11 ms·

A private high school in California makes $24M gain on Snapchat investment

58 points by rak00n 10y ago

pwnna 10y ago
Kind of clickbait title? It's an investor that convinced a local school to invest $15k in a $500k investment that his partners couldn't put down. This time they lucked out... but isn't this in general kind of reckless as there's no guarantee for RoI at all and the school is kind of taking away the money from the kids? Also how are schools allowed to invest like this at all?
- frisco 10y ago
  This is an educational program for the kids through the school. Lightspeed is definitely not struggling to fill out a $500k allocation... a general partner of the fund just happened to be a school parent and got the school club into the deal. A very Silicon Valley and unusual thing for a school club for sure, but nothing sketchy at all.
  - exclusiv 10y ago
    Definitely not sketchy as you mentioned, but according to the article the parent is right about the allocation: > It turns out that Eggers actually persuaded his partners to cough up only $485,000 of the $500,000 investment. On his invitation, Natalie and Andrew’s school, St. Francis High School in Mountain View, Calif., chipped in the remaining $15,000. I read on another article that he's on the board of the school's investment fund which backs startups. So it's a strategic initiative and definitely not sketchy as it's a private school.
    - frisco 10y ago
      > It turns out that Eggers actually persuaded his partners to cough up only $485,000 of the $500,000 investment. This almost certainly means convincing his partners to let someone else come in instead if LVP taking the whole $500k. Lightspeed has over $3B in assets under management and $500k is already at the low end of check sizes they'd generally write. On the other hand, squeezing a friend into an interesting deal is a big favor.
      - exclusiv 10y ago
        Oh yeah that's my mistake. That makes perfect sense now given your comment and re-reading that line.
- sparky_z 10y ago
  It's named after a Catholic saint, so I kind of doubt it's a public school.
  - WillPostForFood 10y ago
    I get your point, and you can pretty much tell it is a Catholic school from the name, but in California, there are plenty of public schools named after Catholic saints because there are a ton of cities named after Catholic saints. Santa Monica High School, San Jose High School, San Miguel Elementary School. I think the tip off is whether the it's anglicized or not.
    - hkmurakami 10y ago
      The tipoff is whether the schools' name is based on the name of the city, no? In the Los Altos Mountain View area, I can name St. Nicholas, St. Simon, and St. Francis which are all private schools, none of which are named after the city that they are in.
      - Rebelgecko 10y ago
        There are lots of schools named directly or indirectly after saints that aren't also in cities named after saints.
    - dragonwriter 10y ago
      > I think the tip off is whether the it's anglicized or not There are definitely both public and private schools in California with the names of Catholic saints in both English and Spanish on each side, so that's not a certain tip off.
- bpodgursky 10y ago
  How is it clickbait? It is literally what happened.
  - jbpetersen 10y ago
    We've come full circle, now even the clickbait is fake. /s?
- josephpmay 10y ago
  I happen to know a lot about this situation, and there wasn't anything sketchy at all: 1) St. Francis is an expensive ($17k a year, which is actually pretty low for the area) private school, not a public school that receives funding from the government. 2) Most private schools have endowments and investment vehicles to manage those endowments. Tuition money generally isn't going into these funds, rather they're for donations and capital campaigns. 3) Many of the parents of the kids at St. Francis are tech executives or VCs, so it's not surprising that they're investing in startups instead of more traditional mutual or index funds.
  - nodesocket 10y ago
    Note to self, send my future kids to St. Francis.
    - deleted 10y ago
      [deleted]
    - LoonyBalloony 10y ago
      Note to self, stop buying food and get that vasectomy.
    - andyjsong 10y ago
      Take a look at Bellarmine, Castilleja, and Harker as well.
- chrisseaton 10y ago
  > Also how are schools allowed to invest like this at all? Companies are allowed to invest their private money however they want. Why does it make a difference if it's a school?
- qeternity 10y ago
  > but isn't this in general kind of reckless as there's no guarantee for RoI at all Nothing has guaranteed ROI...
atomical 10y ago
So normal people can't get into deals like this?
- nefitty 10y ago
  You know, I spent a few hours this morning almost fuming at how insanely lucky it is to get a return on $15k like that. I started panting at the possibility that I might somehow get this lucky, but of course, turns out it was $15k of a $500k investment -_-'
  - verroq 10y ago
    You could have bought Bitcoin 5 years ago with $15k and be worth $3.8m right now.
  - atomical 10y ago
    I had similar thoughts. I realized that these are "get rich quick" thoughts and for most people that never ends well.
    - skookumchuck 10y ago
      There was a story on Reddit a while back about a soldier who bought a Rolex in the 1960s for $120, and it was worth $70,000 today. Pretty lucky, right? But then someone pointed out that if he'd invested in the S&P 500 instead, it would be worth $25,000 today (if I remember the figures correctly). It's pretty hard to outdo investing in the S&P 500, and most anyone can do it.
      - stagbeetle 10y ago
        > There was a story on Reddit a while back about a soldier who bought a Rolex in the 1960s for $120, and it was worth $70,000 today.[0] > Pretty lucky, right? But then someone pointed out that if he'd invested in the S&P 500 instead, it would be worth $25,000 today (if I remember the figures correctly). What's not said is that from 1960 till 1980, you'd only make 200% (10% annualized). Compared to angel investing giving you 250% over 4 years (62.5 annualized).[1] This is also assuming you know how to time your trades properly and get in at a bottom. If you got in at the floor of the dot com crash you'd make, at most, 180% in the 15 years you held (12% annualized). If you got in at the floor of the 07-09 crash you'd make, at most, 250% in the 9 years you held (28% annualized). These are best case scenarios and it's unlikely for someone that believes in the S&P will know about market timing. The base of this argument is laden with guilt and regret over not having 20/20 hindsight. "If you got in at X you would have Y." The same is said with BTC, "if you got in at the beginning you would have been an Xillionaire!" However, this is no longer practical in the ironed-out, risk-adjusted world we live in now. The S&P's risk has been priced in and over-sized returns are no longer possible. You'll start seeing this with startups in the coming years too. As people start understanding them more, risk will be lower, and thus returns will be lower. [0] https://www.youtube.com/watch?v=li0mRLcGbU8 https://www.youtube.com/watch?v=li0mRLcGbU8 [1] https://techcrunch.com/2012/10/13/angel-investors-make-2-5x-returns-overall/ https://techcrunch.com/2012/10/13/angel-investors-make-2-5x-...
jnordwick 10y ago
I hope he gets his tuition waved for the next couple years.
deleted 10y ago
[deleted]

