Thread by @gregisenberg

I made some mistakes that cost me $75 million

Confession: I’ve passed on investing in 7 companies that are now worth billions

I let them slip away…

7 painful lessons learned (so you don’t have to make them):

The mistake: If I can’t go for a beer with the founder, I don’t want to invest in the startup

The truth: there are plenty of great businesses led by founders I wouldn’t want to spend my Saturday nights with

Point: you don't need to become BFFs with your portfolio

The mistake: “Invest in founders with pedigree”

The truth: experience + attitude is way more powerful than pedigree

I don’t care that you graduated from Harvard or worked at Facebook

Point: I care that you have the life experience and attitude that equips you to outperform

The mistake: “Platform dependency kills startups”

The truth: being dependent on someone else can lift you up or punch you in the face

Ex: I passed on Sonder ($2.2B) on a $4m valuation because it was built on top of Airbnb 😅

Key: Platforms can lift you up

The mistake: “The opportunity isn’t big enough”

The truth: founders often MAKE the opportunity big enough

Your initial market, isn’t your final market

Example: Uber began as a black car service for people in SF

“Small market”

Point: startups are a game of: Crawl. Walk. Run

The mistake: “the valuation is too high”

The truth: well, maybe there is a reason it’s high!!

Point: don’t let valuation get in the way of backing a great team/product

The mistake: The minimum check size is above my means

The truth: You don’t ask, you don’t get

I should have asked to be squeezed in

Point: next time ask what is the smallest check they'd be willing to consider is

Would they take $1000, $5000 etc?

The mistake: I’m a founder, I don’t have time/energy to invest in another business

The truth: You can be a great CEO/Founder and invest in other startups. Not mutually exclusive

Founders like @ScottBelsky have led companies while investing in companies like Pinterest to Uber

Thanks for listening to me

It isn’t easy to talk about open failures, but I’ll be doing more of it on Twitter

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2012 Greg: Not an amazing investor

2021 Greg: Learned from my mistakes

If you believe in me and believe community-based companies are the future (I do!), I've opened up 5 spots to invest alongside me:

angel.co/v/l/FaB5v

These spots will be filled (must be accredited)

I'm going to be writing more in-depth posts via my newsletter

Topics include:

- How to build community-based products
- Deep dives into interesting startups
- How to unbundle large platforms like Amazon to Reddit

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Summary:

You’re going to make some mistakes investing

My top mistakes:

- Passing on “inexperienced” founders
- Passing when valuation was “too high”
- Passing because I felt too busy running a startup
- Passing because I thought the market was “too small”