Tremendous

An angel investor's take on life and business

  • “The Eyes of the Blind Shall See” — Aria Gen 2 Smart Glasses

    “Help me pick up red onions.”

    “Taking you to red onions.” This is how Sharon Giovinazzo, a blind woman in San Francisco, buys groceries these days. Her helper isn’t a person — it’s AI glasses from Meta.

    Sharon lost her vision at age 31. Now, she’s one of the first users of the new Aria Gen 2 glasses.

    These glasses have cameras, mapping, microphones and speakers. They see her environment and tell her how to navigate it.

    Meta announced these new Gen 2 glasses yesterday. They have better cameras and sensors than the Gen 1 and will be available to researchers later in the year.

    The Gen 2’s are very practical. The battery lasts 6-8 hours and they weigh just 75 grams. To put that in perspective, the regular prescription glasses I’m wearing now weigh 36 grams.

    The Aria Gen 2’s are incredible for the blind. But they also have exciting applications in robotics.

    You can wear them while doing a task like washing dishes. The cameras and sensors in the glasses pick up tons of data, which can then be fed to a robot.

    With enough of that data, the robot will be able to wash dishes too.

    The Aria Gen 1’s collected a mountain of data that robots are using now. This may be one of the reasons that we’ve seen such incredible advances in humanoid robots lately from companies like Figure and Unitree.

    These glasses are incredible for the blind and for researchers. But would average people ever want to use something like this?

    I’m doubtful. It’s hard to get people to wear prescription glasses they really need. Getting them to wear glasses they don’t need would be even harder.

    I’m used to wearing glasses. I’ve been wearing them since I was 4 years old — 35 years!

    But most people aren’t used to it. And a device on your face is a lot more intrusive than a device in your pocket.

    That said, smart glasses could be invaluable for certain jobs.

    I have a small investment in a startup called Argyle that applies augmented reality to construction. Argyle can show an outline of where in a building you should install a water pipe. That way, you don’t put the pipe in the wrong place.

    It’s a really cool application, and glasses with more advanced sensors could make it even better.

    I can also imagine surgeons and semiconductor fab technicians wearing Aria’s. The glasses could guide them to make the right incision or turn the right knob on the photolithography machine.

    At this early stage, it’s very hard to say how we’ll use smart glasses.

    Perhaps they’re the next iPhone…ubiquitous and the main way we interact with the internet. Or maybe they’re a niche product that are still very useful for the blind, researchers, and folks in certain jobs.

    Either way, these new Aria Gen 2’s are awesome. I can’t wait to try them myself!

    Have a great weekend, everyone!

    More on tech:

    Is Biotech Having its ChatGPT Moment?

    Using Gemini Voice As My Personal Tutor

    Using Grok 3 to Manage My Stock Portfolio

    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. 

  • Using Gemini Voice As My Personal TUtor

    So many times in school, there was something I didn’t understand. But I couldn’t interrupt the class every time and ask the teacher, right? Well, now I can, because the teacher is an AI.

    This morning, I used Google AI Studio to tutor me about CRISPR gene editing. I’m trying to learn about the technology so I can better evaluate biotech startups.

    My New AI Tutor

    So, I asked Google for a basic primer. I told it to gear its responses to the layman. It gave me a wonderful overview of CRISPR.

    CRISPR comes down to two things: the guide RNA that determines where on the DNA we make an edit, and the Cas9 actually makes the edit by cutting the DNA.

    I was a little confused about guide RNA the first time Google explained it. So I had it go over the explanation again.

    Then, I repeated the info back to Google and asked if my understanding was correct. Google confirmed that it was.

    This is a really powerful feature.

    So often, when a teacher explains something, I may think I understand. But do I really?

    Being able to check my understanding any time without disrupting the class is incredibly helpful.

    Why We Need Structured AI Apps for Learning

    Once Google finished giving me the basics, neither Google nor I seemed to know exactly where we should go next. So I just asked it “what’s the next thing I should know about CRISPR?”

    This is where a structured AI app would be super helpful.

    A student doesn’t know what he needs to know! So, I’m not even sure the right questions to ask.

