Three Priorities for the Trump Administration

November 12, 2024

In just 68 days, Donald Trump will be inaugurated. These should be his priorities:

1) Peace in Ukraine. Ending the war in Ukraine is the biggest reason I voted for Trump.

Today, our weapons are being used to attack the Russian homeland. Russia may react to this with nuclear weapons.

As we edge closer and closer to a hot war with Russia, we are risking WWIII. Such a war would mean the end of human civilization.

Trump has pledged to end the war immediately. This should be the new administration’s top priority.

Ukrainians probably won’t like the solution. Neither will Russians.

But that’s what negotiation is — everyone gets what they don’t want.

Already, Trump is taking steps to end the conflict. He has met with both Zelensky and Putin since winning the election a week ago.

2) Cutting Spending. US federal government debt is over $35 trillion. We must get this debt down before we spark a financial crisis.

We don’t know where the line is between a manageable debt level and the level that causes a crisis. But once we cross that line, it will be too late.

Trump and Elon’s Department of Government Efficiency can go a long way to fixing this problem. We have too many people writing too many regulations.

If we deregulate, we save money on salaries. We also free American business to innovate, which will grow the economy.

A bigger economy makes that debt burden easier to service.

3. Sealing the Border. We can’t get rid of criminals who are American citizens. But we can get rid of those who are here illegally.

Trump made the chaos on the southern border a key part of his campaign.

His early appointments of Tom Homan as border czar and Stephen Miller as Deputy Chief of Staff show that Trump is serious about this issue. Both are immigration hardliners.

At the same time, we should bring in as many high skilled immigrants as we can! They help grow our economy.

Elon will have Trump’s ear on this. So I’m hopeful that high skilled immigration will continue and even accelerate.

Wrap-Up

President Trump faces a lot of serious problems when he’s inaugurated in January. The most critical things to address will be the war in Ukraine, government spending, and the chaos on the border.

I’m delighted to see him making progress on all these issues just days after being re-elected.

It’s going to be a great 4 years!

What do you think the Trump administration should prioritize?

More on Fundrise in this post.

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How Are the Recent IPO’s Doing?

November 8, 2024

Note: This is not investment advice.

Most startups are terrified to go public. But a brave handful have entered the public markets recently. So, how have they done? Is the IPO window finally opening up?

Let’s go through 4 tech companies that went public in 2023 or 2024 and see how they’re faring…

ARM – This semiconductor company went public last September. Its stock has more than doubled since, driven by enthusiasm for the chip sector. AI is using huge numbers of chips, which can benefit companies like ARM.

ARM is solidly profitable, running at about a 15% margin. It’s also growing almost 20% a year.

A hot sector, substantial profits, and solid growth — no wonder the markets like it! Of these 4, it looks like the most solid company.

Klaviyo – For those of us who do a lot of SaaS, Klaviyo is the most important company to watch.

This email marketing platform went public around the same time as ARM. The market’s reception has been muted — the stock has been flat since the IPO.

Klaviyo is growing about 25% YoY and making a small loss. If it could get to profitability, the stock could rip.

Still, it’s hardly a wipeout.

Instacart — This household name went public around the same time as ARM and Klaviyo and has prospered in the public markets. It’s up more than 50% since going public.

A VC I know was one of the first investors — I bet he’s drinking some pretty fine wine these days!

Markets have embraced Instacart despite huge losses and only modest growth. The company has lost nearly $1.7 billion in the last year.

To me, the stock seems overpriced. But time will tell.

Reddit — The biggest surprise on this list is Reddit. The social media site went public in March and has nearly tripled since!

Investors are excited about the potential for licensing deals with AI companies. That could bring in big money. Already, Reddit has signed deals with Google and OpenAI.

The company may have big potential, but its finances today are strained. It lost over $500 million in the last year. Growth is solid but not enough to justify those kind of losses.

Like Instacart and much of the stock market right now, Reddit seems priced to perfection.

Wrap-Up

Overall, the market has been incredibly receptive to these companies.

3/4 are up and one is flat. Nobody has been wiped out in the public markets.

