Capital Thinking • Issue #92 • View online

If you aren’t asked this question, or don’t ask this question I think it is an important one when you are deciding whether to invest in a company or not. It’s sort of loaded from the investor perspective.

Never forget, no matter what you do you are human.

There are costs and opportunity costs associated with every decision you make and every action you take. They are different for everyone.

-Jeff Carter

What Company Do You Want To Build?

Jeff Carter | Points and Figures:

I know an angel investor in Ohio that would walk away from the deal if the person answering said, “A billion dollar company”. They like to play for small exits. It suits their style and the way they view the ecosystem they play in.

Of course, typical VCs would want to hear, “A billion dollar company”. Everyone is conditioned to say that.

But, that statement is too loaded because few people know what it’s like to really build a billion dollar company. Let’s just say you don’t typically add a billion to your valuation in two weeks like they do in the scooter rental market.

I think the question goes deeper than that too. It can be intensely personal if asked a different way. It goes to your psyche and soul."

Why Are You Doing What You're Doing?

"Assume you are an entrepreneur and you own a large chunk of the company, Or assume you are an employee and you own a nice piece of equity. The “billion dollar company” answer might not be true to your personality or ethos.

What if you were offered $10MM, $20MM, $30MM for it? You could walk away with a sum of money that would give you a nice life for the rest of your life. Would you sell then?

It pays to ask yourself this question. It starts to help you separate why you are doing what you are doing.

If you are in it strictly for the money, lower valuations and walking away with some money might be really appealing. It also appeals to your internal risk/reward calculations in a lot of cases.

However, if you are on a mission, or have such a passion about what you are doing the money is a byproduct of it. I love the quote by Marc Cuban, “Follow your effort”. You will become passionate about things you put effort into.

It doesn’t mean you have to have the desire to buy a Ferrari and a big house. This is not a question about achieving material belongings. It’s about figuring out how you belong to the mission you are about to undertake.

Think about this question and answer it honestly. As the business grows, the answer might change but it helps you when you start to at least consider it because it opens up other doors inside yourself so mentally/emotionally you are in sync with your actions."

Why I Do What I Do

"The other day someone asked me why I do what I do. I told them I liked dealing with people, and my number one focus everyday when I woke up in the morning was working for the companies we were lucky to be invested in.

I loved working for our LPs to give them every opportunity to make money. What that translates into is that I really like helping people and isn’t it great that I can be in a business where all I do is help people out. It’s what I did in my trading career and it’s nice that it has carried through."

*This piece by Jeff Carter first appeared in Points and Figures, June 15, 2018

*Feature photo credit: Yeshi Kangrang on Unsplash