Tweet

Chamath Palihapitiya

10 Nov, 10 tweets, 2 min read

Today, we are launching a new effort, SC Emerging Managers, for people who want to become investors.

We want smart learners especially from diverse, nontraditional backgrounds.

We will give you money, training and a community around you to become successful.

Learn more...

One of the hardest problems for new investors is getting started – how to establish a capital base without a track record, how to build out all the expensive infrastructure that’s required at scale, and how to pay the rent when you aren’t initially drawing fees.

Beyond the practical challenges, it’s even more difficult doing this on your own. Having a sounding board for new ideas, support in down markets, and mastering the mental side of investing are all crucial – and dramatically more difficult by yourself.

Social Capital is relentlessly bullish on talented people willing to back themselves, which is why we are building a new kind of platform to identify and stake the best emerging investors, wherever they are.

We are seeking new investors, of all backgrounds, who believe they can develop differentiated strategies to generate outsized returns on an initial capital base of millions of dollars, which can scale much larger over time to tens and hundreds of millions.

We will initially focus on US Public Equities but over time will expand our Emerging Managers program to include:

1. Worldwide Public Equities
2. Crypto
3. Venture Capital / Private Equity
4. Trading Cards
5. Art
6. Lending/Debt
7. Other (Shoes, Wine, Real Estate)

If selected you will come work with me and my partners, as part of Social Capital for a minimum of three years, and join a community of other investors to collaborate, share knowledge and expertise, help one another, and grow together.

If this is you, discuss your background, strategy, and approach to generating outsized returns trading US equities (fundamental, momentum, quant etc) in three pages or less by December 15th to em@socialcapital.com

A successful application could touch on best ideas, example trades or theses, backtests of ideas, thoughts on portfolio construction and risk management, or analysis you’ve done publicly or on social media, though no specific template is necessary or required. Pitch us.

Our standard deal for managers and the formal announcement letter are attached. We will pick ten managers to be among the first cohort and begin trading in Q1 2021. Good luck!

• • •

Missing some Tweet in this thread? You can try to force a refresh

This Thread may be Removed Anytime!

Twitter may remove this content at anytime! Save it as PDF for later use!

More from @chamath

Chamath Palihapitiya

@chamath

4 Nov

Think about what we’ve just witnessed:

1. Four years of chaos, incompetence and bickering.

2. A pathetically managed pandemic that politicized everything.

3. Conspiracy theories that brought every cook out of the woodwork.

4. An economy in tatters.

But despite this chaos and vacuum in leadership, we have a stalemated election that may likely tip Biden but, barely, and not for a few days.

Why is Trump so hard to defeat?

How could the Democrats screw this up especially after 2016?

Things I’m currently thinking about:

1. A plurality of Americans just gave coastal elites a big “Fuck You” when you see how many Hispanics, Blacks, Jewish voters went Trump all across the US.

2. The Democratic Party needs retooling.

3. How do we fix America?

Read 4 tweets

Chamath Palihapitiya

@chamath

25 Oct

In investing, so many people seem to have “the solution” but they are incapable of profiting from it themselves so they convince you to pay them fees and carried interest to do it with your money.

This is the principal/agent conflict with most funds.

A few questions you should always ask:

1) How much of the investment/fund is your own capital?

2) How much above the minimum in your LP Agreement is your capital commitment?

3) Over the past 5, 10 years, what percentage of your comp were fees vs carried interest?

Whether you’re an entrepreneur raising money from a GP or a prospective LP investing in a fund (of any kind), the funds/GPs with the most skin in the game will act like a principal and be aligned with you and will seek to make money only when you do.

Read 4 tweets

Chamath Palihapitiya

@chamath

7 Oct

SPAC Dynamics: An interesting turn in SPACs are those SPACs being raised by Venture Funds, Growth Funds or Crossover funds in the hopes of working with an existing portfolio company.

There are a lot of interesting turns that may play out here:

In some private company boards, politics can be intense with "Alpha" Directors and "Beta" Directors.

Also is the issue that the earliest investors are oftentimes the largest owners versus later stage investors who usually own less but have invested a lot more capital

Success of the startup typically amplifies the dynamics of both of these trends.

Now consider when one of the Directors approaches the CEO and the rest of the board with a SPAC:

1. Is it the Alpha Director or one of the other Beta Directors? How will that drive reactions?

Read 5 tweets

Chamath Palihapitiya

@chamath

1 Oct

Running a company in 2020 is hard. It's no longer just about employees and shareholders. It's now also about stakeholders of which there are many:

Regulators, employees, partners, existing users

But the most important, imo, are mass market potential new users (MMPNU).

MMPNUs are critical because they are the only way of achieving a massive outcome. You can build a very good/big company without MMPNUs, but not necessarily world-changing.

If you want to maximize MMPNU demand, you need to understand their psychology.

MMPNUs are not picking features and functionality - that's what early adopters do.

MMPNUs are initially triggered by virality but their choices are cemented by a sensation that the product is aligned with who they are.

When it is, they adopt. When it's not, they churn.

Read 5 tweets

Chamath Palihapitiya

@chamath

23 Sep

Investing 101: Don’t confuse slugging percentage with batting average.

The former is being the cool kid in high school - you’re a rare thing and everyone wants to know the secret.

The latter is like going to the prom with your mom. Everyone talks about it, but not kindly.

Investing is all about dollars in —> dollars out or the multiple of invested capital (MOIC).

How many good companies you’ve invested in interests no one who knows anything.

How much did you make? What was your entry point? Did you size up or did you shit your pants?

It’s easy to focus on batting average and miss the obvious:

“I didn’t buy $TSLA at $300 so I’ll pass at $1000.”

“$AMZN at $500? Crazy! See you at $200.”

Read 6 tweets

Chamath Palihapitiya

@chamath

21 Sep

Investing 101: Risk management is poorly understood and even more poorly applied.

Here’s a simple framework I use to manage risk.

Imagine a barbell - weights at either end with a thin bar in the middle. In my opinion, risk is best managed in this way.

For me, early stage risk is at one end of the barbell and liquid, public market risk is at the other. In the middle are growth rounds, converts, PIPEs etc. ie anything that isn’t the other two.

For every $100, I divide it into a 45/10/45 allocation in the barbell.

Now here is the hard part...in the early stage bucket, I divide the $45 into 10 years because that’s how long it takes for an early stage deal to get liquid. I also need to hold back 1/3 for reserves (investing your pro rata in future rounds).

Read 8 tweets

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!