I’m not going Marinetti on this.
There’s something wrong when we’re begging for money. Either your idea needs serious work, or we have the system ass backwards.
A preemptive sorry to some of my closest friends, but you shouldn’t be begging for money. I know that some of you have succeeded but at at what cost? Three years of law school and 3000+ hours of courtroom and office time and growing up in a family of bankers and investors and speculators have taught me this: if you need to go out to ask for money in the manner of convincing someone to bet on you, there’s a fundamental issue with how investments are done:
Scenario a) Your idea is so out of the world that you need both a shit ton of expertise, time, money, energy, and people to get things done. In theory you can change the world, but as everyone drag mother Dorien Corey once said, “I once wanted to change the world, now I just want to leave the world with a little bit of dignity left.” (Oh, and the mummified body in a trunk). If you truly have an idea like that, fantastic, you are ahead of the curve, and if investors don’t get it, don’t dumb it down to…. fucking POWERPOINT. This isn’t high school. This isn’t middle school. Make your frustration into the potential investor’s future loss and work your ass off, but in this scenario, you should not have any direct competitor at all. and there are a million ways to leverage a few thousand dollars into a side business to fund something magnificent.
Scenario b) Your idea is an improvement, a new spin, a different take on something that exists. Great, but why? What’s so cool about your idea? You have competition. Can you eliminate them entirely? If not, you’re playing a fool’s game of a schoolyard brawl. Your idea is transparent. An opaque market creates the best scenario for inventive, innovative ideas. If you need to pitch “______, but…” you’ve already lost. Can you refactor? Can you make enough of a difference? Either way, is it worth your time? Do we really need Uber, Lyft, and Juno? Why is Amazon competing against themselves? If you have an absolute deadline, you are doing it wrong.
And I’m all against any giving up of equity to outside investors. This is my own pet peeve and a holdover from ABA rules regarding law firm ownership, but it’s also, well, an estoppel-worthy (see what I did there?) time to think about your goals. Are you selling? Are you developing? Both? If you’re selling, then valuable doesn’t belong to you at all and you have virtually no control ANYWAY. If you are developing, then you haven’t even gotten there yet. You should do your homework to the point where you better be 5 steps, at least 5, ahead of anyone who wants to invest, and if you’re not good at public speaking, well, that’s a skill you can learn.
But I’m getting ahead of myself. I have a product. It’s not ready. I’m not begging for money. I raise money and develop, raising money is relatively easy, development takes effort, so I didn’t hire anyone. I deliberately and conveniently set up a holding sLLC in Nevada because well, my family, most of my property, hell, pretty much anything I own is in Nevada, except my computers and myself — I don’t own my friends. I read, sometimes too much, sometimes too little. I scope things out. I talk to people. