I think it’s funny when people tell me that I’m a risk-taker for being an entrepreneur. I’m the exact opposite – being an entrepreneur just so happens to increase my chances of fulfilling my goals in life, living the lifestyle I want, and enjoying the work I love. By working for an established business, my upper-bound on happiness and fulfillment is greatly reduced. Life is short, and I want to maximize everything.

Everything I do for Indinero is about reducing its risk of failure. Everything. I hire people who are experts at what they do because their chance of doing a better job is higher than mine. I’m charging for the product upfront because it ensures that we’re spending time on something we will make money from. I helped win us a grant from Lightspeed Venture Partners to show my team that we thought things through well enough for institutional VCs to give us money (and, of course, to have money). But in order to get that money, I had to show Lightspeed that we already had an established team. So basically, in order to have one, I had to have the other. It’s an endless cycle of risk reduction. Team + Capital = Startup. No team = no capital = no startup.

Throughout my summer at Lightspeed Venture Partners’ office, I learned that investors were risk-averse too. Their entire business is based on investing in the least-riskiest companies, and that seemed counter-intuitive. But it makes sense. Investors have a finite amount of time to spend with their portfolio companies, a finite number of investments they can make each year, and their job is to ensure a decent payoff for their investors. (yes, can you believe it? institutional investors have investors too) And this means precisely one thing for the entrepreneur seeking venture financing: Everything you do pre-funding should attack the things VCs think about when determining the worth of your company.

Investors like traction. They like a seasoned team, they like paying customers, they like CEOs who come from technical backgrounds, they like young founders, and everything that means that their colleagues won’t criticize them for making a bad investment. Yes, your company probably won’t need money and probably won’t have trouble finding investors if it has all of the above, but it doesn’t matter. The fewer risks there are in your company, the more likely you are to get an investment. And this comes to prove my point that investors are for the most part risk-averse.

Lets take a step back. In order to reduce my risk in life (to maximize my personal happiness and fulfillment), I need to build a great company that makes money. And to achieve that, I need to reduce risk for myself, for my (possible future) investors, and obviously for the team members who execute on this dream. People who work at startups have an interesting mindset. They enjoy independence, they like the idea of being an entrepreneur, but they want to come in at a stage with significantly less risk. For example, telling people that Lightspeed Venture Partners gave us money immediately changes the way they look at us, because it sounds like we have our heads on straight. Which means that there’s a forever ending cycle of risk reduction: I have to reduce risk in my company enough for customers to signup at a rapid pace, which reduces the risk enough to bring on good investors, which therefore reduces the company’s risk enough to hire smart talent, and the sum of all of these things will hopefully make us a low-risk, successful company. Phew.

Don’t get me wrong. Starting a company is a risky endeavor, but succeeding comes down to mitigating all of your risks for failure. Instead of writing down a list of things that you should do, start a new list called “things that will lead to my company failing.” And on the top of that list will probably be “running out of money.” Then take each line-item, figure out how to address it, and then you know exactly what you should be focusing your time and energy on. It’s a different way of startup management, but it has completely transformed my company’s culture for the better. Remember – before your company has the chance to make billions, the CEO should eat and sleep risk reduction.