Tremendous

An angel investor's take on life and business

  • The High Growth Handbook: Scaling Startups from 10 to 10,000 People

    Elad Gil is a Silicon Valley legend. After selling his startup to Twitter, he helped the company scale from 90 to 1500 people in under 3 years.

    He’s also had enormous success as an angel investor, investing in startups like Airbnb, Coinbase, Square and Stripe.

    So I was very excited to dig into his book, The High Growth Handbook. In it, Gil lays out his best tips for scaling a company at warp speed, along with interviews with a who’s who of tech.

    Here are some of the best pieces of advice I found:

    How to Hire

    “Hire only after there’s a burning need for that person.”

    Naval Ravikant

    Gil’s approach to hiring is carefully structured. He suggests writing a job description for every position and asking each interviewee the same questions.

    But even better than questions are actual tasks. The best way to assess someone’s skills is to have them complete a task similar to what they’ll do on the job.

    He also counsels interviewers to write down their opinion of the candidate before speaking with other interviewers, to avoid groupthink. This is the same process used at Amazon.

    And when you do find the right person, move fast!

    How to Lead

    So you’ve got your ideal employees. Now what?

    In an interview with Sam Altman, Altman says that setting the company’s direction is just 5% of a CEO’s job. The other 95% is making sure it happens.

    “Delegation is not abdication.”

    Gil also recommends holding skip level meetings with junior employees that don’t report to you. They tend to have their finger on the pulse of the market and are closer to the customers.

    How to Rest

    Gil used to work every weekend and even on “vacations.” But now, he tries to fully unplug.

    This is something I struggle with! I was meeting with a company founder at nearly midnight on my vacation in Barcelona while my wife waited patiently upstairs.

    We have to remember that if someone as successful as Gil can unplug for a few days, we can too!

    In all, I found this book a very practical guide to building startups. My only criticism is that with the mix of interviews and Gil’s writing, and the jumping between topics, the book feels disjointed.

    I think it would be more effective if it followed a company from birth to IPO, examining the challenges it faces on the way.

    Nonetheless, if you’re interested in startups, Gil’s advice will help you. Check it out!

    More on tech:

    What I Look For in Startups

    How Startup Founders Turn Investors Off

    The Top 3 Startup Pitch Mistakes

    Photo: “Elad Gil” by jdlasica is licensed under CC BY 2.0

    If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Amazon Business American Express Card

    You already shop on Amazon. Why not save $100?

    If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

    Best of all: No fee!

    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 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. 

  • GameStop Now Accepting Dozens of Cryptocurrencies

    GameStop Corp. is now accepting dozens of cryptocurrencies including Bitcoin and Dogecoin, per a report from Investor Place yesterday.

    These cryptocurrencies can be used at any one of GameStop’s locations or online. GameStop is using the Flexa network, which supports a wide variety of cryptocurrencies.

    This comes shortly after AMC Entertainment Holdings, Inc. began accepting crypto payments, including Bitcoin and Ethereum.

    Meme stocks trying to draw in the adjacent crypto community is a wise move. All marketing costs money, but accepting crypto provides a bunch of press attention for the minimal cost of joining the Flexa network.

    Flexa appears quite robust, with tens of thousands of retail locations on its platform. It reminds me of a Square for crypto; easy payment acceptance for merchants.

    If GameStop ever delivers streaming games on its own platform, crypto payments could be particularly useful. Unlike with credit cards, customers from all over the world could purchase access with no foreign exchange fees.

    Will accepting crypto payments make or break GameStop or AMC’s business? Of course not.

    But for businesses that rely on foot traffic, anything that builds buzz at low cost is a huge win!

    What do you think of GameStop and AMC accepting crypto payments? And who do you think will be next?

    Let me know in the comments below.

    This is the last blog for this week. I’ll see you again on Monday.

    Merry Christmas!

    More on markets:

    Hedge Fund Paid Researcher to Write Misleading Reports on Seeking Alpha

    Parody Site Sues Citadel to Stop Shutdown

    How Did High Dividend Stocks Perform In the Last Crash?