For all the talk of public markets wanting profitability, big losses haven’t stopped these companies. Instacart and Reddit are losing gobs of money and their stocks are doing great.

In all, the IPO window is looking pretty open to me. Let’s get our startups public and secure those bags!💰

Which of these stocks is your favorite?

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

More on tech:

Why VC’s Hate Solo Founders

Pitch Deck Roast: LightHaus

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

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I wrote a detailed review of Misfits here.

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

Why VC’s Hate Solo Founders

November 7, 2024

Now that we’ve got that pesky election over, we can talk about what’s really important: why do VC’s hate solo founders? If there’s one thing that makes VC’s pass on a company, it’s the lack of a co-founder. Of my 32 investments, all but 5 have at least 2 founders.

Here’s why VC’s hate solo founders…

Single Point of Failure

If you’re a solo founder and you quit, my investment goes to zero. That’s one reason that single co-founder companies tend to have a higher mortality rate.

Multiple co-founders improves my odds. Even if one quits, there will be one or more to carry on and hopefully get me my money back.

Everybody Needs Somebody Sometimes

Building a startup is incredibly hard. You might want some help! And don’t forget, your competitors will have it.

The ideal team is a couple of coders and a good sales/marketing person. The engineers can build an awesome product and the third co-founder can go out and sell it like crazy.

But co-founders don’t just help with business. When emotions run high, they’re there as someone to lean on.

Failing On Your First Sale

Selling a talented person on leaving a secure corporate job and joining some fly-by-night startup is the first sale you have to make. It’s also one of the hardest.

When you show up without a co-founder, we start to wonder. “Did Jim just fail in making that critical first sale? What else might he fail at? Is he really a winner?”

Some founders stay solo by choice. But investors will often assume you’re by yourself because you couldn’t convince anyone to join you.

And If You Run Out of Money…

Startups have a way of running out of money. If you do, those salaried employees are out.

Only the co-founders will stick around. They’re incentivized by huge blocks of stock.

How to Find a Co-Founder

“How do I find a co-founder?” I can’t count how many people have asked me that.

I’d avoid the co-founder matching platforms. Someone you don’t know is a huge risk. If they don’t work out, getting rid of them is a giant pain.

Instead, think about the best people you’ve ever worked with. Then, go make the sale on joining your little startup.

When Investors Make an Exception

As much as I don’t generally like solo founders, I’ve invested in 5 of them. Why?

We are in the business of exceptions.

Every year, a handful of people will create a giant company. The only thing that matters in our business is to own a piece of it.

So, when we see an exceptional solo founder, we make the bet.

A fantastic solo founder might be someone who radiates ambition. They might be a really gifted salesman or engineer.

And of course, strong traction helps a lot in allaying concerns about that missing co-founder.

Looking at the 5 solo founders in my portfolio, they are a little more successful than average.

Maybe my filter is tighter for these companies. And maybe I should start doing more of these deals.

Wrap-Up

Being a solo founder makes raising money harder. It’s a problem, but it’s not insurmountable.

If at all possible, you should find a co-founder. But if you can’t, soldier ahead on your own and build something great.

If you’re exceptional, you’ll get funded regardless.

Do you have co-founders? Why or why not?

More on tech:

Pitch Deck Roast: LightHaus

Small Investors Lead to Big Investors

Meet My Latest Investment: PodcastAI

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

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I wrote a detailed review of Misfits here.

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

Six Ways Trump’s Win Will Change America

November 6, 2024

I don’t know about you, but I’m a little groggy today! But from the death of polls to the end of Haley Republicans, I wanted to share with you a few ways I think this election will change America.

Haley Republicans Are Over

For almost a decade, there’s been a huge split in the Republican Party — neocons like Haley and Romney vs. the MAGA movement.

That split is over with.

Trump has won 2 out of the last 3 elections. He’s on track to sweep every single swing state.

He’s even ahead by nearly 5 million in the popular vote. No Republican has won the popular vote in 20 years.

Above all else, every political movement wants to win. Trump has proven himself a winner.

The Republican Party belongs to Trump now.

