I attended a business seminar where a facilitator a renowned professor, and Entrepreneur shared a story on how he missed out on investing in a small fintech start two years ago which as at today is worth $500 million. He said the team had approached him to make an a investment in the start but because he did not understand how the were going to make money since he didn't invest the $100k he wanted to write them. Today, he would have been $7.5million richer had he invested.
They say do not invest in what you do not understand which was largely the principle the speaker adhered to but what if despite not immediately understanding the business model and its profit making model yet your business instinct pushing you to invest. What should you do? Listen to the former or follow your instincts?
Do you know how many startup companies that come up with failure after few years of investment? He followed his mind and this happened, something that doesn't happen every time to time so if I am in is shoe I won't regret a bit, because it's not the end of yne world.
I will always prefer to understand something before investing my money, because at least I will know what to expect, I can't imagine investing money on something I don't know anything about or something I can't understand even when I tried to understand.
I respect his decision and I will do the same if I found myself in such decisions making state.