    Photo: Photo: “Retail GameStop” by ccPixs.com is licensed under CC BY 2.0

    If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Amazon Business American Express Card

    You already shop on Amazon. Why not save $100?

    If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

    Best of all: No fee!

    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 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. 

  • What I Look For in Startups

    You’ve been meeting with investors day after day. You get a lot of “very interestings” but no actual checks.

    What are these people looking for?

    Today, I thought I’d explain what I look for in a startup.

    As an angel investor, I invest in about 1-2% of the companies I see. Here’s how I choose:

    1) Are you solving a big problem? Take Uber: it gets you from anywhere to anywhere, anytime, easily.

    Mobility is a huge problem. Any technology that can make it easy to get places has a giant potential market.

    What is an example of a company that isn’t solving a big problem? Imagine a better way to search tweets.

    That’s a feature, not a product. It’ll probably get copied by Twitter or Twitter will buy it for a small sum.

    2) Are you growing revenue 20% month over month? I want to see clear signs that your vision is shared by customers.

    Dollars in the door are the best sign there is. I find about 2-3% of seed stage startups are growing this fast.

    If the company is pre-revenue, I would also find a similar growth rate in users quite persuasive. But revenue is best.

    The greatest companies of today, like YouTube, had incredible growth early on. That’s what I’m looking for.

    3) Is the product awesome? If there’s any way for me to use the product, I always do so before investing.

    Maybe you have great early growth, but if the product isn’t solid, it may be hard to sustain that pace.

    If I can’t use the product (most B2B SaaS, for example), I ask for a detailed demo. I also read every review of the product I can find.

    3) Is there good founder/market fit? If you used to work on M&A at Goldman Sachs and you started a company to help people find sustainable clothing, I’m going to have a few questions.

    Why would you start a business that is so far removed from your background? Perhaps you have solid reasoning, like a long-term commitment to environmentalism via volunteer work.

    Or maybe you’re just in it for the buck. I have nothing against making money, but starting a company is so hard that if the motivations are only pecuniary, you will likely give up.

    4) Are you raising at least $1 million? Most companies I invest in are raising $1-3 million seed rounds.

    Why does this matter? Companies that raise a seed round of at least $1 million are far more likely to be successful, per a Crunchbase analysis.

    A big round means you can hire lots of developers and sales people. That lets you get ahead of your competitors, fast.

    When I see companies raising a round of $250-$500k, I often think this isn’t enough to move the needle.

    I hope this helps clarify how investors pick startups. Other investors may have different processes, but I think you’ll find a lot of similarities.

    Best of luck and happy fundraising!

    More on tech:

    The Original YouTube Investment Memo

    How Startup Founders Turn Investors Off

    Why I Just Invested in Gauge, the Best Way to Sell Your Car

    Photo: “Historical Documentation Defenestration WHY Sign” by Lynn Friedman is licensed under CC BY-NC-ND 2.0

    If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Amazon Business American Express Card

    You already shop on Amazon. Why not save $100?

    If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

    Best of all: No fee!

    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 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. 

  • AMC: An Innovator Since Vaudeville

    Today, AMC Entertainment Holdings, Inc. is known as one of the hottest stocks in the market, beloved by meme traders. But the company’s origins are decidedly more humble.

    AMC was founded by Edward Durwood, a vaudeville performer. After his group disbanded, he bought a theater in Kansas City.

    The year was 1920. Durwood was determined to enter the nascent movie business.

    The tiny company grew, and in the postwar era, AMC created the first multiplexes. It was even first to offer reclining seats with cup holders, now de rigueur at theaters everywhere.

    I was fascinated to learn of this history while digging into the Wall Street Journal’s weekend feature on AMC.

    What struck me most was the company’s history of innovation. And AMC continues to innovate today, despite the headwinds it faces from high rents and substantial debt.

