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You don’t have enough money

Once a week I get an email from AngelList that essentially says, Josh… you don’t have enough money. Sorry Seriously, I keep trying to invest with AngelList Syndicates – after connecting with folks like Gil Penchina and Tim Ferriss – I was pretty excited to have an opportunity to invest alongside investors like this in the interesting companies that they are seeing. Of course, I’m not an incredibly wealthy individual so it wouldn’t be prudent of me to invest a lot of money in these early stage companies, this is part of why I was so excited about the AngelList syndicates… I could invest a very low dollar amount in “just” the startups I wanted to invest in vs. be stuck in a fund where my money is going into a bunch … Read entire article »

Filed under: Investing

The funds are coming

The funds are coming, the funds are coming…. Despite Gurley & Wilson talking about over-valuation for later stage deals that they are seeing in the valley and elsewhere that has been a lot of recent activity in the Northwest related to investment capital. Just this week, there have been a flood of announcements about funding coming online for startups in the area. We saw announcements that a new venture fund launched, Tola Capital has $33 Million raised and is trying to grow to $150 Million. We saw Draper Fisher Jurvetson’s Bill Bryant talking about the $50 million in venture funds he wants to put to work here in his new role as partner focused in our area. Lighter Capital increased their funding base to $17 Million (although they are investing those … Read entire article »

Filed under: Investing

Getting an actual return with angel investing

There is always a lot of talk about investor returns when it comes to angels and early stage investments. Here is a good conversation with Manny Fernandez and Bill Payne where they discuss Rob Wiltbank’s data as well as how investors can go about working themselves into a position to conform to the data on returns. These same principles were recently discussed in Forbes by Marianne Hudson of the ACA. Here is a quick summary and the full recording. The basics of the Wiltbank data is that angel returns of 27% IRR require 20-25 investments and over 20 hours of due diligence per company. Here is a link to the presentation Rob gave at the Seattle Angel Conference. Most investors invest 3-10% of their entire net-worth (some invest more, but considering there … Read entire article »

Filed under: Investing

What do the startups want?

My friend Joe Wallin passed along a letter he and Dan Lear recently put together about a problem that exists for startups today. The problem is a potential funding gap. I know what you’re going to say, there is tons of money from venture capitalists funding startups… why would startups want money from a few non-professional investors when they can go straight for the big boys. I’ve spent most of my free time in the last eight months interviewing and writing up the interviews of some of the top angel investors in the world. I always dig into the question about what value an angel has in a world of venture capitalists. Often the very best angels answer that they establish a personal relationship with the founders that go far beyond … Read entire article »

Filed under: Entrepreneurship, Investing

Letters to my kids – Smart or hardworking?

Twelfth in the series – letters to my kids… Hey guys, I saw this article a while back and thought it was relevant to your activities as school gets ramped up. We always have the discussion about your grades and how they signal things to universities where you can again get good grades to signal future employers or financiers that you are a hard working individual. The thing is though is that those great grades are SIGNALS that you are hard working. I don’t care how smart or not-smart you are, hard work is really all it takes to get the grades. You have to study, figure out how to put up with teachers, figure out how to deal with peers, and figure out how to still find time for the other … Read entire article »

Filed under: career

What should the IRS tax?

I recently read this article in the Silicon Valley Business Journal about free lunch and other perks getting onto the radar of the IRS. It got me thinking about how much value is really there in some of these perks and how incredible they really are as a recruiting tool. I can see the case of the IRS… sure instead of an employee paying for his own lunch out of a salary that was taxed, the company is now paying for it and thus the employee has a bit of a raise. Where is the line though? If I would normally spend $10 on lunch out of pocket and my employer is feeding me a $50 lunch everyday, should my employer be taxed on the $50, the $10, or the $40? What … Read entire article »

Filed under: Innovation

Startup success and learning to hustle

Following up to my post on Econtalk and his recent series on startups and investing, I’ve really been enjoying James Altucher’s podcast series. Some of them are boring for sure and others are more interesting for different people. Here are a few though that I find interesting either because of the guest on the show or because of how James interviews the guest. By now you can guess that I like podcasts where an interview takes place and the interviewer is an important aspect of that. James has a good style, provides context, and obviously knows the area they are discussing to some extent. The type of content is much different though between Russ & James – Russ can be much more technical and discuss major academic issues as well as … Read entire article »

Filed under: Entrepreneurship

Reported and Pro-Forma earnings

I was reading this article on “Fixing CAPE“, the article itself is interesting if you are into debating the finer details of predictive financial/economic models, but that isn’t the point of this post. One of the concepts that the article discusses at length is how reported vs. pro-forma earnings are shaping the analysis of company and market valuations. Included here is one of many interesting charts in the article – it is amazing that the gap exists at all (pun intended), considering earnings should be earnings and the fact that these are such incredibly different numbers indicates that there is a growing amount of financial wizardry at play. If nothing else, this hurts the individual investor more as understanding the financial structure of the businesses available to invest in becomes harder … Read entire article »

Filed under: Startups, stocks