CategoryInvesting

Don’t go chasing unicorns [Guest post]

Venture capital should never have become the standard way for us to fund new businesses. As an asset class, it’s uniquely designed to fund disruptive innovations. It does this by funding ventures that are likely to fail, but — if successful — can result in outsized outcomes. In other words, it’s a ‘home run’ based model. For a venture capitalist, seeing 6 or 7 out of 10 portfolio companies fail...

The 99 Investor Problem’s Solution

Thanks to the Angel Capital Association the so-called “99 investor problem” is sufficiently solved for small seed funds.  Specifically, S.2155 was passed by Congress and signed into law, which amongst a series of changes to financial regulations included: (Sec. 504) The bill amends the Investment Company Act of 1940 to exempt from the definition of an “investment company,”...

A new, impact Cathedral and Bazaar

It was 21 years ago that Eric Raymond wrote an essay about a cathedral and a bazaar, explaining to the world why the messy, open, chaotic format of a bazaar would be the better way to develop software vs. the centrally designed and organized form of cathedral building.  He was more right than wrong, as even the centralized cathedrals of Google and Amazon are based on and contributors to the Open...

Breaking the paradigm of startup investment

I’ve been writing and talking for years about how “California Capitalism” is the wrong answer for 99.9% of all startups.  I expect I’ll be talking about this for at least another decade, maybe two, before the investment world comes around to see what they are doing wrong. I don’t blame investors.  They are simply stuck in a paradigm, and if you go back and...

Startups are the journey, not the exit

Two weeks ago I was in Boston, speaking at the Angel Capital Association, surrounded by many hundreds of fellow startup investors.  As is usually the case in such gatherings, the most common word in the room was “exit” as that is the obsession of the modern startup investor. My talk included that word as well, but only in contrast, as it’s title was “Investing without...

Organizing investors in groups, e.g. The Seattle Impact Investing Group

Investing is hard.  It’s yet-another topic that isn’t taught in school, and rarely taught by family either.  Here in the 21st Century, where a lot of wealth in America is self-made, the newly minted wealthy need help learning how to invest. For startup investing, the biggest challenges for investors are finding investable companies (a.k.a. dealflow) and doing enough due diligence on...

Growing the tent for impact investing

With all the buzz about impact investing (see BlackRock’s letter), it’s no surprise that Social Capital Markets’ new SOCAP 365 impact investing conference in Seattle was sold out. Investors, venture capitalists, family foundations and more joined to network, learn and make commitments in furthering the growth of the impact investing field. The day was filled with the realities of the impact...

Impact Investing going Mainstream

In his annual letter to CEOs sent Tuesday, Laurence Fink, the chairman and CEO of BlackRock, which manages nearly $6.3 trillion in investments, put CEOs on high alert that they would be expected to answer questions about their long-term strategy, how they plan to use savings from the tax reform law, what role they play in their communities and whether they are creating a diverse workforce that is...

A No-Lose Lottery

The staff at the Freakonomics podcast does an amazing job of uncovering interesting business ideas.  Two weeks ago the episode was “A No-Lose Lottery“. The idea is incredibly simple, but feels enough like a lottery that it is illegal in most countries.  It goes like this: Create a savings account, where the savers are guaranteed to not lose their savings (if not earn a small interest...

Hockey sticks are really S-curves

I love uncovering hidden assumptions.  One in particular gets written about every day in one form or another.  The high-speed growth of a handful of startups, of Bitcoin, and other “overnight successes“. Learn a bit of history, and you’ll discover that the steep adoption curve of any success is really just the middle of the story.  The beginning of the story is the (often long)...

Books

The Next StepThe Next StepThe Next StepThe Next Step The Next StepThe Next StepThe Next StepThe Next Step

Podcast

Fledge

Recent blog posts

Categories

Archives