    Much like Durwood entering the movie business at its beginning, AMC is taking advantage of new trends like cryptocurrencies and the popularity of the UFC. It is the only theater to accept crypto payments or screen the sought-after fights.

    I think AMC’s best chance for a strong future lies in embracing and doubling down on that history of innovation. Here are some moves for them to consider:

    1) Sell non-fungible tokens (NFT’s), rather than just giving them away as promotional items.

    AMC has a powerful meme trader following. That group has substantial overlap with the crypto community.

    AMC could also split the proceeds with the owner of the IP (such as Disney), a win-win proposition.

    2) Screen Netflix content. Many Netflix subscribers would probably like to see their favorite movies and shows on the big screen.

    But aside from a few very limited releases, customers are generally out of luck. This could be a huge source of exciting new content for AMC.

    Meanwhile, Netflix gets to partner with a company that has more screens than any other.

    3) Offer more extensive food and even alcohol.

    Many upscale theaters offer restaurant-style meals, providing a major source of new revenue. Why stop with popcorn?

    Alcohol could also be a massive new revenue stream with very high margins and less equipment needed than a restaurant. Licensing will be an issue, but other theaters have done this successfully.

    Here’s hoping AMC will continue to innovate for another 100 years!

    P.S. My one bone to pick with the WSJ article is its contention that there is no evidence of naked short selling. Persistent, large fails to deliver fly in the face of that claim, although they have moderated recently.

    More on markets:

    Hedge Fund Paid Researcher to Write Misleading Reports on Seeking Alpha

    Ken Griffin to Spend $300 Million to Defeat Governor

    How Did High Dividend Stocks Perform In the Last Crash?

    If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Amazon Business American Express Card

    You already shop on Amazon. Why not save $100?

    If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

    Best of all: No fee!

    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 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. 

  • How Startup Founders Turn Investors Off

    You’ve worked really hard on your pitch to investors. But what if some of the things you’re saying are actually turning them off?

    Here are several things that can be a negative signal to investors:

    1) No clear growth trend. If you don’t share information about month over month revenue or user growth, it’s almost impossible for me to say whether I want to invest or not.

    How do I know if the business is succeeding without seeing a trend? Be sure to include those numbers and compute a month over month growth rate using a tool like this.

    2) Showing irrelevant metrics. Some founders show incredible growth…in numbers that don’t matter.

    Whether it’s social media mentions, letters of intent, or some other creative metric, showing numbers like these make me think there is nothing more substantive.

    What’s substantive? Customers and product.

    Nothing else matters.

    3) A focus on patents. Some startup founders talk for 10 minutes about patents and 2 minutes about customers.

    To most investors, this will show that the founder doesn’t understand what drives success in software startups. IP is rarely a key driving force in a software company.

    You will have to deal with IP assignments and patents eventually. But unless you’re a biotech company, don’t make it the core of your pitch.

    4) Mentioning irrelevant awards. If you won a startup pitch contest or Forbes 30 under 30, congrats!

    But leave it out of your presentation. Much like presenting irrelevant numbers, mentioning irrelevant awards just makes investors think you don’t have anything more concrete to show.

    5) An unrealistic valuation. I am not a stickler on valuation if it’s a good, high growth company.

    But more and more, I see seed stage companies asking for valuations of $75 or even $100 million. Sometimes, they haven’t even launched a product!

    This just shows me the founder doesn’t understand the market. Fred Wilson of Union Square Ventures has clearly shown that venture firms cannot possibly make money on $100,000,000 seed rounds.

    Your goal should be a collaborative relationship with the investment community. You want to make money, and you want them to make money too!

    So keep it reasonable! When seed stage companies go much beyond $20-30 million, they’re getting ahead of themselves.

    A more realistic valuation would be about $10 million for most seed stage companies with solid growth.

    Founders work incredibly hard to raise money and build their companies. The last thing they want to do is torpedo their own pitch!

    If you follow the rules above and keep the focus on your product and customers, you’ll impress investors. You may even find them fighting to get in the round.