What’s more, there are several popular MAGA Republicans waiting in the wings to take over after Trump’s term. J.D. Vance and Tulsi Gabbard will be strong contenders — I’d love to see them run together!

Polymarket Crushes the Polls

Almost every poll predicted an extremely close election. They were all wrong.

Trump is on track to win nearly every swing state by 2-5%, a tidy margin. The closest is Wisconsin, but Trump still won by around 30,000 votes.

Trump is even ahead by about 5 million in the popular vote. Almost every poll had the two candidates tied in the popular vote or Trump behind.

Polls being this inaccurate shouldn’t surprise us. Who answers these things?

I’ve never once been called. Neither has anyone I know, even people in swing states.

And even if they did ring me up, I never answer a number I don’t know! You probably don’t either.

Throughout this contest, the most accurate predictor was Polymarket. Polymarket showed Trump doing far better than the polls did.

I discounted Polymarket since the market is thinly traded. But it proved accurate.

Polymarket has gotten enormous exposure in this election. The next presidential race will see way larger trading volume, making the numbers even more reliable.

In 2028, people will be going to Polymarket first.

The Podcast Election

Trump did Rogan. Harris didn’t. That mistake may have cost her the presidency.

When you listen to Trump for 3 hours, it’s hard to see him as the monster the media makes him out to be. He seems normal, human.

He also shows the humility to take the time and talk to the people. Harris behaved like a ruler, granting audiences only to a chosen few and keeping them brief.

Trump blitzed every podcast known to man. It was surreal seeing him and Vance pop up on some of my favorites, like All-In and the Tim Dillon Show.

He let people get to know him through these shows. That unfiltered exposure may have put him over the top.

The X Factor

In 2016 and 2020, all social media was censored. Today, one platform is free: X.

Elon buying Twitter seemed like a laugh line when it happened in 2022. But it may be far more significant than we thought.

There is one place where you can challenge lies. There is one place where information is free.

Trump was able to get his message out without the media twisting his words. And when they tried to take statements out of context, like his comments about Liz Cheney, his supporters were free to rebut them.

Now that the people had free access to information, they chose Trump.

Abortion and Transsexualism Are Losing Issues

The median voter does not have an abortion. The median voter does buy groceries.

No wonder Harris lost!

People may care about abortion, but it’s not a decisive issue for most voters. And the most passionate pro-choice voters are solid Democrats anyhow.

Transsexualism is an even weaker issue.

Transsexuals represent a tiny percentage of the public. And although some non-transsexuals may support their agenda, it’s never going to rank above crime and the cost of living.

Democrats need to refocus on issues that normal people care about: safety and the cost of living.

VC’s — A Leading Indicator?

Finally, I think VC’s breaking for Trump proved to be surprisingly significant.

Say what you want about VC’s, but they know how to spot a trend. They’ve made billions doing it.

They could see the vibes shifting and the public getting sick and tired of the Democrats. They hopped on that trend and rode it to victory.

There aren’t many VC’s, but they’re becoming more influential by the day.

They pump millions into campaigns. Their podcasts, like All-In, are breaking through to the mainstream.

VC’s are natural Democrats. They’re a bunch of highly educated rich guys in California, for Heaven’s sake!

The left needlessly alienated them. Bashing success, pushing DEI, and blocking M&A just proved more than VC’s could take.

Wrap-Up

I couldn’t be more excited about Trump’s victory! A clean sweep of the swing states was beyond my wildest dreams.

I think America’s best days are before us. We have a president committed to restraining government, ensuring safety and security, and working for peace in the world.

It’s time to accelerate.🚀

What are your thoughts on the election?

More on Fundrise in this post.

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Pitch Deck Roast: LightHaus

November 5, 2024

My buddy Jesse is raising $600,000. He just sent me his deck and asked me to tear it apart in public. You’re a brave man, Jesse! Let’s get started…

Jesse’s startup is called LightHaus. It’s an app to provide kids with art therapy.

Jesse asked me to be brutal. But honestly, this is better than 90% of the decks I look at.

Let’s look at what Jesse did right and where he can improve…

The Good

Right away, Jesse makes it clear what the company does. Lighthaus is an app that provides art therapy to kids.