    Google and I were able to muddle through. But a structured program that teaches X, then Y, then Z would be much more useful.

    I could still interrupt, ask questions, check my understanding, and move the lesson in a different direction if I want. But at least I’d have a structure for my learning.

    I’m scouring the internet for AI tutoring apps. I have a meeting booked with one such startup next week.

    This is going to be a giant opportunity. If we can help humans learn faster, that makes humanity 10x more capable.

    Wrap-Up

    I really encourage you to use AI as your tutor.

    AI voice apps are wonderful for this. Google AI Studio, the Gemini app, ChatGPT Advanced Voice, or Grok Voice are all wonderful choices.

    AI can teach you about any subject imaginable. I’ve done primers on CRISPR and missile defense so far.

    It does a wonderful job! I learn much faster than I ever did in a class.

    Being able to interrupt and ask questions at any time is incredibly helpful. I learn maybe 5x faster with AI than with most human teachers I’ve had.

    The killer app will be a structured AI program to learn a subject combined with a human teacher to fill in the gaps and help motivate the student. If you’re building that, contact me!

    More on tech:

    Demo: Google AI Studio Realtime Streaming

    Is Biotech Having its ChatGPT Moment?

    Testing Claude 3.7 Sonnet, Anthropic’s Latest Model

    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. 



  • Is Biotech Having its ChatGPT Moment?

    On Friday night, I was chatting with a friend about the amazing stuff happening in AI. “Where do you think it’s going next?” he asked. I thought for a minute, then responded, ”Something is going to happen in biotech.”

    In mid-2022, I started investing in startups building on top of LLM’s. These were very early models like GPT3. They were a little janky, and ChatGPT didn’t exist yet.

    At that time, hardly anyone cared about LLM’s. Everyone was talking about NFT’s and altcoins.

    Fast-forward 3 years, and some of those 2022 investments are doing very well.

    Right now, people aren’t excited about biotech. In fact, I just listened to a podcast from STAT about how a lot of biotech companies are trading for less than their cash in bank.

    But things are changing. We have the gene editing tool CRISPR, which lets us edit DNA as if it were a Word Document. Last week saw another incredible advance…

    The Arc Institute and NVIDIA just launched a model called Evo 2.

    Evo 2 is a giant AI model trained on 9 trillion DNA base pairs. This model could help us understand diseases and design new drugs to cure them.

    Patrick Collison, who has provided much of Arc’s funding, broke it down on the latest All-In Podcast:

    “This is kind of a new read, think, write loop in biology that just didn’t exist a decade ago.”

    My brain lit up when I heard Patrick say that. If someone that much smarter than me also thinks biotech is a huge opportunity right now, then maybe we’re on to something.

    The release of Evo 2 could be a ChatGPT moment for biotech. A fundamental advance can give birth to a zillion startups.

    I haven’t invested in any biotech companies so far. But lately, I’m looking at these companies a lot more closely.

    With AI models moving into biology, biotech is starting to look a lot more like software. I may not know much about science, but software I do know.

    So just like in software, I’m looking for technical teams attacking a huge problem. If that’s you, I want to hear from you.

    More on tech:

    Testing Claude 3.7 Sonnet, Anthropic’s Latest Model

    Using Grok 3 to Manage My Stock Portfolio

    DeepSeek vs. Gemini Deep Research: Which Model Is King?

    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. 

  • Testing Claude 3.7 Sonnet, Anthropic’s latest model

    Anthropic just dropped its most powerful model yet, Claude 3.7 Sonnet. This morning, I asked it 3 questions I actually needed the answer to. Let’s see how it does…

    Teach Me About Biology

    Lately, I’ve been fascinated by new developments in biotech. So I had Claude give me a primer on some recent discoveries.

    Here’s the prompt I used:

    “Please give me a primer on discoveries in biology and biotech in the 21st century. Gear your response to the layman, not a specialist. Focus in particular on developments like CRISPR, single cell gene sequencing, and synthetic biology. But also include anything else that seems relevant. Give me an output using bullet points so it’s easier to read.”

    Yes, I say please. You never know, these things could take over some day.