58 points by rak00n 10y ago

pwnna 10y ago

Kind of clickbait title? It's an investor that convinced a local school to invest $15k in a $500k investment that his partners couldn't put down. This time they lucked out... but isn't this in general kind of reckless as there's no guarantee for RoI at all and the school is kind of taking away the money from the kids? Also how are schools allowed to invest like this at all?

frisco 10y ago
This is an educational program for the kids through the school. Lightspeed is definitely not struggling to fill out a $500k allocation... a general partner of the fund just happened to be a school parent and got the school club into the deal. A very Silicon Valley and unusual thing for a school club for sure, but nothing sketchy at all.
- exclusiv 10y ago
  Definitely not sketchy as you mentioned, but according to the article the parent is right about the allocation: > It turns out that Eggers actually persuaded his partners to cough up only $485,000 of the $500,000 investment. On his invitation, Natalie and Andrew’s school, St. Francis High School in Mountain View, Calif., chipped in the remaining $15,000. I read on another article that he's on the board of the school's investment fund which backs startups. So it's a strategic initiative and definitely not sketchy as it's a private school.
  - frisco 10y ago
    > It turns out that Eggers actually persuaded his partners to cough up only $485,000 of the $500,000 investment. This almost certainly means convincing his partners to let someone else come in instead if LVP taking the whole $500k. Lightspeed has over $3B in assets under management and $500k is already at the low end of check sizes they'd generally write. On the other hand, squeezing a friend into an interesting deal is a big favor.
    - exclusiv 10y ago
      Oh yeah that's my mistake. That makes perfect sense now given your comment and re-reading that line.
sparky_z 10y ago
It's named after a Catholic saint, so I kind of doubt it's a public school.
- WillPostForFood 10y ago
  I get your point, and you can pretty much tell it is a Catholic school from the name, but in California, there are plenty of public schools named after Catholic saints because there are a ton of cities named after Catholic saints. Santa Monica High School, San Jose High School, San Miguel Elementary School. I think the tip off is whether the it's anglicized or not.
  - hkmurakami 10y ago
    The tipoff is whether the schools' name is based on the name of the city, no? In the Los Altos Mountain View area, I can name St. Nicholas, St. Simon, and St. Francis which are all private schools, none of which are named after the city that they are in.
    - Rebelgecko 10y ago
      There are lots of schools named directly or indirectly after saints that aren't also in cities named after saints.
  - dragonwriter 10y ago
    > I think the tip off is whether the it's anglicized or not There are definitely both public and private schools in California with the names of Catholic saints in both English and Spanish on each side, so that's not a certain tip off.
bpodgursky 10y ago
How is it clickbait? It is literally what happened.
- jbpetersen 10y ago
  We've come full circle, now even the clickbait is fake. /s?
josephpmay 10y ago
I happen to know a lot about this situation, and there wasn't anything sketchy at all: 1) St. Francis is an expensive ($17k a year, which is actually pretty low for the area) private school, not a public school that receives funding from the government. 2) Most private schools have endowments and investment vehicles to manage those endowments. Tuition money generally isn't going into these funds, rather they're for donations and capital campaigns. 3) Many of the parents of the kids at St. Francis are tech executives or VCs, so it's not surprising that they're investing in startups instead of more traditional mutual or index funds.
- nodesocket 10y ago
  Note to self, send my future kids to St. Francis.
  - deleted 10y ago
    [deleted]
  - LoonyBalloony 10y ago
    Note to self, stop buying food and get that vasectomy.
  - andyjsong 10y ago
    Take a look at Bellarmine, Castilleja, and Harker as well.
chrisseaton 10y ago
> Also how are schools allowed to invest like this at all? Companies are allowed to invest their private money however they want. Why does it make a difference if it's a school?
qeternity 10y ago
> but isn't this in general kind of reckless as there's no guarantee for RoI at all Nothing has guaranteed ROI...