I cannot tell you how many decks I read through and still have no clue what the company does 20 slides later. That means the deck has failed completely.

Not only is Jesse clear, he’s also concise, keeping his deck to just 12 slides. That’s a good length to aim for.

I also love that he made the “Team” slide the 2nd slide in the deck.

Especially in early stage companies, I’m betting on the team above all. So I want to know who they are right away!

Jesse also shows clear traction. LightHaus’s revenue is growing really fast!

In all, Jesse hits every important point in this deck: vision, team, traction, competitors, TAM and ask.

The Bad

Right on the first slide, I see a big problem: “A product of Mr Bray Labs, LLC.”

If you want to raise money, your startup cannot be an LLC. I wrote a detailed post recently on why.

But fortunately for Jesse, this is an easy problem to fix. Any lawyer familiar with startups can convert you.

There’s a 2nd red flag in this deck: Jesse appears to be a solo founder. I’ve backed solo founders before, but only rarely.

VC’s usually look for 2-4 co-founders. If Jesse had a co-founder (preferably someone technical), he’d raise money much more easily.

I also found the “Go to Market” slide confusing.

Jesse mentions “APA/licensure approval.” Does that mean the American Psychological Association has to approve this before we can move from pilots to annual contracts?

Many investors aren’t familiar with professional body approvals. So, it would be good to include a little more detail there.

Finally, the TAM slide is incorrect.

What you want to do is calculate a bottoms-up TAM. What do you charge for your product, and how many potential customers are there?

For example, if there are 5 million children who need art therapy and the product is $20/month, the bottoms-up TAM would be $1.2 billion.

I would skip the SAM/SOM stuff. I never look at that anyway — a bottoms-up TAM should be enough.

Wrap-Up

Overall, Jesse’s deck is excellent.

It’s clear and it’s short. That’s what you want to aim for.

If Jesse found a co-founder, converted to a C Corp, and fixed that TAM slide, he’d be in a very strong position to raise $500,000 to $1 million.

What do you think of Jesse’s deck?

I hope you enjoyed this respite from all the election coverage! Whatever happens, we have work to do!

More on tech:

Why Your Startup Must Be a Delaware C Corp

The Big 3: Vision, Team and Traction

Meet My Latest Investment: PodcastAI

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

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Are Hundreds of Universities Headed for Bankruptcy?

November 4, 2024

The University of the Arts taught students for almost 150 years. In June, it closed suddenly. Is this the future for hundreds of universities?

Many colleges are facing a bleak future: declining enrollment, increasing costs, and empty coffers. The idea of a college closing its doors used to be unthinkable. Today, about 2 a month are going under.

The University of the Arts may be the canary in the coal mine.

Declining Enrollment

Every fall, fewer Americans are heading off to college. The numbers peaked in 2010 at 21 million students and have fallen to 18.6 million.

Americans are having fewer children. And given the high costs, many young people are questioning whether college is worth it.

No matter how good your school is, you’re swimming against that tide.

Excessive Costs

The University of the Arts wasn’t cheap.

Tuition was $54,290 a year. Add in living expenses, and you’re looking at around $80,000. A four year degree would run you over $300,000.

It’s hard to justify tuition like that at a school no one has ever heard of.

Take University of Wisconsin-Madison, my alma mater. Tuition is under $12,000 and name recognition is far better. If you can’t get in, there are countless other state schools that charge a lot less than $55k.

How did the costs at some colleges get so high? One reason is an explosion of administrators.

From Forbes:

Between 1976 and 2018, full-time administrators and other professionals employed by those institutions increased by 164% and 452%, respectively. Meanwhile, the number of full-time faculty employed at colleges and universities in the U.S. increased by only 92%, marginally outpacing student enrollment which grew by 78%.

I have no idea what all these assistant vice provosts of diversity do. But at an average of $150,000 a pop, they certainly cost students plenty.

The Price of Education Goes to Zero

Small, private schools like University of the Arts are having a hard enough time competing. But what happens when the cost of education drops to zero?