    Claude gives a great response, providing understandable info on CRISPR, single-cell genomics and more.

    It also formatted the answer beautifully, with bold headings and bullet points. That makes the response a lot easier to read.

    The response is great, but it’s hard to trust it. It doesn’t cite any sources.

    Overall, I’d give this a B. It’s great information, but if we don’t know where the info is coming from, it’s not that useful.

    On to question two…

    Learning About the AfD

    Lately, the AfD party is all over the news. They took 2nd place in the German election Sunday.

    But despite all the headlines, I don’t actually know much about what the AfD stands for. So I asked Claude:

    “Tell me about the political positions and past actions of the German AfD party. Please be specific and cite your sources.”

    Claude gave a good and thorough response. But even though I specifically directed it to cite its sources, it did not do so, saying “I don’t have web browsing capabilities.”

    Just like in my first test, the info looks great. But I have no way to verify it.

    So, the response is not that useful. I’d give this a B-.

    Out of curiosity, I ran this prompt through Grok 3.

    It cited 27 sources in a matter of seconds. It provided both links and in-line citations.

    Now that’s a good response!

    Government Debt Across Major Countries

    America’s debt is getting to a crushing level, $36 trillion. But I’m curious…how bad off are we compared to other major countries?

    So, I asked Claude…

    “Please give me a table with data for all major economies worldwide. In the table, put the country’s name, its level of government debt in dollars, and it’s debt/GDP ratio (expressed as a percentage). Cite sources whenever possible.”

    Claude produced a pretty table with just the info I wanted.

    But for some reason, it popped the table up alongside its prior response on the AfD. This was rather jarring and isn’t a great interface for the user.

    And again, it doesn’t link to sources. But at least this time, it gave me an idea of where I could go to verify the information.

    I’ll give this one a B- as well.

    Wrap-Up

    How a model does at math competitions isn’t very relevant to me or most people. So rather than look at benchmarks, I test models by putting them through real world tasks.

    Claude did a great job of answering the questions. I also liked how it formatted the outputs. The responses were clear, readable, and nicely formatted. That makes the tool easier to use.

    But the big problem with 3.7 Sonnet is the lack of citations. How can I trust the information Claude is giving me?

    Until that gets fixed, 3.7 Sonnet is not that useful. Overall, I’m giving it a B-.

    Grok 3 is still my favorite model. If they want to dethrone Grok, Anthropic needs to step it up.

    More on tech:

    Using Grok 3 to Manage My Stock Portfolio

    How Good is Grok 3?

    ChatGPT Pro vs. Gemini Advanced vs. Grok vs. Claude

    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. 

  • Buffett’s Annual Letter

    “During the 2019-23 period, I have used the words ‘mistake’ or ‘error’ 16 times in my letters to you. Many other huge companies have never used either word over that span.”

    Berkshire Hathaway turned in an incredible 2024, with operating earnings up 27%. But in his annual letter on Saturday, Warren Buffett was eager to admit the mistakes he’s made running Berkshire for the last 60 years.

    Making Mistakes

    Buffett describes mistakes in assessing businesses and also in assessing people. He admits those mistakes, but doesn’t dwell on them.

    For the last week, I’ve been kicking myself for passing on the Figure seed round. The robotics startup is now raising at a $39.5 billion valuation.

    But if the greatest investor in history makes mistakes, I guess I’m entitled to a few as well! The key is to quickly admit them and learn from them.

    Buffett notes that in the end, the mistakes aren’t what matters most. It’s the occasional decision you actually get right:

    “And our experience is that a single winning decision can make a breathtaking difference over time.”

    Let’s think about this from a venture capital perspective.

    I could make 100 investments that don’t work out. And I could miss another 100 great companies.

    Heck, I probably will!

    But if I hit one Uber, this angel investing experiment is a huge success.

    Relying on People Smarter Than Us

    As ever, Buffett is self-effacing:

    “Lacking such assets as athletic excellence, a wonderful voice, medical or legal skills or, for that matter, any special talents, I have had to rely on equities throughout my life. In effect, I have depended on the success of American businesses and I will continue to do so.”

