Investing in seed round

Private equity is like buying call options. Most will expire worthless and a few will go up 10×100 times. The people that play are not that different from trading in the futures pit. Tom Baldwin got all the bond futures flow because he was willing to take my huge orders just before a big number came out. No one else is willing to trade just before a big number because you assume the order has inside information. More often than not, Baldwin would get killed on the number. But because he was willing to trade and take a loss, he would get all the customer flow and make that money back in the next 10 minutes with all the easy orders that follow.

If you want to be invited for private equity, you have to invest in all the crap that comes along as well. Most of them are going to fail like buying call options and you are going to make 10x100 times on a few.

I would argue that IPOs today have less upside then they did 30 years ago. These companies have raised so much capital before going public, there is little left on the table. The stock gets pumped by the underwriters who get free call options. The snap underwriters make a $300 million profit with the SNAP at $27. No surprise, the stock has been pumped up and these guys will be selling for a huge profit with no risk! After the lock up period, it will be the same as Facebook trading below its IPO price. It will have to do the impossible like Facebook to survive.

The options start trading on snap this week.
 
marketsurfer said:
It's easy. Join angel.co and/or find a fund like my close friend Vishal H. Www.atmn.vc automation ventures vc to invest with.

I know several ex hedgies now in the vc biz. Its all about your network. and its the only place a $10k investment can become multi millions.

Right now we are liking castle, momentummachines, youderm, nighthingale et al.

surf
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This is for accredited investors only, right?
 
Mtrader said:
First thing you should realize is that maybe 1% or even less of all seeds become real big successes.
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This, it seems to me, is the key concept that many people fail to appreciate.

Understandably enough, it's all too easy to be super-impressed by learning of someone's investment of a few thousand turning into multi-millions, but what one typically doesn't see is the 200 other companies in which similar investments were made that produced no return at all and were written off. It's just a form of selection-bias and survivorship-bias, really.


Mtrader said:
Finding the gems is like trading.
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That's the selection-bias.


Mtrader said:
In fact in hindsight all success stories look easy and simple.
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And that's the survivorship-bias.
 
java said:
That's really the question isn't it comparing any investment or trading endeavor, Is it better than just owning a normal small business like a dry cleaners?
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It depends on your goals. Who theF would want to run a dry cleaner? Although its the easiest business to make a million or two.

VC's have much bigger goals thanthe small business mind set of a dry cleaner owner.
 
Stymie said:
Private equity is like buying call options. Most will expire worthless and a few will go up 10×100 times. The people that play are not that different from trading in the futures pit. Tom Baldwin got all the bond futures flow because he was willing to take my huge orders just before a big number came out. No one else is willing to trade just before a big number because you assume the order has inside information. More often than not, Baldwin would get killed on the number. But because he was willing to trade and take a loss, he would get all the customer flow and make that money back in the next 10 minutes with all the easy orders that follow.

If you want to be invited for private equity, you have to invest in all the crap that comes along as well. Most of them are going to fail like buying call options and you are going to make 10x100 times on a few.

I would argue that IPOs today have less upside then they did 30 years ago. These companies have raised so much capital before going public, there is little left on the table. The stock gets pumped by the underwriters who get free call options. The snap underwriters make a $300 million profit with the SNAP at $27. No surprise, the stock has been pumped up and these guys will be selling for a huge profit with no risk! After the lock up period, it will be the same as Facebook trading below its IPO price. It will have to do the impossible like Facebook to survive.

The options start trading on snap this week.
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It's nothing like it. There's no traditional expiration The upside can be 10,000X plus not just 100. But yeah, most go to zero.
 
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Xela said:
This, it seems to me, is the key concept that many people fail to appreciate.

Understandably enough, it's all too easy to be super-impressed by learning of someone's investment of a few thousand turning into multi-millions, but what one typically doesn't see is the 200 other companies in which similar investments were made that produced no return at all and were written off. It's just a form of selection-bias and survivorship-bias, really.





That's the selection-bias.





And that's the survivorship-bias.
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Its nothing like trading. In trading -- information is asymetrical. In vc, everyone has access to same info. Heck, u can easily have dinner with the CEO and founder and pick their brain. I do it all the time. Try that with any public traded company. Good luck
 
marketsurfer said:
VC's have much bigger goals thanthe small business mind set of a dry cleaner owner.
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Yes, to sell a lot of shovels to golddiggers you must make them dream of much bigger profits. Preferable a billionaires status.

I would like to see the list of millionaires/billionaires as a result of being part of the VC's as small investor.
I think this list will be very short. Probably the list of losers will be about 1 million times longer.

Why do you still have to sell books at $18? You should be a billionaire as you know everybody and always sit on the first row. You sound like Bernie.
 
marketsurfer said:
In vc, everyone has access to same info.
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Completely wrong. They tell you what they decided that you can know. Like in every business there are always people in a better position to know things they don't share. Not only in VC's but everywhere.

From your actual situation I can conclude that you where not very successful in picking other's brain.
Your story sounds again like Bernie speaking.
 
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