“everything is tough” and you can grit your way through it and come out the other side, battle-tested, and with rings on your fingers
There are two ‘Finance To Value’ rules:
- Don’t raise more money in a given financing round than you can create in incremental value during that capital window.
- Don’t let the post-money value of your round get higher than you can grow into during the capital window.
Meditation is like repetitive exercise of the focus muscle in the brain.
Two of my favorite techniques in investing are dollar cost averaging (when buying and selling) and rebalancing.
In public stocks and other marketable assets, these techniques (averaging in and out) are particularly important. I believe you can spot a long term trend and ride it. But I do not believe you can spot a market bottom or top until it is in the rear view mirror. So that is why I like to average into and out of a position over time.
Rebalancing is even more important. If you have a position that has worked incredibly well and it starts to become a very large portion of your overall portfolio, it is wise to take some of that position off the table and reinvest it in other attractive assets. This gives you more diversification, which I believe is generally a good thing, and also de-risks your portfolio from a big selloff in the largest position.
Rebalancing – AVC, May 10, 2017, at 12:09 PM
ModCloth was founded in Pittsburgh, but later moved its HQ to San Francisco. It’s impossible to know if things would have worked out differently had the company remained in the Steel City, but some of its quirky retail culture did seem to get commingled with the “grow grow” tech etho
Using Debt Like Growth Equity – AVC, April 24, 2017, at 10:13 AM
Most people think that VC is all about the initial portfolio construction, selecting the companies to invest in.
…the other half. That includes actively managing the portfolio (board work, adding value, etc), it includes allocating capital to the portfolio in follow-on rounds, and it includes working to get exits. And it is that second part that is the harder part to learn how to do.
Reserves – AVC, January 8, 2017 at 01:49PM