While I was writing this article, I used ChatGPT Search to find lots of information. Effectively, I got a tutor on the subject for $20/month.

And it worked — I learned a lot!

Today, you can have ChatGPT or Perplexity tutor you on any subject. It knows pretty much everything and it never runs out of patience. And unlike a big university lecture, AI can tailor its lesson to you.

Only a handful of top schools like Harvard can teach you better than AI. Now, all that’s missing is a credential to show what you’ve learned.

Startups will pop up to fund that gap in the market. Already, Coursera can give you a unique ID to prove you took a class.

Wrap-Up

Call me a jerk, but I love seeing places like University of the Arts go out of business.

For decades, they charged people ridiculous prices for a degree from a place no one’s ever heard of. How many people are struggling with debt from this marginal institution?

For top colleges like Harvard or even UW-Madison, the future is secure. They have name recognition and multibillion dollar endowments.

But no-name schools charging you $60k? That’s over.

The cost of education is going to zero. And we’ll be better educated than ever.

How do you think people will learn in the future?

More on Fundrise in this post.

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·

ChatGPT Search vs. Google: Which Should You Use?

November 1, 2024

Google is in serious trouble. Yesterday, OpenAI dropped ChatGPT Search, its new Google killer. ChatGPT Search can pull realtime data from the internet to answer your questions.

But is it better than Google? This morning, I tried 3 real questions I needed answered on both ChatGPT Search and Google.

Let’s see who wins!

1) Market data. Sitting in North Jersey a little past 9am this morning, I wondered where markets would open. Yesterday was a rout…how are things looking?

I asked ChatGPT Search where the e mini is trading. This is a futures contract on the S&P 500 and indicates where the market may open.

Let’s see how it does…

ChatGPT Search nailed it, pulling up-to-the-minute data on the e mini. Looks like we’re headed for a strong open!

Now, let’s try Google…

Google produces a different result, showing that the market is set to open flat.

So, who’s right? I clicked through to Marketwatch to find out…

Turns out, ChatGPT Search was 100% accurate and Google was completely wrong.

Google’s answer was worse than useless — providing incorrect data is counterproductive. It would’ve been better to just refuse my query.

ChatGPT Search stomped Google on this round. On to #2…

2) Perplexity funding. I heard that Perplexity is raising a new round. What will the valuation be?

Let’s ask ChatGPT Search…

ChatGPT Search pulls up an answer right away and gives us multiple, reliable sources. Great work!

On to Google…

Google gives us the same answer, and both are correct. So, this one’s a tie.

Now that ChatGPT has realtime search, I think Perplexity’s dead. My bet is this will be a small acquisition for somebody.

3) Will dinner get rained out? I’m supposed to meet a friend in the city for dinner tonight. Singaporean! Yum yum.

But it’s looking pretty grey this morning. Will I get soaked on the way over?

Let’s ask ChatGPT Search…

ChatGPT Search gives a very precise answer. Looks like we’re all clear!

On to Google…

Google doesn’t answer my question directly. However, it does provide a nice little graph showing the chance of precipitation throughout the day.

It’s not a direct answer, but Google’s response gives me useful detail on today’s weather. Looks like it should be all clear come dinner time.

I’ll call this one a tie.

Wrap-Up

We saw 2 ties and one win for ChatGPT Search. ChatGPT Search takes the day!

Let’s keep in mind, this product is 24 hours old. It’s only going to get better.

If I were Google, I’d be terrified right now. They need to release a competitor to this ASAP.

Order pizza, work all night, make it happen.

And if I’m at Perplexity, I’m sending out resumes right now. I think that company is a 0.

What do you think of ChatGPT Search?

More on tech:

Meet My Latest Investment: PodcastAI

Clone: The Most Human Android Yet?

Climb, Crawl, Fly, Swim: Jake Loosararian 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.

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Misfits Market

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I wrote a detailed review of Misfits here.

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

Why You Won’t See Me at Tech Events

October 31, 2024

If you’re selling sausages door to door, you don’t go to the vegan co-op. If you’re trying to find great founders, you don’t go to a tech event.

