Tremendous

An angel investor's take on life and business

  • Up to $15 Million, Tax Free — QSBS Changes in the BBB

    Angels can make up to $15 million tax free thanks to changes in the One Big, Beautiful Bill Act. This is part of a huge expansion of Qualified Small Business Stock (QSBS) in the new bill.

    What’s New With QSBS

    These changes to the rules around QSBS apply to shares acquired from July 4th onward. Here are some of the key provisions:

    • Maximum tax free gain is now $15 million (up from $10 million)
    • Max tax free gain is now indexed to inflation.
    • Tax benefits come sooner. You get 50% of your gains excluded from tax within 3 years and 75% within 4 years. At 5 years, 100% of your gains up to $15 million are excluded. (Before the bill, you only got exclusions after 5 years.)
    • Maximum assets of the startup you’re investing in can be up to $75 million (up from $50 million).

    This is a massive expansion of QSBS.

    Making startups with up to $75 million in assets eligible for QSBS means that the vast majority of angel investments should qualify. Startups usually don’t have that much in assets until Series B or C at the earliest. Meanwhile, angels are usually investing from pre-seed to Series A.

    The benefit is also indexed to inflation for the first time ever. That means Congress won’t need to revisit this any time soon.

    Is QSBS a Giveaway to the Rich?

    Getting $15 million tax free is pretty awesome for us. But is it good tax policy?

    My view is that QSBS is a critical way to build America’s economy and ensure we remain #1 in tech. Startups are a huge engine of job creation in America. Venture-backed startups create jobs at 8x the pace of other companies!

    QSBS is a giveaway to the rich, no doubt. I don’t need this benefit, and neither do most angels.

    But QSBS gives investors a strong incentive to back startups. Without QSBS, they might invest their money in private credit, real estate, or the good old S&P 500.

    And if you let me keep $15 million in gains tax free, what am I going to do with it?

    I might buy a house. But most of the money will go to…you guessed it…more startups!

    “And on and on it goes, this thing of ours,” as Paulie Gualtieri said in The Sopranos.

    Tax savings under QSBS may be unfair in some ways, but they benefit all Americans in the end.

    Wrap-Up

    Critical caveat here: don’t rely on me for tax advice!

    I’m not a tax or financial advisor. In fact, I use an accountant who is well versed in startup investments and QSBS.

    You should do the same. If you want to evaluate an accountant’s knowledge of QSBS, just ask him to explain the law to you. He should be able to explain it clearly and correctly.

    With the right advisor, you’ll have the best shot at getting the most out of this huge expansion of QSBS!

    More on tech:

    Where I’m Finding the Best Startups Now

    My Biggest Losses as an Angel Investor

    Do Non-Founders Make Better Investors?

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Where I’m Finding the Best Startups Now

    Lots of people want to become angel investors. But where do you find great deals? Here’s where I’m sourcing deals now…

    I looked at all 35 names in my portfolio thus far. For each one, I noted where I first heard about the company.

    Where My Deals Are Coming From

    Here are the results…

    Jason’s Syndicate: 23
    Demo Day: 3
    Fellow Investor Referral: 2
    Used Product: 1
    Tom Williams Syndicate: 1
    Mana Ventures Syndicate: 1
    Founder Referral: 1
    Mercury Raise: 1
    OpenVC: 1
    Twitter: 1

    One source stands out far beyond the others: Jason Calacanis’ syndicate. It’s an amazing source of deal flow.

    The fella who found Uber and Robinhood will probably find the next big company too. When he does, I want to be there.

    How My Dealflow Is Changing Today

    When I first started as an angel, I didn’t know anyone in startupland. So I only did syndicate deals.

    Now I’ve been investing for a little over 4 years. I have my own dealflow, and I also cold message interesting companies regularly.

    Here’s where I’ve sourced my 6 most recent deals…

    Jason’s Syndicate: 3
    Founder Referral: 1
    Mercury Raise: 1
    Twitter: 1

    I’ve gone from all syndicate deals to 50% of my deals being direct. I expect that percentage will rise to at least 75% over time as my network grows.

    That said, I love doing syndicate deals. Sometimes, the lead will see a company I don’t.

    I like having that flexibility to still invest. And if it’s an Uber, giving up 20% of the gains doesn’t bother me at all.

    Why I Cold Message Founders

    In two of these 6 cases (the founder referral and the company I found on Twitter), I cold messaged the founders. That’s something I do more and more.

