PS - Jacques, we should sync up sometime, I'll be doing some tech diligence in the EU/UK market in the future and I understand you're based there. If I recall correctly, we've gone back and forth about the topic of diligence on here before.
As a simple example in a different field, 'patio11 has taken standard practices in the online marketing world and exposed them to the engineer set with a fairly decent level of success and exposure. Very little of what he has said is original or novel... to those who hang out in marketing circles. That said, he has been able to open the eyes of many engineers to the realities of marketing via using appropriate communication style and sharing it in appropriate forums (in the broad sense of the term).
Also, honestly, I've met many "marketers" who don't know those things, or don't know how to actually implement them, or why.
If it came across that I was understating the skills of 'patio11, then I sincerely apologize. He's talented at what he does, and his combined skill set is rare. I will also add that some of original contributions are seminal ("Falsehoods Programmers Believe about Names" comes to mind).
As far as the state of today's median online marketer, I agree with you that the level is not particularly high.
Even if you're running a normal, non-VC tech company, understanding the motivations of VCs is very useful. The behaviour of other companies makes much more sense in light of this.
I wished there was an article on "How Hard is it to generate a 10X return" for normal, Average-Joe investments (ie stocks, bonds, real estate), and how a 10X return is actually at most 6X return, because you need to take into account taxes, costs, and inflation.
then an sp500 index fund is probably best. not the 10x return you are looking for, otherwise you have to be a lot more speculative
The exact index funds to hold is a constant matter of debate (including whether to hold international). Doesn't matter as much as having that equity exposure and keeping the fund fees low.
Lots of resources out there to do it yourself (https://www.bogleheads.org/wiki/Three-fund_portfolio) or you could use Betterment/Wealthfront/Personal Capital for extra fees.
By equities I mean low cost equity ETFs (or index funds) that invest in broad indexes. I do not mean a portfolio of 10 to 30 stocks hand-picked by you or any fund manager. The hand-picked portfolio could be down 100% in 20 years, or in 1 year.
I have LQD, JNK, and BNDX.
https://investor.vanguard.com/mutual-funds/target-retirement...
If you really wanted to manage the risk yourself and rebalance it periodically you could do that too and indulge in more risky sorts of funds but that's up to your inclination/time.
What's your _timescale_ for generating 10X returns? That's where it gets tricky.
Now, 10X in a short timeframe, that is a different story. Being rich when you are young is mostly about the right idea, at the right time, in the right place. Being rich when you are old is simply about organizational skills.
If you're anywhere in the startup ecosystem, it's helpful to know venture mechanics. If you're a VC it's essential since yours and your LPs paycheck are on the line. However if you a founder, a would-be founder, maybe even a senior engineer, ..., it's necessary to understand where your VC is coming from and what the term sheet means.
This is necessary before you get a term sheet.
There's a lot of information out there now that didn't used to be out there. You can find out that Shaquille O'Neal, Tiger Woods, Arnold Schwarzenegger and Henry Kissinger were in on the A round for Google. I don't know if that's useful information. But it's out there.
https://www.crunchbase.com/search/principal.investors/field/...
There are a lot more startups and a lot more investors, VCs and angels. Maybe 30 years ago, this was backroom stuff between founders, investors and their lawyers. It isn't anymore.
Maybe it’s because I’m looking for problems, or wondering how the status quo came to be.
For example, why does it cost $30 for a wire transfer? And why is it only processed on business days. That led to me wonder how banking and ACHs work.
It's a small part of it, but understanding what VCs are looking for and their business model is important if you ever want to get funded. It will allow you to foresee certain decisions, and give you more options in response to them.
One thing engineers and scientists suffer from in spades is the Illusion of Control. Venture Capitalists are strange creatures that can make you rich or lay you off seemingly on a whim. Trying to manage them makes us feel like we have some say in the outcome.
Thing is, VCs are making money off of information asymmetry, just like most of us. As soon as you think you've figured out one thing they just move the goal posts and you're in the dark again.
Letting some of us win the lottery once in a while is how they keep the rest of us docile. I'm pretty done with it. I already leaned this way anyway, but if I work for a startup again it'll only be because I believe in what they're doing, not because there will be a payday. The execs will see almost all of the upside of you moving heaven and earth. What trickles down to you isn't that much.
Specifically, I think that there are many people who make companies that are better off being bootstrapped, but they go the VC route because that's the sexy thing that gets reported on and talked about. They don't understand why they get no interest from good VCs when they have good product-market fit and are making money. It's usually a market that's too small or a trajectory that's too flat, but these ideas do not really resonate with most people who don't spend a lot of time around financial people/ideas.
Hearing VC explained in different ways and in different voices is a healthy thing. If anything, it will help people either correctly self-select out of the VC funding process or create a company that has the potential to work at VC scale.
I would spend more time writing about this topic using the questions and wording that you hear from people who are curious about the VC world but clearly don't know the answers. This will probably mean talking in a way that is more engineer/maker-oriented than financier-oriented.
But unless you can bootstrap it, you need to know the motivations of your lenders and/or investors. Their interests are different from (and rarely aligned well with) yours, much less those of your customers.