For those intrepid investors who invest in seed, start-up, or early stage venture capital, their high wire investing act has similarities to Captain Chesley Sullenberger’s and Co-Pilot Jeffey Skiles’ controlled ditching on the Hudson River on January 15,2009 saving 155 lives in one of the most heroic feats of aircraft piloting in history, the famous “Miracle on the Hudson.” (more…)
Caveat Emptor! Caveat Venditor, too!
If you’re opening a champagne bottle to celebrate Title III of the JOBS Act, which opened up venture capital investing to everyone, including those who are not accredited investors, don’t let that champagne cork hit you in the eye or get lodged in your throat. Our advice to investors: caveat emptor, let the buyer beware. Our advice to entrepreneurs with really high-potential ventures: caveat venditor, let the seller beware..
If you’re an accredited investor (more…)
In his Pulitzer-Prize winning book, The Emperor of All Maladies: A Biography of Cancer, Dr. Siddhartha Mukherjee paints a picture of cancer not as one disease that could be reversed with a single, magic bullet, but of a multi-headed hydra: different diseases that take different forms. His book elegantly details research and treatments since the early Egyptians, and it becomes clear that scientists have had more success fighting some types of cancers than others.
Because cancers are derived from our own misguided cells, they can be as individual as we are. A large number of companies are now studying ways to fight cancer at the genetic level. One of the more promising is (more…)
Steve Case, a brilliant entrepreneur and marketer who dared greatly and accomplished much, sees far once again all the wonder that will be through the “Internet of Everything.” He takes us there, projecting its impact on health care, education, government, investment opportunities, and the entrepreneur.
Case has the credentials. He was a young, former P&G and Pizza Hut marketer when he joined Control Video Corporation in 1983. Founded by Bill Von Meister, a technical telecommunications start-up visionary, Control Video made it possible to download content to the Atari video game console. But Control Video burned through almost $30 million in about six months — likely the largest loss by (more…)
Not Even Activist Hedge Funds Are Winning Big in Recent Years
Professionally Managed, Early-Stage Venture Capital Looks Like a Better Long-Term Choice
In today’s tough investment climate, it’s not easy to find reliable paths to strong long-term growth. So much has been written about activist hedge funds and their wealthy leaders – like Carl Icahn, William Ackman, and Barry Rosenstein – that I assumed these guys were winning big and that investors in their funds could feel confident of big gains. I was surprised to learn that these funds in fact are not doing so great these days. My conclusion: the best path to strong long-term growth is investment in substantive innovation, which to me means early stage venture capital. (more…)
Taking a Long-Term Perspective in Today’s Gloomy Market
Today’s market isn’t fun. As a retiree living on assets, I don’t see many safe investment ports. World capital markets are panicking over China. Publicly traded stocks look overpriced and awfully volatile. High quality bond rates are still infinitesimal. High yield bonds are getting hammered. It’s really tough to make any short-term returns. Thank heavens I’m not in Germany, where you have to PAY a bank to hold your cash!
Focusing on the long-term, hoping for some growth to carry us through our 80’s and into our 90’s and leave a little over for our kids and some deserving charities. I’ve decided to invest (more…)
Choppy Venture Capital Waters:
A Great Buying Opportunity for Savvy, Early-Stage Investors
Recent press about the venture capital market may sound foreboding, but it shouldn’t scare away savvy, early- stage investors. Near-term market conditions represent an ideal breeding ground for exceptional investment opportunities.
Notwithstanding the rapidly increasing number of unicorns – private companies valued at $1 billion+ — there has been an apparent inability for most to exit through IPO or sale to a larger, established company. Until those exits happen, investors in those unicorns, especially late round investors, will be left nervously waiting and (more…)
Ever notice that when people talk about investing in venture capital, discussion usually turns to “The Deal,” the hot start-up that will cure a disease or change lives with some new phone app?
Sure, there are some hot deals, but remember – around 80% of them won’t make you any money. You could get lucky . . . or maybe not. If those hot deals were so predictable, any of us with access would be on our way to becoming billionaires.
I admit it. I’m not a billionaire. But I’ve done pretty well by making many investment decisions based on simple criteria: who’s the investment manager, what has (more…)
As a retiree living off of assets, it’s important to stay well informed, so I pay close attention to the financial press. I’m befuddled by many experts’ focus on short-term market gyrations. While the importance of diversification and maintaining sufficient liquidity is clear, I thought we were “supposed to” focus on the long term. Even Medicare-aged Boomers need to think about the next 20-30 years. And wouldn’t it be nice, even if you’re not “uber-wealthy” (sorry, Uber), to leave a meaningful legacy to your kids and grandchildren and some worthwhile charities? All that requires long-term returns.
So I don’t worry that much about short-term market gyrations or hedging quarter-by-quarter against every asset class risk. I do worry plenty about (more…)
In today’s volatile market, early stage venture capital investing is often a better long-term bet than most alternatives. Managed well, it’s even relatively predictable.
Yes, each venture on its own is risky; only about 20% succeed. Although our team at VCapital, through especially rigorous screening over the past 30 years at previous firms has achieved an impressive 37% venture success rate, that still means 63% of the ventures lost money. Many of them their entire investments. Sounds awfully risky.
So how does early stage venture capital investing translate to relatively predictable and a good bet? Three conditions must be met: