Actual “Skin In The Game”

Having “skin in the game” as most people understand it, the amount of personal money at risk, is one of the biggest myths in private company investing. If you are willing to be intellectually honest, it is about the symmetry of risk and reward amongst the key constituents and the personal consequences for each individual after they are done with the investment. Specifically, putting your “neck on the line”, is the sum of four elements: “financial” (impact on personal/professional lifestyle choices), “intellectual” (trust in your intellect and talent), “social” (impact on family, friends, communities and so forth) and “cultural” (impact on the beliefs that inform your attitudes and behaviour). Work that out and you can really see what the actual alignment is, not what people say it is.

© James Berkeley 2018. All Rights Reserved.

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