When I first started as an angel investor, I went to tons of tech events. For a year, I made sure I hit two per week minimum.

Luckily, I live in the NYC area where there are countless events every day. But now, I only hit a couple per year.

Here’s why…

Great Founders Aren’t at Events

After a year of hitting every event I could find, I took stock. What did I have to show for it?

Countless trips, untold hours. The answer: not much.

I had made numerous investments that year. But I didn’t meet any of those founders at events.

I also noticed something else…

“I’ve invested in a lot of great founders, some in NYC. But I’ve never seen any of them at a tech event.”

The great founders aren’t standing around eating shrimp cocktails. They’re building product or talking to customers.

Those are the levers that move a business forward. The best founders pull those levers relentlessly and ignore everything else.

What Is Worth Going To

One thing I love doing is meeting in person with founders I’ve invested in. I try to do this whenever they’re in town, if they have the time.

It’s great to hear about what they’re building. Sometimes, they just need someone to listen, and I’m happy to do that.

I also get the chance to assess them as a person. That’s 10x easier in the flesh.

That assessment informs follow-on bets. When I met a wonderful founder of mine in person last summer, I was amazed at how he knew every detail of his business.

When the Series A happened that fall, I felt confident doubling down. This summer, I had a chance to see him again and congratulate him on the round.

I also make sure to hit the demo days of top accelerators. This is some of the best dealflow there is.

Luckily, many are online.

Wrap-Up

“The main thing is to keep the main thing the main thing.” That’s one of my favorite quotes.

It’s simple. But darn if it isn’t hard to do!

It’s easy to accept these very kind invitations that so many folks extend. But I have to have the discipline to say no.

My business is meeting great founders. Anything that doesn’t get me closer to that has to go.

So if you don’t see me at the next tech event, you know where I’ll be: sitting on Zoom, looking for the next Elon.

Do you go to tech events?

More on tech:

Small Investors Lead to Big Investors

Meet My Latest Investment: PodcastAI

Why Your Startup Must Be a Delaware C Corp

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 Superinvestors of Graham and Doddsville

October 30, 2024

“If people weren’t so often wrong, we wouldn’t be so rich.”
Charlie Munger

Very few investors beat the market long term. Those that do tend to have one thing in common: they’re value investors.

In 1984, Warren Buffett wrote a fascinating article about these top performing investors. Today, I dug into The Superinvestors of Graham and Doddsville for the first time.

What can an angel investor learn from these outstanding public market managers?

A History of Massive Outperformance

Buffett digs deep into the raw numbers for 9 top funds, all value investors. Each one has massively outperformed the stock market.

Most of these names are unfamiliar. But they’re crushing the big boys in finance, beating the market from between 8% and 16% a year.

Over time, that results in a colossal difference in wealth.

Take Tweedy Browne, one partnership Buffett profiles. From 1968 to 1983, the S&P would’ve tripled your money. Tweedy Browne grew it 10x.

Among all these top investors, the best is Buffett himself. His Buffett Partnership, which he ran before Berkshire Hathaway, turned in 23.8% annualized returns net of fees over 12 years.

What These Superinvestors Have in Common

“The investors simply focus on two variables: price and value.” – Warren Buffett

What these superinvestors do is very simple: they buy businesses for less than they’re worth. A lot less.

Although most of them bought publicly traded stocks, they looked at each stock as if they were buying the whole business. So instead of trying to figure out what the stock will do next week, they asked themselves, “Is this a good business, and is the price fair?”

It seems obvious. But hardly anyone does it.

“The common intellectual theme of the investor from Graham and Doddsville is this: they search for discrepancies between the value of a business and the price of small pieces of that business in the market.” – Warren Buffett

This does not mean buying the very cheapest company you can find. Instead, Buffett and other top value investors buy great companies that are trading below their real worth.

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffett

How I Apply These Principles as an Angel Investor

I recently met a young founder who had a great AI startup. He’d built the company to $1 million in revenue, and I was really impressed with the product.

But the price just didn’t make sense.

He was raising at a $50 million valuation. That’s 50x ARR.

I had done two other deals this year with a similar amount of revenue. One was at a $5 million post, another at $12 million.

