I’ve never written about investing before.
In fact, I’ve never really considered myself an investor until recently – despite the fact that I’ve participated in the financing of dozens of companies, and many of them have gone on to become very, very successful.
It has been a humbling experience.
In 2014, I decided to expand my capacity as an investor and advisor, and have joined OATV as a Special Partner.
This decision has spurred an evolution in my thinking about how to add the largest amount of value to a company and what investing means to me.
I’ve never seen my investments as a “portfolio” at all. A while back I laughed when an entrepreneur commented that I’ve got a ‘great portfolio of companies.’ I imagined this manilla envelope my Grandfather might have in the drawer of his desk– the latest analysis of his stock portfolio.
Portfolio? I see faces, personalities, lives and company missions. Not stock ticker symbols or entity names and financial statements.
Since the very beginning, even before the first check I wrote or advisory stock I accepted, I wondered about the power and place of intuition in investing (and business as a whole). It’s been starting to get more air over the past few years both in a positive and negative light.
So what is Intuition? My partner at Undercurrent Aaron Dignan says that intuition is the result of strong pattern recognition that comes from a mix of raw intellectual horsepower and some past experience or gathered information. The key here is past information. Because you got to see what happened and can implement that subconsciously into your prediction for the future. New information can be more confusing because you start to doubt yourself on what pattern you’re seeing — is this an old one we know, or a new one that is more novel?
I tend to agree with his definition, but I like to leave room for a little more mystery. Pattern Recognition x U, where U is still an unknown about ways the body and brain sense-mechanisms work we haven’t yet discovered.
Active and successful angel investor Kevin Rose has written about “Gut Investing” before.
The Wall Street Journal had an interview back in 2009 with David E. Adler, the author of Snap Judgement. The book and interview argues that following your gut feelings with financial decisions can have grave and catastrophic results.
In fact, the internet is littered with headlines like “Gut Instincts Can Hurt Your Portfolio” and “Some simple investor advice: Don’t follow your gut.”
When investing in the public markets this rings mostly true to me. What about the Blink conversation? The power of thinking without thinking?
Despite what some investors think; angel investing isn’t roulette. The odds may be (worse, actually), but the information and signals generated in a first meeting are powerful. It’s those moments that I yearn for as an investor. But sometimes we go overboard.
In my experience thus far, there’s a direct opposite-correlation between Information and Intuition.
That is, the more noise I get, the harder it is to hear my intuition. And the less noise I get, the easier it is to make a very clear decision. Noise comes in as too much information with very little signal.
Most interestingly, I think the companies I have analyzed the most, I made the wrong decision on. The companies I analyzed the least, I made the right decision on (to commit or pass). Maybe it’s because the companies that require the least amount of analysis are simply obvious winners. The team, timing and purpose align perfectly.
I’m not saying no analysis. That’s foolish and you may as well play roulette after all.
I am saying simply do what you can to create less noise and more signal. I care deeply about the founders, the mission of the company, the timing, and what my intuition says about the potential for a perfect storm.
That means one-on-one with the founder(s) and team (in person if possible), and listening to your first impulses. That means a couple reference checks, but not over-doing it. That means being respectful of an entrepreneur’s time to get back to work – which is after all their true purpose.
I think I’d like to learn to get to a faster no and a quicker yes.
At the very least, if you do turn out to be wrong, you’ve wasted less of everyone’s time.
I’m excited to deepen my own involvement in this thing called “investing” and I plan to bring my intuition along for the ride, front and center. I’ll continue my angel investing as Undercurrent Ventures and bring the OATV team in for larger investments if and when it makes sense. I’ll also be spending some time with their existing portfolio companies to add value to the best of my abilities.
Take a minute and look through your dresser and closet and dig up all the band t-shirts you bought at various music festivals and concerts you’ve been to recently and in year’s past. For the nostalgic in the audience, pull out your favorite records from the milk crate. You probably spend upwards of $30 a shirt, especially if it was during a tour, but you were happy to do so, right? Why? You love the band and you liked the design. Now, can you tell me the name of the artist?
Even when designers “make it” and start doing work for the big names – Jay-Z, Metallica, Levi’s, Elvis Costello, etc, they are heavily regulated under contracts. What this means is even if their designs are sold on thousand’s of shirts, they may end up just making a few hundred dollars. A new Kickstarter campaign hopes to change that. Thread Council is bringing a line of shirts created by designers and cutting out the middle-man. The shirts are printed right here in America (San Francisco), and feature a 1-year warranty against fraying or defects.
The plan is for an initial offering of 18 designs, with more artists added if they exceed their goal of $50k. Check out the project and help artists earn a living wage.
Stop Making Sense t-shirt by Undercover.
Steven Harrington’s original You & I sculpture is back, now in a brand-new, shiny black color way. Fun.
Harrington’s first three-dimensional exploration represents the epitome of his work’s goal—to create a dialogue between artist and viewer.
We first covered Steve Harrington back in 2005 and it’s been grew to watch him grow and evolve as an artist.
I love this. This clever, battery-powered robot tuner can tune all six strings in just seconds, and delivers over 75 tunings per charge. To do so, it tunes your physical strings — as opposed to digitally, which can result in degraded tone — and gives you access to 12 common alternative tunings, including six that you can program yourself. Via Uncrate
Awesome. Yago Partal shot pictures of animals dressed up.
Check them out and try not to smile. Starting at $6.00 a print.
Loving the look of the Landmarks & Lions cases for iPhone, iPad, etc.
Each calf skin leather piece is hand cut and sewn together with contrast stitching and individually hand painted. The iPad cases are made-to-order and are individually handmade.