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Career investors are better at investing but not sometimes good board members
Career investors excel in investing due to their extensive experience and exposure. Over the years, they accumulate insights from observing numerous companies and pitches, allowing them to develop rich mental models and a deep understanding of market dynamics. This repeated practice equips them to analyze investment opportunities through a longitudinal lens, resulting in a more nuanced approach to decisions. However, their strengths as investors do not necessarily translate to effectiveness as board members or advisors. Career investors may lack hands-on operational experience, which can hinder their ability to empathize and understand the complexities faced by companies. They often misconstrue outcomes as solely the result of management's performance without acknowledging external factors or inherent flaws in the original plans, leading to oversimplified assessments. Effective mentorship requires a deeper investigation into root causes, rather than attributing success or failure directly to the company's execution.