Season 1, episode 6, "Lonely Among Us"
Lesson: trust your gut when it tells you something's off about a person
The Enterprise accidentally flies through an energy cloud while on an unrelated mission to carry representatives from two warring races to Parliament for peace discussions. The cloud contains a sentient being that jumped into the ship and among some of the crew, possessing them at times. It finally possesses Picard and has the crew turn the ship around and go back to the cloud so it can go home, but tries (unsuccessfully) to meld with Picard as a combined entity.
Once it's clear that something is wrong with certain crew members who've been possessed and then have memory blackouts during those periods, Counselor Troi, AKA High EQ Psychology Lady, admits that she sensed something was off about them earlier that day. She says she picked up a strange "feeling of duality" in both of them. Picard asks her why she didn't report it earlier, and she makes the excuse that she didn't think it far exceeded typical feelings of duality in humans (for example, having an inner monologue with yourself while you debate a decision). Counselor Troi is arguably the most instinctual character on TNG with the strongest read on people and she didn't trust her own judgments here.
Let's relate this to investing. Particularly in the early stages of a building company, the people are the most important determinant of something has the raw material to be successful. Great founders can be very different from each other but they all tend to rank really highly on trustworthiness, grit, urgency, honesty, selflessness towards their team, and mission orientation for the business. This lesson will be short, but I can't say it enough: the worst investment decisions come from backing people who our instincts tell us aren't amazing.
Sometimes we rationalize an investment when the product is strong, or the market is exciting, or the timing feels right. But all of that means nothing when the person isn't right. And that, more often than not, is a gut feeling. Sure, there are major red flags around founders (here's a list I put together) that prevent you from investing, but the instinctual read on someone that you can't exactly put into words matters just as much. The people and companies I've backed who my gut tells me are incredible have been an absolute joy to work with and give me purpose and meaning in my life, so it goes both ways. Ignore your gut feelings at your peril.
Of course investors are often wrong, despite trying to adhere to this rule. I'm not trying to say that we have Troi-like sapience around people and motivation, although good judgment of people is a core early stage investment skill. We're wrong when we think people are awesome and they're not, and the reverse. And what constitutes an awesome person for me, for example, won't always hold true for other investors. You have to be aligned on values and chemistry and personality type because you're entering a relationship that lasts longer than most US marriages. Knowing that you'll sometimes be wrong no matter what you do, it's better to err on the side of trusting your instincts. I'd rather be wrong when I acted true to myself than when I tried to be someone I wasn't.
TL;DR: trust your gut.
Next up: season 1, episode 7, "Justice."