3 ms·
This is an important point that's lost on a lot of people. Raising capital and building a great product are two separate actions -- and being good at one means
by david927 14y ago
This is an important point that's lost on a lot of people. Raising capital and building a great product are two separate actions -- and being good at one means nothing to the other.
It's especially important to note, because raising capital means fitting investors' checklists, which in some ways will always be arbitrary. They don't have a magic formula because there's no magic formula to have.
So that leaves a large number of "moneyball" companies, which like Jeremy Lin, weren't given a fair shot because they didn't have "the look" (sole founder, female founder, etc.). And if you fit in that group and haven't received funding, don't change yourself to fit the mold, show your greatness and leave the mold in pieces.
- hodder 14y agoI agree with your point completely. However, on the magic formula bit, I do highly reccomend beginning investors read Joel Greenblatt's book,"The Little Book that Beats the Market", in which he outlines the "magic formula". www.magicformulainvesting.com is the associated website with it. The magic formula basically sorts the US public investing universe by return on capital (EBIT / (net fixed assets + working capital) ), and earnings yield (EBIT/ EV). I do believe following the formula will likely outperform the S&P500 if your time horizon exceeds 3-5 years. Same goes for most proven value strategies, such as buying baskets of low P/E, low P/B, high piotrosky f-score, or net-net baskets.