    In fact, most of my meetings these days are companies I contacted. That way, I know I’ll be interested in what they’re doing!

    I like to tell the founder exactly why I found their company compelling. I definitely do not send the same message to everyone.

    If my message is carefully tailored to the specific company, I’m more likely to hear back. I also message the same company repeatedly if I don’t hear.

    I’m a small fry. I can’t expect the best deals to come to me.

    But I’m in good company. Sequoia cold messages companies regularly.

    In fact, that’s how Jim Goetz won the WhatsApp investment. If you out hustle the competition, you win.

    Wrap-Up

    Of the countless companies founded every year, only a few will matter. The one thing that matters in venture capital is to own a piece of those companies.

    So I cast a wide net and meet lots of companies. Of the startups I see, I put a check into 1 in every 250 deals on average.

    I’m always looking for new sources of great deals. So if you have one you love, let me know!

    There will be no blog tomorrow for the holiday. Have a happy July 4th and God Bless America! 🇺🇸

    More on tech:

    My Biggest Losses as an Angel Investor

    Do Non-Founders Make Better Investors?

    The Coming Wave of Job Losses

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • The Coming Wave of Job Losses

    Microsoft just announced they’re laying off another 9,000 people. With AI and offshoring rapidly eliminating jobs, are we about to see a new wave of unemployment?

    AI Eats Engineering Jobs

    New comp sci graduates have one of the highest unemployment rates of any major. Big Tech companies are doing hiring freezes and layoffs.

    AI is driving this rapid slowdown in engineering jobs. An engineer skilled in AI can produce far more than before.

    In fact, coding is what AI does best. But LLM’s are coming for other cognitive tasks.

    I expect routine work in customer service and legal to be automated soon. And once AI masters driving, watch out. Truck driver is the most common job in 29 states.

    But it’s not just computers that are coming for your job. It’s humans — overseas.

    Our Man in Cairo

    Whatever companies can’t automate, they’re offshoring.

    “We have a guy in Egypt that does all our cold calls for us now,” a friend in sales told me this weekend. “He speaks perfect English. And it’s only $500 a month.”

    A couple of years ago, his company would’ve hired an American fresh out of school. Not anymore.

    The quality of talent available overseas is insane. We can hire the best students in their whole darn country for a fraction of what mediocre Americans cost. They work harder and turnover is lower too.

    Adapting Is Harder Than It Looks

    Between automation and offshoring, lower end desk jobs are rapidly disappearing. If prior waves of job losses are any indication, it will be hard for laid off Americans to adapt.

    In 2008, Janesville, Wisconsin lost their GM plant. It employed 7,000 people at its peak, perhaps 1/6th of the town’s workers.

    I was living just up I-90 from there in Madison at the time. I remember the plant closure being all over the news.

    I recently read a book about Janesville. It turns out that despite the workers’ best efforts to retrain, 3/4 of them said they were worse off 5 years later.

    Half the laid off families struggled to afford food. Children became homeless.

    This is the future for a lot of laid off Americans. Adapting is harder than it looks.

    Wrap-Up

    AI and offshoring will decimate the lower end of the job market over the next decade.

    Many of the displaced workers will struggle. They could form a potent political force.

    My best advice on how to win in this new era is to embrace AI. Use it every day for every task.

    If you can do that, you’ll be one of the winners in this new world.

    More on tech:

    My Biggest Losses as an Angel Investor

    Did a Robot Try to Attack Humans?

    Testing Gemini’s New Models

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Why Businesses Should Leave NYC Now

    If you run a business in NYC, you should only be focused on one thing right now: finding office space in Jersey City. With anti-police mayoral candidate Zohran Mamdani about to take over, this is the most important thing you can do for your company.

    Back to the Bad Old Days

    We saw the results of defunding the cops under Bill De Blasio.

    Crime shot up like I’ve never seen in New York. Random people threatened me on the street. I saw people passed out with needles in their arms.

    In 11 years out here, I’d never seen anything like it.

    With the election of Mayor Eric Adams, New York is on the mend. But with Mamdani running away with the primary, we’re headed back to the bad old days.

    Mamdani has repeatedly called for defunding the police. Now that he’s trying to get elected, he’s attempting to walk that back.

    If you’re buying that, I have some swampland in Florida you’re gonna love.

