We've ALL had deals go super wrong.

1 Deal did 500% return in 3 years, and this early 1 also went to ZERO

A THREAD about a deal of mine and the dark side of investing in SMB business...

Invested in a very small CPG company to take a large minority position.
- $50k invested
-$50k in debt
- $$$$$ in time & stress

This was a TON of $ for me.
(Dang that's still a lot of $, I hate losing $20 bucks)
My Pain in 60 Seconds:
- the company went to $0.
- lost all the $
- ended up ruining my friendship w/ the founder
- wasted a year trying to fix it
- now can’t even look at this type of food 🤢
What I learned?
#1 Trust (kinda) but verify

The founder was a friend
- She said they were doing $1mm ARR
- They really did $1mm lifetime rev over 3 years😩

My fault. - I just took her word. Dumb.
#2 Long term things, long term people
- Like @naval says, this is the goal
- a red flag, humans who don't have long term friends, clients, partners

Short term people = high likelihood of long term f*ckery
#3 No celeb biz's; Sory Kim K
- just my preference BUT
- I want my operators focused on profits not profile clicks

If I see someone seeking fame, I'm out.
Make the $, then chase the crowd.
#4 Like the mob says, it's not personal it's biznass

I always regret when I forget to look at the #'s and focus on narrative

A $100k lesson for a kid who didn't have it

Means - not going to forget it

1. Trust (kinda) but verify
2. Long term things, long term people
3. No celeb biz's; Sory Kim K
4. It's not personal it's biznass.

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More from @Codie_Sanchez

16 Jun
PE/VC Terms 4 DUMMIES, a 🧵

When I started in finance, I had to google what a mutual fund was.
Not my 💡moment.

How bout I save you the embarrassment of doing what I did & asking if I had to "carry" something when they said I got carry... 🤦‍♀️
Top terms to know (so u sound supa smart):

#1 Equity kicker
- Aka a sweetener
- An option to buy equity...
- At a discounted price...
- Bc u invested in a company today...
- Like when they throw in hot dog when u buy a car (same same really)
#2 Full ratchet 🔧
- If company u invest in goes down in value...
- 🔧 for preferred shares protects u from...
- Getting diluted (aka owning less of company)
Read 12 tweets
15 Jun
How fast did Venezuelan $ become worthless? (PS I was there).

May 2015 bolívar lost 25% value in week; $300 = $1
May 14, $400 = $1
May 21, $500 = $1
July 3, $600 = $1
Feb 2016 $1k = $1
Nov 9, $2k = $1
Nov 21, $3k
Feb 2018 lost 99.6%, 25k = $1

Today $248k = $1
In economics, things take longer than you think, then happen faster than you think.

Don't be left holding the last Bolivar. Asset up.
This was a tragedy.
Started by incompetent politicians
Finished by idealistic citizens

I saw it happen in Venezuela & in Argentina.
Read 4 tweets
13 Jun
5 things turned a newsletter I did on the side for 10 hours a week, into a 7 figure business with a bunch of businesses shooting off of it.
#1 Give me your money first. Do a founders offering
Before you spend time on creating any business, test the market. I ALWAYS test the market

I don’t care for opinions. I care for your dollars. we start with a pre-sale before we even have the product.
#2 Choose your price, then add a zero to it
I ALWAYS underprice. It’s a personal fault. Don't be like me.

I found the more we raised the price, the more we sold, and THE FEWER CHARGEBACKS and HEADACHE we had

Don’t be afraid to price higher!
Read 9 tweets
9 Jun
How do you oversee multiple businesses?
How do you make sure you're growing?
How do you focus on the right things?

I get asked these questions CONSTANTLY and

SCORECARDS: A thread on how I oversee 15+ businesse's at a time, 1 snapshot at a time:
First up: There are probably MUCH better and fancier ways than all of these...

Keep it simple, stupid. There is no exact right way I can show you.

Goal is --> what gets measured gets managed
So you wanna run a media biz?
Scorecard that got us our 1st 25k followers at Contrarian Thinking.

Grow Baby Grow - Marketing spreadsheet
Read 6 tweets
7 Jun

1st Why?
Out of a job for a year is NORMAL
- 60% of American adults live with chronic illness
- 42% have more than one
- 1/4 Americans will have a disability (That’s 61 MILLION PEOPLE)
Even for us young hustlers:

- 1/4+ of today's 20 year olds can expect to be out of work for at least a year bc of a disabling condition before they reach retirement
And yet we SUCK at saving:

65% of households lack a mere six weeks of take-home pay on hand.

37% of respondents unable to cover more than a month of normal spending.
Read 6 tweets
6 Jun
Can't believe I'm saying this...

I'm actually concerned we may default on our national debt.

Anytime a country has gone to 130% det / GDP it has been a metaphorical point of no return.

The country has defaulted, a 🧵based on an industry report that got me humming.
Story time: Over the past 200 years

98% of nations that hit 130% defaulted on their debt (usually through inflation.)

Japan is the only one in 200 years that hasn’t defaulted BUT

Japan is rare...
Japan is a nation:
- in budget surplus (i.e. they run a net profitable biz)
- internally funded (i.e. they buy their own goods)
- with a Net Int’l Investment Position (NIIP) of +70% of GDP (aka they save a lot, and can ask for their $ back from other countries i.e. US.)
Read 5 tweets

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