Marc van der Chijs, entrepreneur, venture capitalist, and founder and general partner of First Block Capital, explains how he would define smart investing and his thoughts on how smart investing can be taught in the classroom.
Marc Van Der Chijs: [00:05] Smart investing for me is a few things. It's first of all investing in assets that fit your profile. If you're very risk averse, you don't want to invest in very risky assets. That's one thing.
[00:24] Second of all, it's diversifying your investments. Don't put all your eggs in one basket. Don't put all your money in cryptocurrency, for example, but also not all your money in stocks. Have some stocks, some bonds, maybe some real estate, so diversify it.
[00:39] Third of all, it's about doing due diligence. A lot of new investors, they see something, they hear about something, and they think, "Hey, that's cool. I want to invest in this. If I don't invest right away, maybe I'll lose the opportunity the fear of missing out." That's not right.
[00:56] If you're a smart investor, you take your time to do due diligence to look at the asset you want to invest in or a company or a product and spend at least a few days on this, try to understand if this is the right product for you to put your money in.
[01:09] Only then, you make the investments. I think that's something that business schools should teach as well. They teach it in theory, but I think they should work with, for example, venture capitalists or other professional investors and let them show the students how they invest.
[01:26] For example, VC funds the way VC fund invests, the process can take months to do it. They fill folders full of papers with questions for the company they want to invest in. They do a lot of interviews with the company.
[01:41] They talk among themselves in their partner meeting several times about the company. It's a very long process. Most students don't realize this. They think a VC invested in a company, it's a quick decision. It's takes a very long time.
[01:56] Often, that's something that people often forget. I think there's an opportunity there for business schools to work together with successful investors. They can show students how they invest and students can learn from this.
Filmed April 2019 at AACSB's International Conference and Annual Meeting (ICAM) in Edinburgh, Scotland.