    Why Businesses Have to Leave Now

    Mamdani will likely win. Even if he doesn’t, his primary victory shows how far left the NYC electorate has gone.

    Soon, either Mamdani or someone very much like him will take power. They’ll defund the police and crime will skyrocket.

    Once that happens, it will be hard to recruit employees to NYC.

    Who wants to pay $4,000 a month for a closet and get robbed on their way to the grocery store? No one.

    The best talent will go elsewhere. They’ll go to your competitors outside NYC.

    Once you can no longer attract the best people, your company is done.

    It’s important to leave now while there’s still space available. If you’re streaming out with everyone else, the limited office space in the surrounding area will be taken.

    Why Jersey?

    Here’s why you should move to Jersey City: it’s close, but not too close.

    You’re safely across the river and away from NYC’s ultraliberal policies. But you’re close enough to the city that not all your workers need to move at once.

    They can trickle in over time on their own schedule. They won’t need to take their kids out of school, at least not right away.

    Asking everyone to move to Miami or Austin is a much harder sell. Asking them to hop on the PATH train is only a minor change to what they do now.

    Jersey City has some lovely office space. This weekend, I looked around online out of curiosity and found this beautiful co-working space right across the street from the Newport PATH station. There are also some great spots in Hoboken and Secaucus, close to major train stations.

    Wrap-Up

    The lifeblood of any business is talent. And in a couple of years, the best talent will not want to be in New York.

    You don’t wait until the roof collapses to leave a burning building. Don’t wait until you or your employees are being assaulted to leave NYC.

    I hope I’m wrong about New York’s future. But I wouldn’t want to bet my company on it.

    More from the blog:

    Just Write the Poor a Check

    ChatGPT Helped Me Pick Our Next Governor

    Big Money, Politics and Polarization: Krysten Sinema at the All-In Summit

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Just Write the Poor a Check

    When I was a kid, my family was on food stamps. But sometimes, what we really needed was money to pay the light bill. Why not just give people cash?

    Right now, Congress is voting on Medicaid cuts in the hopes of balancing the budget. I have a much easier way to fix these programs: just write people a check.

    A Grab Bag of Inefficient Programs

    The US government has countless welfare programs. Some of the largest are Medicaid (health insurance for the poor), SCHIP (health insurance for poor kids), SNAP (food stamps), and TANF (cash welfare).

    We spend about $750 billion on these programs in total. About 6% of that goes to admin costs: $45 billion.

    Compare that to Social Security. Social Security is much larger, at $1.5 trillion a year in spending. Admin costs are just 0.5%, or about $8 billion a year.

    It’s no wonder Social Security has way lower admin costs than programs like Medicaid. Medicaid has complex eligibility requirements and only pays for certain services. Handling applications and claims is time consuming and labor intensive.

    What Happens If We Just Give Them a Check?

    What if instead of all these complex programs for the poor, we did what Social Security does: give them cash?

    The poor would have much more flexibility. They’d be able to buy diapers when they need diapers, instead of wishing that SNAP card could be used for Pampers.

    The admin costs of these programs would also fall precipitously. If we got the admin costs on welfare programs down to the level of Social Security, we’d save about $40 billion a year.

    That’s a ton of money! That $40 billion could be used to help more poor people or reduce the deficit.

    The Power of Responsibility

    Being on welfare isn’t great. I know: I’ve been there.

    We don’t want people becoming dependent on the government for the rest of their lives. That is not a happy life.

    Don’t believe me? Visit any urban ghetto and see the results of these welfare programs. Or visit a poor, rural area like the ones I lived in as a kid.

    We should help folks get back on their feet if they’re having a rough patch. But we should time limit these programs to 5 years in a person’s life.

    This is incredibly generous.

    If you’re struggling, your fellow citizens will be happy to help you. We’ll cover your bills for a whole 5 years!

    But if you’re able bodied, you eventually need to work. Five years should be more than enough time to find something.

    And if you’re truly disabled, we’d be happy to support you for life. In a society as wealthy as ours, we have that luxury.

    Wrap-Up

    One big objection to sending the poor cash is that they’ll spend it on the wrong things. Drugs, alcohol, you name it.

    Let’s be honest: some will. But let’s also not fool ourselves: people sell food stamps for cash and buy drugs as it is.

    We shouldn’t penalize decent families down on their luck by treating them like children.

    They know what they need better than we do. Giving them cash is the easiest way to meet those needs.