Both had stronger growth than this pricey startup.

Reward vs. Risk

A $50 million valuation at this early stage takes away most of my upside.

Let’s assume it becomes a billion dollar company. Given that I’ll probably lose half my gains in dilution, I’d only be sitting on a 10x return.

In the typical fund of 30-40 investments, this doesn’t come anywhere near to returning the fund.

Now, what if that startup raised at a $10 million post? My return would be 50x fully diluted, enough to return the fund and then some.

Investing in startups is risky. Without enough upside in the winners, I won’t see a return. It comes down to another observation from Buffett:

“The greater the potential for reward in the value portfolio, the less risk there is.” – Warren Buffett

Wrap-Up

Buffett-style stock picking seems very different from investing in venture capital. But they operate on the same principles.

We have to buy assets for a lot less than they’re worth. The more upside we have, the lower our risk.

Whether you’re talking Coke stock or startups, that means backing the best at a reasonable price.

What do you think of Buffett’s advice?

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Is YouTube Censoring the Rogan Podcast?

October 29, 2024

Since there's an issue with searching for this episode on YouTube here is the full podcast with Trump pic.twitter.com/sl2GTUaWdE
— Joe Rogan (@joerogan) October 29, 2024

It was the most popular podcast in the world. So why couldn’t I find it anywhere? The Joe Rogan interview with Donald Trump has passed 37 million views, but yesterday on YouTube, it was nowhere to be found.

I tried typing in “joe rogan trump,” “joe rogan trump full interview,” you name it. But the only way to find the episode was to go to the podcast’s YouTube profile and hunt for it.

Countless viewers had the same problem. So is this just a technical glitch, or is YouTube censoring Trump?

An Algorithmic Glitch?

On a recent episode of This Week in Startups, host Jason Calacanis said that the problem may be a quirk in the YouTube algorithm. It can prioritize short videos over long ones.

I don’t think this is the culprit. I’ve had no problem finding other full interviews from JRE, including a great one with Chamath.

Mass Reporting?

A more likely possibility: mass reporting of the Trump interview.

🚨 SCOOP: YouTube Joe Rogan Censorship

We were reached out to by a Google employee who shared that YouTube has marked the video as XLQ which means Extremely Low Quality Spam. This can happen in a couple ways, but the most likely way is a mass reporting of the video. Once a…
— Autism Capital 🧩 (@AutismCapital) October 28, 2024

An anonymous account on Twitter claims a Google employee contacted him to tell him that the video could’ve been marked as spam. This can happen when a lot of people report a video.

There’s no way to verify this claim. But it’s not hard to imagine a bunch of lefties reporting the interview simply because they don’t like Trump.

Plain Old Censorship

Another possibility is that Google intentionally censored the video. We don’t have evidence of that, but it wouldn’t surprise me.

YouTube has a history of censoring political content. Other social media platforms like Facebook and pre-Elon Twitter routinely did the same, often working with the government to remove information.

If Google did censor it, I hope a whistleblower tells us.

Better Alternatives to YouTube

There are two possibilities here: either YouTube search stinks or they’re censoring content. Either way, I’m not wild about using it.

I suggest you do what I did: listen to the podcast in your podcast player. These players operate over an open standard called RSS, which cannot be censored.

Rogan also uploaded the entire episode to Twitter, which you can see above. That’s a great option for content creators because Twitter will not censor you, unlike other platforms.

Wrap-Up

As of today, I’m able to find the interview on YouTube. But what really happened here?

YouTube either dropped the ball or purposely tried to interfere with the election.

For what it’s worth, I loved the Rogan/Trump interview. As you listen to them chat for 3 hours, Trump doesn’t feel like the monster the media makes him out to be.

He feels human.

Whatever our politics, I hope we can agree that censorship is wrong. And I hope to hear Harris on the show soon!

More on tech:

From $50 Million to $50 Billion: Thomas Laffont at the All-In Summit

Meet My Latest Investment: PodcastAI

Talking Investment Red Flags on the Mr. Bray Labs Podcast

Save Money on Stuff I Use:

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