    Best of luck!

    More on tech:

    The Top 3 Startup Pitch Mistakes

    Why I Just Invested in Capbase, The Startup in a Box

    The Original YouTube Investment Memo

    Photo: “Stop sign at Curry Village in Yosemite National Park” by JcOlivera.com is licensed under CC BY-NC-ND 2.0

    If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Amazon Business American Express Card

    You already shop on Amazon. Why not save $100?

    If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

    Best of all: No fee!

    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 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. 

  • Ken Griffin to Spend $300 Million to Defeat Governor

    Major news today as Politico reports Citadel LLC CEO Kenneth Griffin may spend up to $300 million in the next Illinois selection. He is determined to unseat Democratic Governor J.B. Pritzker and push a slate of conservative candidates:

    A source who spoke to Playbook about [political operative] Mike Z, also said Griffin has committed $150 million to the campaign, which would match what Pritzker spent in his first run for governor.

    Other media reports have attributed “multiple sources” as saying Griffin is willing to spend as much as $300 million in next year’s election.

    Griffin was also behind a shadowy group that defeated a ballot measure for a progressive state income tax last year. The group is now interviewing potential gubernatorial candidates in secrecy, per Politico.

    I find the idea of a billionaire threatening to outspend a sitting governor single handedly while interviewing candidates in secret disturbing. This is not the type of proportional representation consistent with democracy.

    I also find the idea of the state’s richest resident, with a net worth of $21 billion, secretly campaigning to stop a fairly modest 8% top tax rate unseemly. Griffin has benefited enormously from the state but seems unwilling to give back.

    Wherever you turn, you seem to find Griffin and his firm. His hedge fund is conversing with Robinhood right before they limit trades, causing large losses for meme stock investors.

    At the same time, he’s investing in Melvin Capital, which had short positions in those same stocks. Now he’s the plutocrat kingmaker in Illinois politics.

    And he even picked up a copy of the Constitution for a cool $43 million. After all, Junior had to have it!

    Griffin seems determined to throw his weight around wherever he can. The question is, how long are we going to take it?

    More on markets:

    Hedge Fund Paid Researcher to Write Misleading Reports on Seeking Alpha

    How Solana Could Wipe Out Visa and MasterCard

    Parody Site Sues Citadel to Stop Shutdown

    If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Amazon Business American Express Card

    You already shop on Amazon. Why not save $100?

    If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

    Best of all: No fee!

    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 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. 

  • At the Top Dog Gala!

    On Tuesday night, I had the joy of attending the Top Dog Gala, a benefit for the Animal Medical Center (AMC) in New York City. AMC saved my little gerbil’s life three times and helped him live to a ripe old age, so I love getting a chance to support such a great cause!

    AMC is an incredible place. It feels like a high end human hospital more than a veterinary one.

    There are departments of hematology, orthopedics, radiology, you name it. The imaging machines they use were bought from human hospitals, just a couple years old.

    There’s nowhere better to take your pet. And despite the very high level of care, you’d be surprised how reasonable their prices are!

    On Tuesday night, we filed into the beautiful Cipriani 42nd Street in the heart of Manhattan. I had passed the building a million times but never been inside.

    It’s a beautifully converted bank with some of the teller windows still intact! I admired the massive windows and velvet curtains while munching on delicious snacks.

    As the dinner was about to start, a very funny older lady came from the bar:

    I’m getting a double. It’s going to be a long night with a lot of speeches.

    Chuckling to myself, I sat down at a table replete with flowers and the presentation began. AMC President Kathryn Coyne introduced us to Sadie, a very special German Shepherd who saved her owner Brian’s life when he was having a stroke.

    She licked Brian’s face to keep him awake after the stroke, then helped drag him to the phone to call for help. Without Sadie, Brian wouldn’t be here.

    They may not be able to speak, but it’s amazing how animals touch all our lives.

    We also met the canine officers of the Metropolitan Transit Authority (MTA) police! I was struck by their bravery.

