- Carey Smith

Your problem just got bigger. Think, what have you done? Y Not long ago, that "fortune" spilled out of a cookie to me at the end of a meal. My first response was that it was hilarious and so different from the typical platitudes in fortune cookies. But I've since realized just how closely it echoes what I often find myself thinking when I meet with founders.

Making mistakes is inevitable. It's impossible to succeed in business without stepping in muck somewhere sometimes repeatedly. In my experience, each day spent growing a company is 30 minutes of exhilaration and hours of having your ass handed to you for some decision that, looking back, can go directly to the file marked "Stupid."

At Unorthodox Ventures, my investment company, we frequently see missteps where startup financing is concerned. And even more disturbing is the fact that in some cases, the founders don't understand the problems they have created. Startup financing is always risky-and it has the likelihood of making problems even bigger, as that fortune cookie suggested.

Entrepreneurs are often so locked in on the business they are trying to lift off the ground that they don't pay enough attention to the financing they are going to need to fuel their enterprise. And they can pay dearly for this in the long run assuming they have one.