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Venture capital?
Old 01-29-2016, 08:28 AM   #1
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Venture capital?

I know many here are like me and run a small business. Have any of you transitioned to small venture capital as a hobby or to stay busy in retirement?


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Old 03-10-2016, 11:03 AM   #2
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Bump, just hoping .


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Old 03-10-2016, 11:36 AM   #3
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Wouldn't that be like w*rk.

You would need quite a few millions that you could lose, need to check out carefully the concepts, principals involved, and then make many investments knowing 5/10 will fail, 4/10 will barely survive, and 1/10 will blossom.

But if you miss that 1/10 you kiss off pretty much everything.
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Old 03-10-2016, 11:43 AM   #4
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Long before I would ever have enough to invest big money into someone business idea, I would have enough to keep me happy for the rest of my life.

Maybe a peer-to-peer situation might be OK, but even that is too risky for me.
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Old 03-11-2016, 12:17 AM   #5
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I am a semi-actively angel investor but I keep each investment to a manageable level, generally 10-25k each. I've made 6 investments to date and have already reaped one very sizable exit that returned several multiples of everything I've invested in startups to date. All the other companies are still in business and doing well.

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Old 03-11-2016, 09:35 AM   #6
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I don't have the risk tolerance to become a VC, nor do I have ton's of other people's money to play with! ha

With that said ... I started dabbling in P2P investing last year. I invest at Upstart, which is a bit different than lending club, prosper, etc... For the most part, they tend to only give out loans to college grads, not to mention some other noticeable differences.

I originally invested $10k in April of 2015. That acct now sits at about $10,550 or so. I average about 6.5% return.

I enjoy it ... I know what its like to have tons of unconsolidated debt. I'd say, 75% of my loans (which are at $100/piece) are with college grads that want to consolidate Credit Cards. I've had very few delinquencies and/or charge offs!

For now, I don't plan to invest any more, but that's not to say I won't. I want to give it another full year before I put any more in!
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Old 03-11-2016, 09:57 AM   #7
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I am a semi-actively angel investor but I keep each investment to a manageable level, generally 10-25k each...

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+1 to this.

Have done some similar deals with simple rules

(1) Max $50k
(2) A business I can (a) understand and (b) visit in person w min travel costs.

So far, it has worked out OK, slightly better than break-even.

That said, I would not want to do multi MM deals of this type. For that same return, I would sooner get my licenses and trade other people's $ for 1% carry and 20% of the upside.
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Old 03-13-2016, 11:25 PM   #8
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+1 to this.

Have done some similar deals with simple rules

(1) Max $50k
(2) A business I can (a) understand and (b) visit in person w min travel costs.

So far, it has worked out OK, slightly better than break-even.

That said, I would not want to do multi MM deals of this type. For that same return, I would sooner get my licenses and trade other people's $ for 1% carry and 20% of the upside.
I've considered launching a fund--have a few friends that have done so but chasing deals all over the country to put the investor capital to work isn't my idea of early semi-retirement.

Instead, I can invest on my own schedule as an angel.

Are you doing anything on Angellist or other platforms? I haven't gone there yet.

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Old 03-14-2016, 09:23 AM   #9
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My best friend is a Wharton MBA in finance, and he's got 35 years in the venture capital business.

It's something you have to go really big in, or not go into at all.

Venture capitalists' management fees are relatively low, and their big payoff is when they take a company, make it a success and cash out by private sell or stock IPO. It takes a large portfolio to live in the early years.
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Old 03-14-2016, 09:54 AM   #10
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Yes, one needs a 20MM fund at a minimum just to break even on a day to day basis. Many VC's charge 2% each year, so that is only 400k to pay for the substantial costs of operating the fund. Then you are waiting for the 20% upside from any exits but those could take 5+ years, if they ever materialize.

Many people right now are launching funds with 2-5MM and then after they've built up a book of investors and have some track record of making sound investments choices (even if no exits have taken place), launch a 2nd fund in the 20MM+ range.
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Old 03-14-2016, 09:59 AM   #11
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DH has $15k in a young friend's small business--he expects never to see it again but he has had a lot of fun the past three or so years on the sidelines, another retirement activity for him.
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Old 03-14-2016, 12:22 PM   #12
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I'm trying to figure out how to get a foot in the door to VC locally here in raleigh durham. Finance/VC, I am hoping, will be my next career as I downshift from IT consulting. Just looking to have some fun analyzing companies.


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Old 03-14-2016, 12:31 PM   #13
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We lent $3500 to a guy who had a controller for bouncy cars - the ones that leap up and down like excited dromedarys http://i.imgur.com/mhVP5Of.gifv

Several years later we were astounded to get our money back from the girlfriend of said guy.

We do much better loaning to flippers and home builders who create value we can relate to.
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Old 03-14-2016, 09:11 PM   #14
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I managed to get an interview for an unpaid internship at a private equity fund wednesday.


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Old 03-14-2016, 10:58 PM   #15
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I managed to get an interview for an unpaid internship at a private equity fund wednesday.


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Cool! Let us know how it goes.

How old are you, if you don't mind? Do you gave any finance education/experience?

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Old 03-15-2016, 08:50 AM   #16
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Cool! Let us know how it goes.

How old are you, if you don't mind? Do you gave any finance education/experience?

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37, and I do mind being that old, parts are wearing out already!

I have been, the last few years, attending undergrad classes on finance and economics at Harvard's night school. But other than that, no finance experience outside personal "wealth". Finishing up an MBA primer at HBS this spring.


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Old 03-15-2016, 11:25 AM   #17
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Most VCs invest in businesses they can watch closely. As someone else has mentioned you need to know the business, be able to assess its viability, and be within a 2-hour flight. Thus Silicon Valley VCs invest up and down the west coast, east to maybe CO. The exception would be game-changer projects in Israel.

To invest in a firm at the venture level you not only need to assess the viability of the business plan you must investigate the principal's financial history and legal exposure. You, in effect, are going into business with them.
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Old 03-20-2016, 09:49 AM   #18
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2nd interview tomorrow morning. Basically i think i have the "job" as long as we can work out the details of what he needs out of me and what i can commit to offer him time-wise.






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Old 03-20-2016, 07:21 PM   #19
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Good luck!

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Old 03-27-2016, 08:45 AM   #20
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Got the "job". I hope it will be as interesting as I hope. Was nervous for an interview for the first time in 15 years!


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