    I’m no Warren, but I can relate to what he’s saying. Most of the founders I meet are far more impressive people than I.

    Often, I don’t even fully understand what they’re doing. But I understand enough to say, “That guy is very smart and hardworking. Give him money.”

    And that’s all it takes. This is the magic of our capitalist system. We can hitch ourselves to someone else’s success, helping very modestly but profiting enormously.

    The Value of Patience

    “Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities.”

    Buffett is fine with sitting on his hands for an extended period. He only acts when he sees a really compelling investment.

    I try to do the same in my angel investing. Sometimes, I go months without making a new investment.

    Indeed, I haven’t made one yet this year.

    At other points, I make several investments in a matter of a few weeks. It really depends on what I see.

    The key is not to get antsy. There’s no need to write a check just because I haven’t written one in a while.

    It’s better to wait for that incredible opportunity. When it comes, I try to act decisively.

    Being patient isn’t easy.

    After all, we’re investors. We’re supposed to invest, right?

    Yes, we are. But activity for activity’s sake is not going to make us money.

    Wrap-Up

    No matter what you invest in, whether you’re a huge institution or a small fry like me, you can always learn from Buffett. Whenever I don’t know what to do, I go back to Warren’s letters.

    He’s patient, he thinks for himself, and he owns his mistakes.

    Those traits make a great investor. They also make a great person.

    More on investing:

    Missing Figure

    Using Grok 3 to Manage My Stock Portfolio

    US Stocks Are Extremely Overvalued

    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. 

  • Using Grok 3 to Manage My Stock Portfolio

    Note: This is not investment advice.

    I’m using Grok 3 to help manage my stock portfolio. It had some great insights that are going to make me a lot of money.

    Let me show you what I did and how you can use Grok to help you with your investments too…

    Pre-Grok Allocation

    Lately, I’ve been thinking about my asset allocation. Here’s the rather odd set-up I have now:

    • 50% VFIAX – Vanguard S&P 500 Index Fund
    • 25% VHYAX – Vanguard High Dividend Yield Index Fund
    • 25% VTIAX – Vanguard Total International Stock Index Fund

    The part I’ve been really questioning lately is the VHYAX.

    I bought it about 3 years ago. The idea was to provide stability and income in the portfolio. So, a fund full of dividend paying blue chips made some sense.

    VHYAX replaced a long-term Treasury index fund I owned before this. Seeing that rates were likely to go up around the end of 2021, I knew those bonds would get killed.

    So I sold them all at the end of 2021 and beginning of 2022, just averting some big losses. I replaced those bonds with VHYAX.

    VHYAX is better than what I had. But is it optimal?

    Grok’s Recommendation — US and Foreign Stocks

    These last few months, I’ve been wondering why I have this “stability and income” portion at all. Why not lean into long term growth?

    I’m 39 years old with a high risk tolerance. My biggest goal is to grow my capital.

    If I take some losses along the way, that’s fine. My lifestyle is fairly simple and I can weather it.

    So with that in mind, I turned to Grok 3. Here’s the prompt I used:

    “Assume I have a portfolio of index funds. My goal with this portfolio is long term growth. How should I allocate this portfolio across different types of index funds? Consider options like US index funds, foreign stock index funds, etc. I am 39 years old, so my time horizon is long. My risk tolerance is high. What would be the best allocation, given all this information? Use the best research you can find to support your answer.”

    Here’s what it came up with:

    Grok recommended a 60/40 US/Foreign split. This is in line with research from Vanguard which Grok linked me to in another query.

    I asked a bunch of follow-up questions, proposing a 65/35 US/Foreign split. After all, most of the innovative companies are here.

    Grok concluded that the performance difference between the two is likely to be minimal, so either way could work.

    65/35 it is!

    Grok Recommends Dumping the Dividend Payors

    I also asked about my VHYAX and whether it truly fit with my goal of long term growth.

    Grok confirmed my suspicions that VHYAX is working against me. The trade-off for those dividends is less long term capital appreciation.

    Grok quoted a difference of several percentage points a year between VHYAX and a regular stock index fund like VFIAX or VTSAX (Total Stock Market). I researched this on my own and confirmed that Grok is right.

