Disrupt The Status Quo Of Startups
On Tuesday I gave you the four things I look for in a startup company before I consider investing. I hope you enjoyed my insights on one of the greatest foundations of America. That is the entrepreneurial spirit!
In the next few weeks I’ll dive deeper into each of those core concepts, but before we do that I’d like to give you my overall investment philosophy…
It has one goal in mind — to grow a successful business.
Now, it’s no cakewalk and there will be ups and downs. Trust me, I’ve seen the whoas and woes of the business. I’ve learned a lot and I’m honored to share it with you…
As an investor, I generally try to stick within the industries and the types of deals that have worked for me in the past.
The biggest challenge that I’ve had is when I get into areas that I’m not skilled in or don’t have experience in. It seems like that’s where I tend to do very poorly or not as well.
I started 30 years ago in the world of As Seen On TV in the infomercial space. Inventors would come to me and they’d have an idea. They’d say,
“Hey, I need money to finish my idea so I can go sell it.”
In the early days, I didn’t have all the capital they would need, so we would either go raise money or bootstrap it to get products to the marketplace.
I would go on to make my profits selling products on television — now I had the money to invest.
I found that I could invest in somebody’s product, and a product could do tens of millions of dollars. It could do a hundred million dollars and bring back, for a $200,000 investment, $50 million in sales with a $5 million profit.
You get spoiled as an investor when you put up $200,000 and you get back $5 million….
If every deal were like that, obviously, those would be the only investments you’d have to make. The risk is you put up $200,000 and you can lose it all on three out of four deals.
It’s a much riskier kind of an investment.
You’ve got to be able to write four $200,000 checks, have three of them gone completely and have that fourth bring you back $5 million.
I’ve gotten killed in the options side of the business. I’ve gotten killed in minerals and futures and oil has been devastating for me over the years.
But experiences like that have made me better. You’ve got to know when to hold them, know when to fold them in some of those deals.
There are two sides of my business:
- The total risk side of taking something from the beginning and launching it.
- Jumping in after it’s already tested successfully and provided roll-out capital.
That’s less risky, because now you’re already jumping in when something’s already been made, already been tested, already successful.
Now the startups need money for medium. They need money for inventory. You don’t get as high a return, but it’s a lot less risky.
Bottom Line: Go for a more bankable type of deal.
That’s the other side of the business that I’m involved in. Same industry, just a little less risky. Still, higher returns than you can get in many other places in the marketplace.
It’s all about taking a business to the next level. I want to hit that elevation — hit a peak and go beyond it.
I’ve been in this industry for over 30 years, and it took me a while to get a little bit of capital, and during that time I’ve taken risks and learned from mistakes, it’s all made me a better entrepreneur and a smarter investor.
I hope it does the same for you…
Over the past few weeks I’ve been reading your feedback and questions. Keep them coming! You can email me at AskKevin@SevenFigurePublishing.com.
My team and I have been overwhelmed with your support with this letter. With that said I want to reiterate my commitment to you.
For too long the imbalance between institutional investors with deep pockets and everyday investors with limited funds has pooled the biggest investment opportunities to one group of wealthy venture capitalists.
We’re on a mission to change the way people invest forever — that’s our modern push.
And as always, the story continues…
I’ll talk to you next week!
Sent from a shark,