atomical 10y ago

So normal people can't get into deals like this?

nefitty 10y ago
You know, I spent a few hours this morning almost fuming at how insanely lucky it is to get a return on $15k like that. I started panting at the possibility that I might somehow get this lucky, but of course, turns out it was $15k of a $500k investment -_-'
- verroq 10y ago
  You could have bought Bitcoin 5 years ago with $15k and be worth $3.8m right now.
- atomical 10y ago
  I had similar thoughts. I realized that these are "get rich quick" thoughts and for most people that never ends well.
  - skookumchuck 10y ago
    There was a story on Reddit a while back about a soldier who bought a Rolex in the 1960s for $120, and it was worth $70,000 today. Pretty lucky, right? But then someone pointed out that if he'd invested in the S&P 500 instead, it would be worth $25,000 today (if I remember the figures correctly). It's pretty hard to outdo investing in the S&P 500, and most anyone can do it.
    - stagbeetle 10y ago
      > There was a story on Reddit a while back about a soldier who bought a Rolex in the 1960s for $120, and it was worth $70,000 today.[0] > Pretty lucky, right? But then someone pointed out that if he'd invested in the S&P 500 instead, it would be worth $25,000 today (if I remember the figures correctly). What's not said is that from 1960 till 1980, you'd only make 200% (10% annualized). Compared to angel investing giving you 250% over 4 years (62.5 annualized).[1] This is also assuming you know how to time your trades properly and get in at a bottom. If you got in at the floor of the dot com crash you'd make, at most, 180% in the 15 years you held (12% annualized). If you got in at the floor of the 07-09 crash you'd make, at most, 250% in the 9 years you held (28% annualized). These are best case scenarios and it's unlikely for someone that believes in the S&P will know about market timing. The base of this argument is laden with guilt and regret over not having 20/20 hindsight. "If you got in at X you would have Y." The same is said with BTC, "if you got in at the beginning you would have been an Xillionaire!" However, this is no longer practical in the ironed-out, risk-adjusted world we live in now. The S&P's risk has been priced in and over-sized returns are no longer possible. You'll start seeing this with startups in the coming years too. As people start understanding them more, risk will be lower, and thus returns will be lower. [0] https://www.youtube.com/watch?v=li0mRLcGbU8 https://www.youtube.com/watch?v=li0mRLcGbU8 [1] https://techcrunch.com/2012/10/13/angel-investors-make-2-5x-returns-overall/ https://techcrunch.com/2012/10/13/angel-investors-make-2-5x-...

jnordwick 10y ago

I hope he gets his tuition waved for the next couple years.

deleted 10y ago

[deleted]