    I then had Grok model the difference in returns over 30 years between a lower-returning VHYAX and a higher returning VFIAX or VTSAX. It’s huge — we’re talking millions of dollars.

    The performance disparity makes sense when you consider the portfolio composition of these funds.

    VFIAX is 31% tech stocks. VHYAX is just 11%.

    Long term, technology is what’s going to drive growth, in America and worldwide. To have such a small allocation to it is a huge drag on performance.

    To dump the VHYAX, I have to pay a little long term capital gains tax. But it sounds like this short term tax hit will be well worth it in the long run.

    Taking Action

    Based on my conversation with Grok and my own research, I took action to get this portfolio in better shape.

    I sold all the VHYAX. With the proceeds, I bought VTSAX and VTIAX. (VTSAX is a broader fund that’s slightly better than VFIAX. I didn’t sell my existing VFIAX because it would trigger a huge tax bill that doesn’t justify the tiny edge that VTSAX has.)

    Here’s what I have now:

    • 65% VFIAX/VTSAX
    • 35% VTIAX

    I’ll rebalance this yearly if the allocation gets off by at least 5 percentage points.

    This is an asset allocation I plan to keep for many years. I’m well positioned for long term growth, with exposure to both US and foreign markets.

    Getting the Most Out of Grok

    Your financial goals may be completely different from mine. But you can still use Grok to help you manage your money.

    The key is to give Grok lots of context.

    Tell it your age, your time horizon, and your risk tolerance. That way, it can give customized advice.

    Once Grok gives you its initial response, ask it lots of follow-up questions.

    Have it explain its recommendations. Ask it to run through various scenarios.

    You have an endlessly patient helper here — make use of it!

    Grok comes up with some great ideas, but it’s important to verify the facts it relies on. LLM’s are not perfect. Read the underlying research yourself.

    I did not find any hallucinations when I used Grok. But hallucinations are still a possibility.

    Finally, think for yourself!

    Grok is just there to advise you. Run the prompt through other models (I also used Gemini Deep Research). Take some time and just think.

    Consider Grok’s advice one input among several. In the end, the decision is yours.

    Wrap-Up

    I’m confident that this new asset allocation will give me a strong base for the future.

    Grok was incredibly helpful in providing advice and helping me game out scenarios. It’s like having a super smart analyst that you don’t have to pay, available 24/7.

    I encourage you to put this analyst to work! Have it run through your investments and find out how you could be making more money.

    But always use your own judgement. It’s a helper, not a boss.

    More from the blog:

    How Good is Grok 3?

    US Stocks Are Extremely Overvalued

    Missing Figure

    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. 

  • How Good is Grok 3?

    Grok 3 is so good I just cancelled my Gemini Advanced subscription and set my homepage to Grok 3. Let’s run through 3 real world tests so I can show you what this model can do:

    1) Grok as Investment Analyst. Lately, I’ve been thinking about changing the asset allocation of my index funds. So, I thought I’d ask Grok for some ideas.

    I used Grok’s “Deep Search” capability on this one. Deep Search tells Grok to scour the internet for as much info as possible.

    Here’s the prompt I used:

    “Assume I have a portfolio of index funds. My goal with this portfolio is long term growth. How should I allocate this portfolio across different types of index funds? Consider options like US index funds, foreign stock index funds, etc. I am 39 years old, so my time horizon is long. My risk tolerance is high. What would be the best allocation, given all this information? Use the best research you can find to support your answer.”

    Grok gave an excellent and incredibly detailed response. It searched 40 different sites, looking at high quality info from Vanguard, Investopedia, and Finra among others.

    The response spanned several pages and included citations for key facts.

    I used this exact same prompt in Gemini Deep Research recently. The results were comparable, although Gemini suggested a more aggressive allocation (no bonds).

    The quality of Grok 3’s response was comparable to Gemini Deep Research. It also took much less time — maybe a minute versus around 5 minutes for Gemini.

    So, I just cancelled my subscription to Gemini Advanced and reset my homepage from Gemini to Grok.

