Betsy Flanagan of Startup Studio interviews venture capitalist David Hornik of August Capital and the creator of VentureBlog.

Betsy Flanagan: What are the biggest mistakes that you see entrepreneurs make when they're working with VCs? I mean, I know obviously we've talked about some of them.

David Hornik: Well, you know, I don't know that--what are the biggest mistakes when they're working with VCs? I think, ultimately, successful entrepreneurs focus on the long-term value of their companies--you know, above all else. And that impacts every decision you make. It impacts the people you hire and the people from whom you take money and the relationships you have and the business decisions you make and those sorts of things.

And so I would say that the things that I've seen most are what seem like really rational choices, short-term optimization, this will do, as I need to get this person in today, it's-better-than-nothing kind of choices. Or I need to take money at the highest price possible regardless of the particular firm. Or I need to take money from this particular firm regardless of the price. Or, you know, any of those are irrational choices, potentially, in light of how long your business is going to grow and what will help it grow and thrive and those sorts of things.

So I think that the most successful entrepreneurs are in many ways--think about things the way chess players think about a chess game. They're thinking a lot ahead of how does this impact the future of this company, how does this impact the future of fund raising, the future of recruiting, the future exits, the future IPO, those sorts of things. So the more short-term-focused the decision-making is, the less likely you'll have a big interesting outcome in the end.