    But another part of treating the poor like adults is responsibility. That’s why welfare must end after 5 years.

    Give folks cash. But enforce a time limit.

    This is how we can fix welfare in America.

    More on government:

    ChatGPT Helped Me Pick Our Next Governor

    Three Priorities for the Trump Administration

    Big Money, Politics and Polarization: Krysten Sinema at the All-In Summit

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Where Men Win Glory: The Pat Tillman Story

    Pat Tillman walked away from a $3.6 million NFL contract to join the Army after 9/11. What makes a man do something like that? As I headed off on vacation a couple of weeks ago, I cracked the book Where Men Win Glory to find out.

    Tillman was one of the best defensive players in the NFL at the turn of the millennium. But after the September 11 attacks, he was not content to sit back and let others fight al Qaeda. He decided to enlist himself.

    Tillman At War

    His base pay as a private in the Army was a long way from his NFL millions: just $1,290 a month. And Tillman put himself in grave danger, requesting an infantry billet.

    Tillman served in Iraq briefly but never saw combat. Soon after, he was deployed to Afghanistan.

    Sent to patrol remote villages near Afghanistan’s border with Pakistan, Tillman and his unit wound their way up remote mountain passes. As darkness began to fall that night, some of the Rangers in Tillman’s unit mistook him for a Taliban insurgent.

    Despite his efforts to signal to them, they shot him dead.

    The Cover Up

    At first, the military and the White House claimed that Tillman fell bravely resisting the Taliban. This was despite internal reports that he died in friendly fire.

    The truth was that Tillman’s death was a colossal screw-up by the military. Another soldier shot him dead at a distance of just 120 feet. It wasn’t even entirely dark when it happened.

    Soldiers even destroyed some critical evidence, including burning his uniform, which is against military rules.

    In time, the truth came out: Tillman was killed by his own.

    His death appears to have been an accident. Chalk it up to the fog of war: nervous men, many of whom had never been in combat, fired wildly and Tillman paid the price.

    Why Did Tillman Walk Away From Millions?

    Very few people would walk away from fame and millions of dollars to risk their life in Afghanistan. So why did Tillman do it?

    Tillman was a man of principle. He didn’t think others should have to fight while he sat on his NFL millions.

    But he was also a thrill seeker.

    Many times in college, Tillman made dangerous jumps from high cliffs into bodies of water. Some of the jumps could’ve killed him.

    I’ve never jumped off a cliff. I’ve also never served in the military.

    Principles shape our behavior. But so do more obscure personality traits.

    Preventing Friendly Fire: How Startups Can Help

    These days, I view a startup as the solution to every problem. And there’s a great startup to be built here.

    Sadly, what happened to Tillman is not rare. In Iraq and Afghanistan, the percent of casualties caused by friendly fire reached as high as 41% and 13% respectively.

    Nearly half of all casualties, caused by our own forces! This is unacceptable.

    Soldiers need a beacon that will broadcast their location and the fact that they’re friendly. Other soldiers could see this in a heads-up display or on a device. We could also put these beacons on friendly vehicles.

    This product would save untold lives. If you’re building it, contact me.

    Wrap-Up

    As I sit here writing this 21 years after Tillman‘s death, the Taliban is back in control of Afghanistan. 

    Tillman could have stayed home, played football, and enjoyed his family. They would’ve been better off. He would’ve been better off. And the situation in Afghanistan would’ve been no different. 

    I respect what Tillman did. But I wish he hadn’t done it.

    Sometimes, answering the call of duty isn’t the thing to do. Sometimes, we’re better off taking care of our own.


    More on books:

    Nuclear War: A Scenario

    Unit X

    Empty Planet (Part One)

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • What Percent of Companies Pivot?

    “The initial idea doesn’t matter — most companies pivot.” I’ve heard that 100 times. But is it really true? Today, I dug into my portfolio to find out.

    I looked at investments at least a year old. This way, they’ve had time to pivot.

    Here’s what I found…

    Of 29 companies in the sample, 10 pivoted. 19 are still working on the same idea they had at the time I invested 1-4 years ago.

    Are pivots more successful? Or is pivoting something only a failing company does?

    To answer this question, I looked at the 3 most successful companies in my portfolio. Of those 3, one is a pivot.

    If I expand that to the top 5, I still have only 1 pivot. This makes sense — if you’re crushing it with your initial idea, why change?

