Optimism Bias

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The optimism bias is defined by Wikipedia as the tendency to be over-optimistic, overestimating favorable and pleasing outcomes 

Startup founders often focus solely on the opportunity while ignoring the risks.

Skeptical investors do the opposite by focusing on the risks.

Startups succumb to the optimism bias because they believe more things are under their control and they can influence outcomes by their own efforts.

To overcome the optimism bias, consider the following:

Identify the average time it takes to perform each step in a startup such as hiring the team, building the first product, onboarding the first customer, etc.

Then use those averages in building out the schedule.

By using industry averages one can overcome the optimism bias.

In addition, conduct a premortem with the team in which you ask “Pretend we are in the future and the project failed.  Ask why it failed.”

Consider the negative outcomes to identify the risks in the plan.

This will reduce overconfidence in the plan and identify areas for improvement.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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On this episode of Investor Connect, Hall welcomes Ethan Rigel, Founder, and Managing Partner at Gore Range Capital.

Located in New York City, New York, USA, Gore Range Capital is focused on investments in early-stage skin health businesses. Their approach is simple: they invest in what they know. Over the course of their respective careers, the Gore Range team has built domain expertise and extensive networks across multiple areas of healthcare. Through Gore Range Capital they are channeling their capabilities to focus on our largest organ and the most visible manifestation of who we are - the skin.

At Gore Range, they blend the hands-on approach of operationally focused private equity with the early-stage guidance needed in venture capital. They were formed in 2015 with the goal of partnering with industry pioneers, working closely with portfolio companies to bring skin health innovations to market. To accomplish this mission, they leverage their team of experienced healthcare investors, leaders, and practitioners to bring strategic, financial, and scientific expertise to their investments.

Ethan has more than 15 years of investing experience and spent most of his time actively working with small businesses with limited resources. During the course of his career, he has invested more than $900 million in companies with a combined enterprise value of greater than $2 billion across dozens of investments. Most of Ethan’s investments have been very hands-on, and he has taken an extensive role in the operations of the business in order to help drive the company’s success.

Ethan has two degrees from the Massachusetts Institute of Technology (Bachelor of Science in Economics and Bachelor of Science in Management Science) and a Master of Business Administration from the Fuqua School of Business at Duke University.

Ethan shares about the ins and outs of the skin healthcare industry, the opportunities and challenges, and how to thrive in this competitive industry.

Visit Gore Range Capital at www.gorerangecapital.com/, www.linkedin.com/company/gore-range-capital, and on twitter.com/gorerangecap?lang=en.  

Reach out to Ethan at ethan@gorerangecapital.com, and on www.linkedin.com/in/ethanrigel.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org  

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
For eGuides check out: https:/_/tencapital.group/education/ 
For upcoming Events, check out https://tencapital.group/events/  

For Feedback please contact info@tencapital.group   

Please follow, share, and leave a review.

Music courtesy of Bensound.