#StartupGrind 2019 was a coming out party for many of the ideas behind my investment hypothesis, Grays Sports Almanac for Venture Capital.
Here are the top 17 tweets that illustrate points made in the book:
A High-Growth Company is defined as achieving $2M+ in revenue with 20% annualized growth over a 3-year period. This definition comes from page 10 of the 2017 Kauffman Index of Growth Entrepreneurship.
The data table below shows the odds of starting a High-Growth Company in each major city in America. This data serves as a baseline for the fund I’m modeling based on the book, Grays Sports Almanac for Venture Capital. I am sharing my research notes here so that you can incorporate this data into your angel investing or venture capital models.
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The above graph shows the top 20 reasons why startups fail from CB Insights. I marked up the graph with green checkboxes to show which risk factors customer-funding (also called bootstrapping) can help you manage. Orange checkboxes denote risk factors that Founder Friendly Standard can help manage.
Risk Factor: No market need
If you’re bootstrapping, you’ll find out pretty quickly if there is no market need. Unlike your angel and VC-funded cohorts, you’ll be able to make fast pivots while they’re lining up their organizations’ change management strategies.
Risk Factor: Ran out of cash
If you are bootstrapping, you are financing innovation with organic cash flows. This is a key growth driver in the Credit Suisse Family 1000 research. If your company is controlled by its founders, you’re more likely to pace yourself, spending the money like it’s your own vs. your VC-funded competitors who are quick to spend (principal–agent theory).
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Kindle Book: Grays Sports Almanac for Venture Capital (2018)
Audio Book: Grays Sports Almanac for Venture Capital (2018)
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According to my personal coach, Joe Cohen, personal values are a powerful tool for evaluating what’s important.
Here is a list of eight of my personal values. Since what we value influences our behavior, think of this as a “user guide” to Eisaiah.
Which of these values do we share? I want to hear from you on Twitter! Tag me @eisaiah_e.
Invest long-term. To me, this means committing to productivity growth.
Founder Friendly Standard v1.0 has been updated today. The new version of the standard is 1.1. Here is a description of the change:
The change has been applied to:
Grays Sports Almanac for Venture Capital proposes a new risk management strategy for venture capital. In this investment hypothesis, I outline why a venture fund might beat the odds by purchasing 2,208 to 4,416 warrants on startups. Startups would operate under a governance framework called the Founder Friendly Standard, which gives entrepreneurs control of their companies. In exchange, the venture fund would have the option to exercise warrants for 15 years—purchasing discounted equity only in the startups that become successful.
I own a single share in a handful of public companies. Each share gets me into the annual shareholder meeting where I can ask questions to Fortune 500 CFOs, CEOs, and board members. 2018 is my second year going to the meetings, and the strategy is effective at putting me in a room of 15 difficult-to-access people for 30 minutes. Anyone can follow this strategy. If you’re interested in replicating it, check out my portfolio here.
At last week’s shareholder meeting for a major consumer products company, I ran into a former CEO that once worked with a colleague of mine. This CEO was highly focused on the customer and led a Fortune 500 company through a significant growth period—all the way to an acquisition. Now, he’s on the board of several Fortune 500 companies. We’ll call him Mike.
My colleague and I planned a question for Mike about how to keep a company focused on the customer as you transition from an operator (CEO) to an advisor (board member).
I imagine you landed on this page because you read the Ray Dalio interview in the Tony Robbins book, Money: Master the Game, and you’re trying to remember what percentage (%) of stocks, treasury bonds, gold, and commodities are in the All Weather Portfolio – adapted for individual investors.
When I was in my 20s, I met Gk Parish-Philp, a co-founder of DivX. I asked him how to get investors for my startup. He said, “You don’t want investors. They’ll take too much control.”
“That can’t happen to me,” I thought.