    2) Find Me Some Startups! Since I spend my days meeting startups, I thought Grok could help me here too.

    I used Deep Search here also. Here’s the prompt:

    “What are the most interesting startups at pre-seed stage working on solutions to increase fertility? Consider startups to lower costs and improve effectiveness of IVF, and also startups to improve egg health for older women, among other possible ways to boost fertility.

    Please only show me startups that have raised $750,000 or less in funding.”

    Grok did a nice job here! It found me 5 fascinating startups from all over the world that are working on increasing fertility.

    The results weren’t perfect. Some of the startups it showed me had raised more than $750,000. But overall, the results were impressive.

    3) Optimizing My Meetings. Whenever I meet with a founder, I try to be as present as I can and learn as much as possible. But how can I improve my skills there?

    I asked Grok for some advice. Here’s the prompt I used:

    “As an angel investor, I meet with a lot of startup founders. I want to do the best job I can in those meetings. What are some tips to perform better, be more helpful, and learn more about the startups I meet with?”

    Grok’s advice was excellent. I especially like the part about watching the non-verbal cues. So often, our facial expressions and body language say even more than our words do.

    I asked some follow-up questions to Grok about evaluating those non-verbal cues. I want to get as good as possible at reading those so I can better understand the founders I meet.

    Wrap-Up

    Andrej Karpathy, co-founder of OpenAI, says Grok 3 is comparable to the best models out of OpenAI, including the $200/mo o1 pro.

    In my testing, Grok 3 is as good as any model I’ve used. It excels in research, crawling dozens of websites at warp speed and serving up detailed answers to your questions.

    It does all this faster than any model I’ve ever seen. And best of all, it’s currently free.

    I really encourage you to give Grok 3 a try. It’s incredible!

    More on tech:

    DeepSeek vs. Gemini Deep Research: Which Model Is King?

    ChatGPT Pro vs. Gemini Advanced vs. Grok vs. Claude

    Missing Figure

    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 Coolest Startups from YC W25: Part 2

    Paul Graham says your curiosity is the best way to tell what’s worth paying attention to. So when I scrolled through the YC directory this morning, I let curiosity lead me to the coolest startups.

    Since we dug into the W25 cohort two weeks ago, many more startups have launched their product. This morning, I looked at around 50 of them. Here are my favorites:

    Closure

    Crime has spiked in many of our big cities. And despite all the forensics and fibers and whatnot, homicide clearance rates are actually way down in recent decades.

    Lately, I’ve been looking for companies that are applying AI to help cops solve crimes. Using AI to crunch tons of surveillance video, witness reports, and other evidence could help nail criminals faster.

    Excellence Learning

    Lately, I’ve been using Gemini Live and ChatGPT Advanced Voice to tutor me. I’ve learned a lot about missile defense and plan to get a primer on CRISPR soon.

    You can stop the AI at any time and ask questions. It’s a wonderful way to learn.

    So I got to thinking…how can we apply this to K-12 education?

    Excellence Learning is making it happen. They combine structured AI tools for math and science with human tutors.

    I love that combo. An AI can practice with the students for as many hours as they need. Then, a human teacher can fill in gaps and help them stay motivated.

    Improve their kid’s grades and a parent will give you money. This could be a great business.

    Artificial Societies

    When a startup seems weird and hard to understand at first, that’s when I sit up and pay attention.

    Take Airbnb…you’re going to rent out strangers’ spare rooms? Pretty weird.

    But the weird ones produce the giant returns.

    So when I saw Artificial Societies, I was intrigued. These guys are using AI to simulate entire human societies.

    To start with, their helping people simulate how LinkedIn content will perform with their audience. Over time, they want to simulate all forms of group behavior. From their YC page:

    “Our vision is a world where all content, products, and policies are first simulated in an Artificial Society.”

    The human mind is the last frontier. If Artificial Societies can help us understand group behavior better, it will be an incredible achievement.

    Wrap-Up

    For me, scrolling through the YC directory is like being a kid in a candy store. “I want that one! Ooh, and that one!”

    I’ll be contacting each of these 3 companies today so I can learn more.

