

If I Started an Investment Fund - mikekarnj
http://www.mikekarnj.com/blog/2009/11/22/if-i-started-an-investment-fund/

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ppereira
The investment into superstars looks like a new spin on slavery. Shall we call
this equity bondage?

Your bank calls, your credit card is at its limit and you just missed your
mortgage payment. But don't worry, they are willing to front you $100,000 now
for 15% of your future earnings.

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byrneseyeview
I really wish more people would see things your way! If we all thought that
_selling_ 15% or more of your annual income was bad, imagine what we'd think
of having it taken without our permission!

(Also, is there any price at which you'd call that a fair deal? What if I sold
that 15% for twice its net present value? I could do less work, and still have
more money! I always thought the problem with slavery was the involuntary
servitude thing; knowing that slavery is morally equivalent to venture capital
certainly changes things.)

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pclark
He's listed companies that are already growing. it isn't hard to name startups
that are already on track to going great places. its far harder to look at a
deck or raw product and work out why it'll be awesome without being
constrained by why its broken.

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biznerd
Many of them as well are "lifestyle" businesses that are probably not going to
need capital scale (and thus do not need any VC)

What would CarbonMade do with a $3 million investment?

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spencerfry
I think you're right that many of the companies listed are lifestyle
businesses. For example, SquareSpace and Harvest are not interested, and never
will be interested, in taking money. However, it's best to weigh every option
you're presented with. I'll leave it at that. ;)

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mikekarnj
That's a great point Spencer. However, I think companies that want to scale
faster will need to take investment. Why wait a year to get enough cash in the
bank to hire more people when you can do it now? Opportunity costs are
tremendous.

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spencerfry
It can take a few years (or more) to figure out what your ultimate end goal
is. The first few years could simply be about acquiring customers in your
market. You can then use those newly acquired customers to explore different
business opportunities. Those new business opportunities could require new
capital.

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mattheww
With regard to investing into superstars, I can't help but think I already
have two investors: my parents.

And to ruin the sentimentality, I guess I've probably returned 2-3% of my
gross in gifts, though I never thought of it that way until now. And $300k is
probably in the ball park of what they spent to "raise" me.

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mikekarnj
Ha. That's a great point. Never thought of it like that either. I'll started
returning 2-3% in gifts as well.

