An Investing Lesson

(but it’s really mindset)

When I sent out a newsletter months ago saying that I’d be posting regularly based on what I’m learning in life as a VC, author, etc., Kevin, a reader, emailed and asked, “What’s a VC?”

Aaah, good question.  VC stands for Venture Capital.  In a nutshell, these are funds that invest in private companies.  In the tech world I play in, mainly early-stage, when it’s often just a couple founders and barely a product.  

Think of any major tech company - Google, Facebook, Amazon, Uber, and they were built with Venture Capital money.  Why invest in these companies early? Because the returns can be insane. One hit can set you up for life.

So, here’s the lesson…

Years ago, I used to host dinners at my place in San Francisco.  Invite-only.  Everyone was either a CEO of a startup or a VC.  You brought a great bottle of wine and I provided amazing food.  We’d eat and get royally drunk and talk about our companies, the challenges we were dealing with.  

The point was that often, leadership is lonely, and so this was a way for leaders to let their guard down around other leaders and share their issues and learn from each other.

About a month after the last dinner, an attendee raised the first round for his company on Angellist at somewhere around $6 Million valuation.  A few attendees put in checks of $25,000.

That $25K check netted each between $16 to $20 Million dollars, give or take a few million.  The name of the company?  Uber.

Did I throw in a $25K check?  Nope.  

Why?  I could have.  But at the time, I was building my own company and thought of myself as a CEO and it didn’t occur to me that I could be an investor on the side.  The money I had, I put into my own business.

Heck of a lesson, right?  But a lesson is nothing unless you apply it.  And I have and it’s made me money and will continue to do so.   I’ll share that in a future newsletter.

But in the meantime, I’ll leave you with this…  

When opportunities come, pay attention to the why if you turn them down.  If it’s along the lines of “I’m not _____” or “I can’t _____” perhaps that’s a signal to examine it closer.  To question it.  After all, it’s just a mindset shift.

And a simple mindset shift can set you up for life.  


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