    I’m so grateful for awesome founders like these who are building ambitious things. And as much as we investors whine about the valuations sometimes, I’m grateful for YC.

    No one else supports new founders at this kind of scale.

    What are your favorite companies in W25?

    More on tech:

    The Coolest Startups from YC W25

    Missing Figure

    Meet My Latest Investment: Querio

    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. 

  • Missing Figure

    “Aghhh, how could I have missed this?” That was me on Friday, reading the headline: Robotics Startup Figure AI in Talks for New Funding at $39.5 Billion Valuation.

    I had a chance to invest in Figure’s seed round in the spring of 2023 via a syndicate. I passed.

    Again in the spring of 2024, I had a chance to invest, this time in their Series B. Yet again, I passed.

    If that wasn’t bad enough, I had yet a third shot at this company recently. Some secondary shares came available via a syndicate. And yet again, I passed.

    This incredible company was right in front of me and I blew it. Not once but 3 times!

    I’ve been kicking myself all weekend.

    So how the heck did I make such a big mistake? Let me take you through my thought process at the time…

    What Was I Thinking?

    When I first saw Figure in the spring of 2023, I was entranced.

    I was so excited that I wrote about it on the blog. Since then, I’ve written about it 3 more times (one, two and three are linked here).

    Shortly thereafter, I had an opportunity to invest in the seed round.

    The founder, Brett Adcock, is incredible. His last company, Archer Aviation, is valued at $5.4 billion in the public markets.

    But the price of Figure’s seed was extremely high for that stage. So, I thought there would be no upside.

    At this time, the most valuable robotics company I could find was Boston Dynamics, at around $1 billion. Given the high price of Figure’s seed, I didn’t see much upside.

    What’s more, I have no background in robotics and didn’t feel qualified to invest in it. I’ve only done software up to this point.

    As for the other 2 opportunities to invest, the valuations were even higher. So, my concerns on upside were even more acute.

    What I Got Wrong

    What I didn’t realize was how big these robotics companies would get. Figure’s latest valuation is nearly 40 times that of Boston Dynamics.

    What changed?

    The ability to use Large Vision Models to direct a robot’s behavior lets them do way more than before. When I saw Figure’s seed round, no one had pulled it off yet.

    Still, something like ChatGPT shoved into a Figure robot wasn’t impossible to imagine. But I failed to appreciate just how much this would drive the upside.

    The fact that I wrote about the company over and over should’ve given me a sign: Francis, invest in this thing! As Paul Graham said:

    “Curiosity is the best guide. Your curiosity never lies, and it knows more than you do about what’s worth paying attention to.”

    And yes, I’m not really qualified to invest in robotics. But what the heck makes me qualified to do any of this?

    4 years ago, I knew nothing about angel investing. I learned by doing.

    Today, I’m planning on broadening out a bit and doing the occasional deep tech deal. In those deals, I’ll learn as I go, just like I have in the vanilla software deals I’ve done thus far.

    It all comes back to this quote from Naval Ravikant:

    “If I always did what I was qualified to do, I’d be pushing a broom somewhere.”

    How Much Would I Have Made?

    If I had gotten this right, I would be sitting on about $500,000 of paper gains on a $30,000 investment.

    I typically put $5,000 into a seed round and $25,000 into the Series A. After considering dilution and fees to the syndicates, that $30,000 would have increased in value to around $500,000. And it would’ve taken less than 2 years.

    So yeah, that stings.

    Does Figure’s Valuation Make Sense?

    Of course, that $500,000 would only exist on paper.

    Given the huge increase in valuation, I’d want to sell 25% of my shares in secondary at this point. It’s good for me to trim my position over time. But, with the shares locked up in a syndicate, it would only be possible if the syndicate lead agreed.

    Getting liquidity on that $500,000 would be tough.

    Figure would need to IPO or get bought at that price or higher. For that to happen, the price would need to make sense to public markets or an acquirer.

    Let’s give Figure a very generous 50x revenue multiple. At that level, they’d need $800 million a year in revenue to justify that valuation.

    I don’t know what these robots cost, but let’s assume the first ones are pricey. Say, $100,000 each.

