Search results for: Risk
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2020 Will See a Surge of Accredited Investors
“Big Brother” seems to follow me wherever I go. Even when I go halfway around the world. In the 1990s, I ventured off to Southeast Asia to run a trading company. And there was an unapologetic paternalism among the wealthy and highly educated. While most Asian countries held elections, the majority of them were limited, highly stage-managed and often fixed.…
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The Problem With Ratchet Terms
Three summers ago, my brother took me to one of his favorite bars in New York. (He worked for a hedge fund at the time.) Later that evening, there would be live music and a large raucous crowd. Conversation would be impossible. But while it was relatively quiet, my brother discussed a recent investment proposal he turned down. It was…
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Are Stocks Divorced From Fundamentals?
The last 18 months have been a crazy period for the U.S. stock markets. In the second half of 2018, it looked like we were going into a sustained interest rate tightening cycle. The Fed had interest rates on autopilot, and they kept going higher. The markets weren’t happy about it. In November 2018, I wrote the following: If equity…
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First Stage Investor Issue No. 42
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SEC Considers Opening Up “Accredited Investor” Status to More Investors
As it stands today, there are two separate startup investing ecosystems. One is for accredited investors only, those who either make $200,000 a year in income or are worth more than $1 million. Accredited startup investing deals have been happening online since 2012 on sites like MicroVentures, AngelList and FundersClub. Accredited investor deals are extremely easy to conduct. Startups use…
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Mailbag: When to Sell and When to Hold
Q: Can you guys comment on what to do after an IPO as far as when to sell shares? Also, how long will you guys follow a recommendation after it goes public? Thanks. A: Most IPOs require investors to wait 180 days before selling their shares. Buyouts don’t. I’ll comment on a buyout scenario first and an IPO scenario second.…
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How to Ignite Capital Growth in 2020 (Not Through IPOs)
An IPO is one of the biggest moments of a founder’s life. It’s the crowning achievement of years of hard work, not to mention uncertainty. Startups go from a few dozen investors at the beginning to thousands and eventually millions, if all goes well. Brokers follow them. And big Wall Street investors invest in them. An IPO means the startup…
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Mailbag: To Short or Not to Short
Q: What happens to my shares (or convertible note) in a startup if it gets bought out? A: If you have shares in the startup, they will convert into… Cash if the buyout is a cash deal Common or preferred shares of the buyout company if the startup is bought out via shares A combination of cash and shares if…
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First Stage Investor Issue No. 41
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Mailbag: Commit or Go Home
Q: What’s the very first thing you need to consider before you start investing in startups? A: Let’s start with a couple of assumptions. I’m going to assume you know that startups are more risky than most assets in your portfolio. I’m also assuming you know there’s more upside to startups than most assets in your portfolio. Those are important…
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On AngelList, Keep It Confidential
AngelList continues to amaze me. Just yesterday, I was able to invest in a great deal alongside literally one of the best venture capital firms on the planet. Of course, I can’t tell you anything more about the deal. This is the nature of top-tier startup investing sites like AngelList. The deals are confidential. At the top of most AngelList…
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The First Stage Investor Cannabis Portfolio Is Here
Today, I’m happy to release our new First Stage Investor cannabis portfolio. As you may know, stocks in this industry have been getting beat up this year. Many are down 50% or more just since the spring. We think this is a fantastic buying opportunity. The cannabis industry is still growing quickly, and we believe it’s one of the best…
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First Stage Investor Issue No. 40
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Green Chip Stocks: Featuring the Coca-Cola of CBD
I know hearing about the evils of the pharmaceutical industry can be depressing. But the future is bright. The medical marijuana industry is disrupting Murder Inc.’s stranglehold over American healthcare. Every election cycle, this wonder-crop becomes legal in more states. Federal legalization is inevitable. It’s only a matter of time. That means Murder Inc.’s days are numbered. All-natural medicine derived…
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Get Wealthy AND Healthy on a Slam-Dunk Opportunity
Deal Details Startup: NowRx Security type: Preferred equity Round size: Up to $20 million Valuation: $65 million Share price: $3.4477 Minimum investment: $1,000 Raise: Series B Of all the things that you can order for free same-day delivery – from meals to mattresses – what’s amazing to me is the one thing you can’t… Medicine. Okay, CVS and Walgreens are providing home delivery service. But they…
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Mailbag: Why Bitcoin Is Still Crushing Altcoins and Startup Deal Flow Is Better Than Ever
Q: Why are altcoins doing so poorly compared with bitcoin? A: During the 2017 crypto bull market, the price of almost every coin went up dramatically. On a percentage basis, hundreds of altcoins outperformed bitcoin. However, very few altcoins have done well since. I think the reason is simple. Most altcoins are not seeing real-world adoption. A lot of these…