    Humans sign up for that job. Dogs don’t. But they do it all the same, risking their lives to keep us safe.

    The Top Dog Gala made it clear how animals support us. But how can we support them?

    By supporting AMC! AMC gives away a fortune in free care every year for those who cannot afford it.

    But they can’t do that without our help! Please consider joining me in donating to this wonderful cause today.

    The cute doggies, kitties, birds and rodents will thank you!

    More on animals:

    Cute Animals Online: My Top 5

    The Real Groundhogs of New Jersey

    When The Cat Who Supported Her Through Cancer Got Sick, Jessica Knew What She Had to Do

    If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Amazon Business American Express Card

    You already shop on Amazon. Why not save $100?

    If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

    Best of all: No fee!

    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 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. 

  • Hedge Fund Paid Researcher to Write Misleading Reports on Seeking Alpha

    I came across an intriguing story today. A hedge fund was exposed in court for paying a researcher to release false reports on popular financial site Seeking Alpha.

    From Bloomberg:

    One cautionary tale emerged in court after Dallas-based Sabrepoint Capital agreed to pay a short-selling researcher a monthly retainer of $9,500 in 2018. Sabrepoint encouraged him to dig into real estate company Farmland Partners Inc. The researcher, who also wrote publicly under a pseudonym, later published an article on Seeking Alpha, setting off a 39% drop in Farmland’s share price. The company sued and used a judge’s order to force him to reveal his identity: Quinton Mathews. 

    Mathews later said in a statement that he subsequently learned his article “contained inaccuracies and false allegations” and retracted it.


    Sabrepoint likely booked a handsome profit from this “FUD (fear, uncertainty and doubt)” campaign. I’m all for confronting uncertainty and having doubts, but they should be well founded, not fabricated for profit.

    This does not appear to be an isolated incident:


    Studies by Columbia University law professor Joshua Mitts have found that short sellers’ reports can briefly induce bouts of panic selling before shares rebound. In those jittery moments — sometimes mere minutes or hours — well-positioned short sellers can cash out of trades and pocket significant gains.

    Mitts examined more than 1,700 reports made by pseudonymous short sellers from 2010 to 2017, concluding that they contributed to more than $20 billion in dislocated values or temporarily mispriced stocks.


    Given the massive losses hedge funds have taken in meme stocks like AMC Entertainment Holdings, Inc. and GameStop Corp. this year, I suspect hedge funds have used “short and distort” tactics in those stocks as well. It’s important to remember that information on sites like Seeking Alpha may not be reliable.

    The good news is the Department of Justice is investigating these and other hedge fund abuses. And unlike the SEC, the DOJ can charge people criminally and put them in jail.

    Here’s hoping justice prevails!
    What do you think of these “short and distort” campaigns and the DOJ investigation? Leave a comment at the bottom and let me know!

    More on markets:

    Parody Site Sues Citadel to Stop Shutdown

    How Did High Dividend Stocks Perform In the Last Crash?

    Citadel Holding Nearly $500 Million in AMC Options

    Photo: “BilLIARds” by Johnny Vulkan is licensed under CC BY-NC-SA 2.0

    If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Amazon Business American Express Card

    You already shop on Amazon. Why not save $100?

    If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

    Best of all: No fee!

    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 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. 

  • The Original YouTube Investment Memo

    Launched June 11. Has already overtaken all previously existing competitors and is now the dominant player in the space.

    Roelof Botha, Sequoia Capital, 9/2/05

    Today, YouTube dominates the internet.

    People watch 1 billion hours of YouTube. Every day.

    But as summer turned to fall in 2005, YouTube was just a three person company run by talented but obscure engineers. But someone saw their potential.

    Roelof Botha of Sequoia Capital led seed and series A investments in the company, one of the great bets of all time. It sold for $1.65 billion to Google just a year later.

    The original deal memo Roelof wrote in September 2005 was made public in its entirety via a lawsuit. As an angel investor, I was fascinated to read it this morning.

