This week’s highlights: The Halfway Point, Sober Thinking About Venture Capital, A Strange Pillar in the Desert
Issue 403
by David Wells – Nashville TN
Happy Wednesday –
As is customary, we always distribute an abbreviated edition the week of Thanksgiving. Best wishes for your week and weekend ahead.
Original Content This Week –
- Avoid 1 Fight These Holidays? – How Couples Can Talk About Wealth Money conversations are loaded with the good and bad of each partner. Conflict often ensues when they have not dealt with their own personal issues. Many “we” problems are actually “I” problems.
Food for Thought
- TBP – The Halfway Point “From the March 2020 lockdown to a June 2021 re-opening is a 16-month span. The halfway mark? It’s today. What would you want the results of that soft incarceration to be? “
- NYMag – Children of Quarantine What does a year of isolation and anxiety do to a developing brain?
- GQ – George Clooney When We Need Him Most The actor, director, and GQ Icon of the Year is the one thing we can all agree on—at a time when we can’t agree on anything.
- WashPo – Why my guitar gently weeps The slow, secret death of the six-string electric. And why you should care.
Business
I have been doing a lot of thinking recently about the Venture Capital space as a number of thought provoking articles continue to appear. I don’t have any firm conclusions, yet, but I thought it worthwhile to highlight a few articles. The New Yorker piece is new this week and speaks to a whole bunch of internal / systemic issues in the industry.
- New Yorker – How Venture Capitalists Are Deforming Capitalism Even the worst-run startup can beat competitors if investors prop it up. The V.C. firm Benchmark helped enable WeWork to make one wild mistake after another—hoping that its gamble would pay off before disaster struck.
- Older Pieces:
- II – The Pervasive, Head-Scratching, Risk- Exploding Problem With Venture Capital Because of the failure rates of companies and the undiversified nature of VC portfolios – “The golden rule for investors into the venture asset class must therefore be: Build a portfolio of 500 startups, with 100 companies being the absolute minimum.”
- Kauffman Fellows – Seed Stage Conclusions We found that investors could benefit from indexing as broadly as possible at the seed stage, by putting money into every credible deal, because any selective policy for seed-stage investing—absent perfect foresight—will eventually be outperformed by an indexing approach.
- II – The ‘Problematic,’ VC-Threatening Study That Has Split Harvard Professors Start-up founders barely matter, according to new research.
Summary Thoughts:
- To be successful, you need to be in a lot of deals – but most investors are not
- In some stages, indexing beats active management
- Founder quality as a predictive mechanism for success may not mean anything
Key Question: Is this truly an emperor has no clothes scenario? I.e. are successful VC funds just lucky people who selected lucky founders – with both parties acting like there is real skill? How do investors respond then?
Culture / Tech / Science
- NYT – A Weird Monolith Is Found in the Utah Desert
- High Snobiety – A Ticking Time Bomb: The Inside Story of Oakley’s Watch Line
My Forthcoming Book:
When Anything is Possible – Wealth and the Art of Strategic Living, on January 12, 2021.
However wealth arrives – whether made or inherited, it can be a disorienting and worrying experience. When Anything is Possible is meant to be a guidebook about how to engage thoughtfully and strategically with wealth. Doing so requires a person to articulate 3 key items – Wealth Structure, Wealth Identity and ultimately a Wealth Strategy. The book walks through each of these items in great depth, and guides the reader through a process to develop each.
If you are interested in learning more, visit here and download a free chapter.