    Since I’ve only been investing for around 4 years, my sample size is small. I searched for data on how common pivots are but couldn’t find anything useful. So for now, you’ll have to content yourself with my study, small though it may be!

    The bottom line is most of my investments don’t pivot. This is especially true for the most successful companies.

    As investors, it’s our job to challenge conventional wisdom. And from what I’ve seen, the commonplace that “the idea doesn’t matter” is wrong.

    I pay close attention to both the team and the product. Odds are, they’ll still be slinging this thing for a long time.

    More on tech:

    My Biggest Losses as an Angel Investor

    Don’t Give Answers. Ask Questions.

    Do Non-Founders Make Better Investors?

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • My Biggest Losses as an Angel Investor

    I lost my entire investment. Twice. These are my worst losses as an angel investor.

    Everyone online wants to talk about their wins. But you really want to learn something? Lose some money and feel the sting.

    Here’s the mistake I made and why I’ll never do it again…

    Two Strangely Similar Companies

    A couple of years ago, I made two investments that looked rather similar.

    Both founders were wonderful. Deeply committed, incredibly hardworking.

    Both products were very innovative. Had they worked, they would’ve been giant outcomes.

    But both startups had the same problem: their bank accounts were running low.

    These companies didn’t have an active round going. So, at that particular moment, my money was the only investment cash coming in.

    Since both these startups were breakeven or slightly profitable, I didn’t worry about it. But here’s what I didn’t realize…

    How These Bets Went Bad

    A small profit can turn into a big loss pretty quickly. A customer churns, a usage-based scheme doesn’t get the usage you imagined, etc.

    When that happens, you need a cash cushion. If you don’t have it, you’re toast.

    Had I invested in these startups alongside a lead, they’d have had a few million dollars to fall back on. But I didn’t.

    Both founders held on much longer than I ever expected. But eventually, they had to admit reality and close up shop.

    The One Thing I Did Right

    As dumb as my decisions were, I did one thing right: bet sizing.

    I made tiny feeler bets on both these companies. As painful as these losses felt at the time, they were actually quite small in the context of my portfolio.

    Let’s take the “fund” of 36 companies I’m investing out of right now. These losses represent just 2% of it.

    I don’t make a larger investment until the company sees some real success. My biggest investment is 11% of my portfolio, and that company is doing a lot better than these two.

    What I Learned

    If I had invested in these 2 companies alongside a lead who put up millions, they might still be operating today. Not waiting for a lead was the key mistake I made.

    Fortunately, I only made that mistake twice in 35 investments. I won’t be making it again.

    Today, I look for a lead putting a minimum of 12 months runway or $1 million (whichever is more) into the company. I’m also fine with a party round so long as the company has that same amount of cash signed and wired. In fact, my most successful investment to date was a party round.

    With that kind of cash coming in, the company can weather some serious hits without going out of business.

    Wrap-Up

    These two founders did nothing wrong. They’re wonderful entrepreneurs.

    They worked incredibly hard to make those companies work. But it just wasn’t possible.

    I’d back either of these guys again in a minute.

    It was me who made the mistake. I shouldn’t have invested without a lead.

    Mistakes happen. They’re the cost of doing anything ambitious. We just need to learn from them.

    And this is a mistake I won’t make again.

    More on tech:

    Working for Jimmy

    Don’t Give Answers. Ask Questions.

    Do Non-Founders Make Better Investors?

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Working for Jimmy

    Yesterday morning, I didn’t want to get out of bed. I was on 4 hours sleep. But then I thought, “Jimmy needs me”.

    Who’s Jimmy? Jimmy is the name I’ve given to that anonymous founder out there who needs help.

    Jimmy is just starting out. Nobody believes in him, but he has a killer idea that’s going to make life better.

    Jimmy is my customer.

    Learning from Michele Ferrero, Chocolatier

    Who doesn’t love those little Ferrero Rocher chocolates? Whenever I go to the pharmacy for a flu shot or some other unpleasant task, I pick one up at the checkout counter.

    But it wasn’t until yesterday that I found out Ferrero is a multibillion dollar empire!

    Turns out they make Nutella, Kinder, and a zillion other things. The company is worth at least $40 billion, and founder Michele Ferrero was the richest man in Italy.

    In a wonderful episode of the Founders podcast, host David Senra explains how Michele kept himself laser focused on the customer. He gave her a name: Mrs. Valeria.

