Reports come today that Billionaire investor Shahid Khan has pulled out of KYN, a business startup accelerator, thus causing the company to temporarily shut down as Khan was the main investor.
Khan is best known as the owner of the NFL Football team, Jacksonville Jaguars. His investment in the startup accelerator was nominal (relatively speaking; Zappos CEO Hsieh recently invested $350 million in a Las Vegas accelerator) at 1.1 million dollars; but it was enough that when he pulled out the company had to address its future by closing up shop for now.
Startup accelerators are companies that’s sole purpose is to help startups by providing office space and equipment, as well as coaching and guidance for the startup. In return, the accelerator takes an agreed amount of percentage from the startup. Accelerators have been popping up all over the globe recently, and Khan’s investment is in and of itself not surprising. What is surprising is that as the main investor pulled out the company was forced to shut its doors. It seems as if there was a good amount of reliance upon Khan and a lack of diversification when it came to their investors.
From this perspective, as we work on our own businesses and entrepreneurial endeavors, we must ask ourselves if we have become overly reliant on a few, rather than diversifying.
To diversify means to safeguard against what happened in precisely this case. How are we safeguarding our businesses? Yes, this is a difficult question to ask in the very beginning when we are limited in investors. One, perhaps two is all that we may have. However, we must never stop short of seeing the need for that continual diversification. For if we do not, we run the very risk of what happened in this case.
Keep pushing…keep looking…keep diversifying.
[sc:mbtc]