    So how did Roelof and Sequoia know that this tiny company would be a huge success? Actually, given the data they had, it was surprisingly obvious.

    YouTube’s traffic was exploding. In about 2.5 months, it had gone from 0 to far larger than its biggest competitors, Vimeo and Dailymotion.

    Over the prior 3 months, page views had grown at a compounded monthly rate (CMGR) of about 140%. To put that in perspective, I’m quite impressed when I see anything over 20% for an early stage company.

    With those metrics, almost anyone who had access to the deal would’ve invested. You don’t have to double every month that many times until you have something huge.

    Just as clear as its traction was YouTube’s value proposition:

    To become the primary outlet of user-generated video content on the internet, and to allow anyone to upload, share and browse this content.

    If you can’t summarize your startup’s mission as cleanly as this, keep trying!

    Roelof also could see where the market was going, as opposed to where it was. In 2005, broadband adoption was exploding and cameras were popping up on every device.

    The only thing missing was a way to share all those new videos. YouTube completed the puzzle.

    Interestingly, Roelof had worked with one of the co-founders at Paypal before joining Sequoia. It may be his network, rather than ability to read the tea leaves, that gave him the inside track to investing in YouTube.

    I think the biggest risk for an investor reading this deal memo would be to not put enough money in. You don’t see companies more than doubling every month very often.

    When you do, it’s time to go big or go home.

    More on tech:

    The Top 3 Startup Pitch Mistakes

    An Investor’s Dream Cold E-mail

    Why I Just Invested in Capbase, The Startup in a Box

    Photo: “Chad Hurley” by jdlasica is licensed under CC BY 2.0

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  • The Top 3 Startup Pitch Mistakes

    You’ve run through your deck a hundred times. You’ve practiced pitching to your cat.

    He declined to invest.

    Startup founders work incredibly hard to pitch their dream to investors and get funded.

    As an angel investor, I see a lot of presentations. So, I thought I’d share the 3 biggest mistakes I see founders making:

    1) Not clearly explaining what the startup does. If I don’t understand what your startup does and why within the first minute, you lost me.

    Investors are people too, and struggle with attention, especially given the number of presentations they see. A demo day I attended last week had 17 companies presenting.

    Don’t lose your audience! Clearly state exactly what you do and what problem you’re solving, ideally within the first 30 seconds.

    Being able to clearly and concisely say what you do also helps you attract customers and key employees.

    2) Not showing a growth trend.

    Don’t make us guess! If you’ve got a strong growth trend in revenue or users, put that graph on the screen.

    But don’t rely on our ability to read a graph that pops up for 20 seconds on a slide. Do the math for us.

    If you went from $2,000 in revenue in August to $5,000 in November, use a tool like this to find your compounded monthly growth rate. In this case, it would be 36%, which is outstanding.

    I saw a founder do this well at a demo day this fall. 6 weeks later, she raised a $3.5 million seed round.

    This stuff works!

    3) Not taking questions. If at all possible, you want to take questions from your audience.

    Even short presentations can allow for this. Some demo days might provide just 7 minutes per startup. But you can present for 3 minutes and take questions for 4.

    Every investor has objections you have to overcome before they invest. Give them a chance to overcome those objections by taking their questions.

    Answer clearly and concisely. You should be taking about the same amount of time to answer the question as they took to ask it, no more.

    I hope this helps! Fundraising can be exhausting and nervewracking, but if you follow a few simple guidelines, you can succeed.

    Best of luck!

    What have your biggest challenges been in pitching investors? Let me know in the comments at the bottom.

    More on tech:

    An Investor’s Dream Cold E-mail

    The Biggest Challenges for Startups Now

    Why I Just Invested in Kippo, Where Gamers Find Love

    Photo: “Wrong Way Signs” by Arizona Department of Transportation is licensed under CC BY-NC-ND 2.0

    If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Amazon Business American Express Card

    You already shop on Amazon. Why not save $100?

    If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

    Best of all: No fee!

    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 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order.