    Mrs. Valeria was Michele’s boss. She would decide the success or failure of his business and the livelihood of thousands of employees.

    Every decision he made, he made with Mrs. Valeria in mind.

    Inventing Jimmy

    As I listened to this podcast, I thought to myself: how can I take Michele’s lesson and apply it to angel investing?

    I realized I needed my own Mrs. Valeria. A representative founder.

    I decided to call him Jimmy.

    Jimmy is loaded with skills. Jimmy has a couple of hardcore builders working with him. And Jimmy is about to create something huge.

    But nobody believes in Jimmy. He’s an outsider. And he needs my help.

    What Does Jimmy Need?

    So what does Jimmy need? I came up with a list:

    1. Cash.
    2. Prompt responses. Jimmy is trying to move fast. He cannot wait for a week for me to reply to an email — all too common amongst VC’s.
    3. A clear yes/no. Jimmy needs to know where he stands.
    4. Clear rationale for a no. This will help him find out what he needs to do to get funded.
    5. Intros. Jimmy is an outsider. He needs intros to other investors, customers, and key employees.
    6. Occasional advice. Sometimes, Jimmy needs someone to kick around ideas with. But he doesn’t need meddling.
    7. Help boosting social posts. These are the key to customer acquisition for many companies. So I take some time each day to like and comment on posts from my founders. It’s fun to see what they’re working on!

    Wrap-Up

    It’s really hard to think of “founders” in general. It’s much easier to think of one person.

    That’s why I created Jimmy.

    Maybe Michele Ferrero faced the same thing. He created Mrs. Valeria.

    No matter what business you’re in, the customer is king. Or as they say in Japanese, okyakusama wa kamisama — “the customer is God.”

    So when I’m tired and my behind is dragging, I think of Jimmy.

    Jimmy’s tired too. But he needs me to clock in and get to work.

    Together, we have a chance to achieve something great.

    More on tech:

    Don’t Give Answers. Ask Questions.

    Do Non-Founders Make Better Investors?

    Hot Categories I’ve Never Invested In

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Don’t Give Answers. Ask Questions.

    “Should we keep selling to the mid-market, or go after the whales?” a founder recently asked me. Instead of giving her an answer, I asked her a question…

    “What’s the difference in sales cycles between the two?” I asked.

    “That’s just it!” she responded. “The sales cycles are basically the same. But the big customers are 5 or 10 times larger ACV’s.”

    “It sounds like you’ve got a solid argument for going after the big guys,” I said.

    “That’s what I was leaning towards,” she responded.

    “I think you should go with your gut,” I told her. “You’re in this every day. I’m parachuting in for a half hour. You know better than I do.”

    Why Asking Questions Is Better Than Giving Answers

    After our chat, she started going after the larger customers. And sure enough, revenue growth went way up, hitting 3x year over year!

    The traditional startup advice is to go after smaller customers first. They usually have shorter sales cycles and are more likely to do business with startups.

    As soon as she asked me this question, I was sorely tempted to parrot that cookie cutter advice.

    But I didn’t. Instead, I asked her a question.

    The Answer Is Within You, Grasshopper

    Turns out, the cookie cutter advice did not apply to this company.

    And no wonder! Every company’s different.

    This is why I rarely give founders a straight answer. Since I don’t actually work at the company, I only have so much context.

    Usually, the founder already knows what to do. They just need a sounding board and some validation.

    How VC Advice Can Hurt Companies

    Asking questions does a better job at revealing the truth than just making a statement.

    We investors love to think we have all the answers. You’ll never see anyone make more pronouncements with less knowledge than a VC.

    But we don’t have all the answers. Every startup is different.

    The problem is, founders tend to give our opinions undue weight. We have the playbook to success, right?

    In truth, each founder is the best expert on her company. If anyone has the answer, it’s her.

    The investor can help by listening and teasing the right answer out of her. But when he short circuits that process and gives an opinion based in minimal knowledge, he’s hurting, not helping.

    Wrap-Up

    If you’re an investor, try asking questions of your founders. If you’ve picked your founders well, the answers are already within them!

    If you’re a founder, encourage investors to ask you questions. These questions help you refine your thinking.

    The right answer is out there. Together, you can find it.

    More on tech:

    Do Non-Founders Make Better Investors?

    Hot Categories I’ve Never Invested In

    Small Investors Lead to Big Investors

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order.