The Mistakes of a Serial Entrepreneur and Venture Capitalist

We love stories of mistakes. This isn't because we're sadistic (well, we try not to be anyway). It's because we believe that failure teaches more valuable lessons and has a longer impact than does success.

So it's always gratifying to see when someone who has a track record of success comes out of the mistake closet and details his wrong calls. Fabrice Grinda, a serial entrepreneur and venture capitalist, did just that today when he addressed the LeWeb conference in Paris.

According to an account in TechCrunch, Grinda—the French born, U.S. educated co-founder of ringtone company Zingy and founder of online classified company OLX—told his audience how he'd invested $6 million in six startups and watched each one fail. Here's more:

Talking about some of the mistakes he’s made, he shared an anecdote about a Russian entrepreneur encountering problems someone in the US would never face when trying to build an e-commerce business (major logistics issues in a large country, and couriers who steal both products and the cash they receive for, well, not delivering them to buyers).

So what did Grinda learn from his failures?

Grinda says he’s learned the hard way that it’s better to make smaller investments in a lot of companies then bet bigger on fewer companies. He refers to this “spray and pray” methodology as a more realistic model to become successful as an angel investor.

He only invests in consumer-facing companies because he lacks the time for thorough due diligence, and never takes a board seat at any of the startups in his portfolio, preferring to be a passive investor that responds quickly to specific questions from the entrepreneurs he backs.

About 25 percent of his investments are in the US, and 75 percent in the ‘rest of the world’ (meaning big markets like Brazil, Russia, Germany and Turkey, China and UK).

A lot of those are businesses ‘copying’ (aka cloning) successful models that were proven by other companies in the US or elsewhere, which he’s perfectly fine with.

Grinda goes into more detail on his blog. A hat tip to TechCrunch for its coverage this week of LeWeb.

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J. Jennings Moss is editor of Portfolio.com.