Something random about me: I completed high school calculus in 5th grade.

I don’t talk about this because it made me feel weird or like bragging.

I talk about it now because the upside of investing into smart kids massively helps society.

It follows a power law:
Human progress is not driven equally. Most people do their part in society but don’t really drive it forward.

Elon Musk has driven *let’s say* 10 million times the societal progress of the average human.

I’m no Elon Musk, but I have created progress/benefit of my own.
A gifted child will consume and integrate information 10-100x faster than their classmates. This will compound.

So the best outcome for society is not to make everyone equal.

It is to throw disproportionate support and resources behind those rare kids who have these minds.
I was reading @garrytan ‘s post about AP classes. Couldn’t agree more.

I came from no money, no networks, a no name rural public school.

All I wanted was a challenge and a shot. Let’s do everything we can to find those kids today and give them that support and that shot.

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More from @XavierHelgesen

Feb 1
Here it is! 2021 shareholder letter for Enduring Ventures Inc.

We are a long term holding company dedicated to building abundance for our employees and shareholders through ownership in diversified, cash-flowing businesses.

Full letter in the 🧵

Here's our progress to date: Image
2/ Most key of all was strict price discipline and creative deal structuring

/ We have a very differentiated model in the "business buying" business.

/ Private equity's weird incentives are problems for their investors and for those who sell to them. Image
3/ A long-term holding company's greatest advantage is its internal capital market.

/ Our arbitrage is the greatest in situations too operationally complex, small or long-term minded for private equity.

/ First family photo of our org structure on the Internet! Image
Read 16 tweets
Jan 31
SBA loans are the cheat code to American capitalism.

They allow anyone to transform overnight from an employee to an owner.

I am not just saying this. I used SBA to buy $2 million of cash flow for $300,000 down as Enduring Ventures’ second major deal.

Here’s how it worked:
First, an overview of SBA:

You can borrow up to $5 million for a business or $10 million if it is real estate heavy.

You can go even larger with some banks (I know one) that will lend “peri passu”.

That said, if you are not an experienced business manager and not wealthy…
It is far better to start with a $1-2 million acquisition.

This is big enough to set you for life, but small enough that the bank will have much more comfort.

If you buy well, you will have $300-500k in cash flow before debt service, even if you don’t grow.
Read 13 tweets
Jan 20
Employees get screwed a lot in the startup world.

Company is not funded as promised, they never get equity, etc.

I’m here to tell you it is your fault if this happens.

You need to do diligence.

Here are 6 things I would require before signing (that almost nobody does):
1. Insist on the stock grant being papered:

1. At time of hire.

2. With an addendum by the company stating the current fully diluted share count.

3. With double trigger vesting. If the company is bought and I’m fired, I vest.
2. Ask to see financials.

If I can’t see them - why can’t I? What are you trying to hide?

If they refuse to share, that is a huge 🚩

If it was for a lower level role, I understand. But then I want to meet the CFO and ask what the burn rate is and how much cash we have.
Read 8 tweets
Dec 5, 2021
A short primer to understand inflation (and how to protect your savings from being eaten by it):

“Inflation is taxation without legislation” - Milton Friedman
Inflation is ultimately really simple.

You have a fraction:

(All the actual goods and services ) ———————————————
(the number of $$$ in circulation)

If the top goes up faster, we all get richer. (Real growth)

If the bottom goes up faster, we all get poorer. (Inflation)
The government can print dollars for free.

When it runs a large deficit, it has a tendency to print a lot of them.

Every new dollar printed means every existing one is worth a little less.

That is the invisible tax.
Read 14 tweets
Nov 12, 2021
My CEO hiring thread was well received, so here are four rules for hiring a CFO who doesn’t suck:

(there are two completely different types of CFO and many entrepreneurs hire the wrong one)

🧵
Two kinds of CFO:

Bankers - Love raising money. Great financial storytellers. Used to work at Goldman Sachs.

Auditors - Love making budgets and getting audits done successfully. Used to work at KPMG.
Hire a Banker if:

1. You don’t like raising money or aren’t good at it.
2. You don’t understand capital markets and don’t care to learn.
3. You are going BIG (more than $30 million raised).

They get bored with accounting and they will need to hire that under them.
Read 11 tweets
Nov 4, 2021
Four rules for hiring a CEO who doesn’t suck:

🧵
Hiring a CEO is an unusual skill.

Successful entrepreneurs usually do it poorly due to overconfidence and inexperience. (Me included)

Warren Buffett’s greatest skill was not investing - it was CEO selection and compensation. It was the one thing he focused the most on.
I’ve hired 12 CEOs in my life. It is my most important job at Enduring Ventures.

I’ve noticed some patterns.

Great CEOs are:
1. Domain experts.
2. Masters of their budget.
3. Macro & Micro Managers.
4. Generously greedy.

Let’s go through each.
Read 9 tweets

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