    Figure would need to deploy 8,000 robots this year to justify their valuation under these assumptions. So far, all we have in terms of public information is that Figure is doing a pilot at one BMW plant in South Carolina. I don’t get the impression there are anywhere near 8,000 robots involved.

    Of course, there may be a lot more going on that isn’t public information. But based on what we do know, the price seems like a major stretch at this point.

    Figure may grow into the valuation. I really hope they do! I think the technology is absolutely awesome.

    Wrap-Up

    Getting so tantalizingly close to an incredible outcome is exciting. And blowing it gives me a sinking feeling in the pit of my stomach.

    Here is the most critical thing I learned from this mistake: If I have a chance to back a founder who had a billion dollar exit when he starts his next company, take it. Ask no further questions.

    I probably won’t understand what they’re doing. No big shocker there — these people are smarter than me.

    The price will be high. Again, surprise surprise! I’m paying for that track record.

    Just put a check into it. End of story.

    Mistakes are inevitable, especially in venture capital. The future is hard to predict.

    But I will not make this mistake again.

    More on tech:

    Meet My Latest Investment: Querio

    The Coolest Startups from YC W25

    I’m About to Close the World’s Tiniest Venture Fund

    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. 

  • Stay Out of Debt

    I once met a startup that was $700,000 in debt. Never do this.

    Angels and VC’s invest money to buy shares in a company. If the company runs out of cash, you don’t have to pay us back.

    But there is another source of funding for startups: debt.

    First off, let me tell you in the strongest possible terms: before you sign anything, get legal advice. Going cheap here could cost you your butt.

    Now, let’s look at the various types of debt you commonly see at startups. Here are 3 types I see over and over:

    1) Venture debt. These loans are usually given by banks that specialize in working with startups, such as SVB.

    The loan usually comes along with a round of equity funding from venture capitalists.

    In most cases, venture debt does not include a personal guarantee. However, you should absolutely have your lawyer look over any paperwork to be certain that there is no personal liability.

    Venture debt was traditionally used by huge, pre-IPO startups. They have predictable financial models and can be pretty sure of their ability to pay back the loan.

    But increasingly, earlier stage startups are layering on venture debt. This is very risky.

    2) On Deck Loans. One of the biggest providers of general small business loans is a company called On Deck.

    These loans are very different from venture debt. They involve a personal guarantee.

    That means that if the business fails, On Deck can pursue your personal assets.

    Take on debt like this, and you put everything you have at risk.

    3) Stripe Loans. These are based on the revenue from your business. They usually don’t include a personal guarantee, but you absolutely must verify this before taking on any loan.

    Stripe may offer you one of these loans without you asking. But think long and hard before you take it.

    It’s very tough to make a business work. If you have to pay out a ton of your revenue to Stripe, it just got a lot harder.

    I was once an investor in a startup that wound up paying a huge percentage of its revenue to Stripe because of a loan. The startup failed.

    Don’t let this be you.

    My View on Debt for Startups

    No startup should ever take on one single penny of debt. Not for any reason.

    Building a billion dollar company is next to impossible anyway. Do you want to make it harder by layering on debt?

    No, you don’t.

    I am a huge proponent of the free market. I’m glad banks like SVB can offer venture debt and business loan providers like On Deck and Stripe can offer their loans.

    It’s a free country.

    But that doesn’t mean you need to take it.

    Wrap-Up

    If you study the all time greats in business, they have one thing in common: they avoid debt.

    Charlie Munger. Hetty Green, the richest woman on the planet around 1900. You name it.

    The same is true of little old Francis. I have never taken on debt for a business. The only personal debt I ever had was a $1600 school loan, which I paid off in 2006.

    Debt raises your risk. Life is risky enough.

    Whether as a business or personally, you can prosper without it. And when the tough times come, you’ll survive.

    The folks who are $700,000 in debt? They won’t.

    There will be no blog on Monday for President’s Day. See you on Tuesday!

    More on tech:

    What VC’s Won’t Tell You About Europe
    Meet My Latest Investment: Querio

    I’m About to Close the World’s Tiniest Venture Fund

    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.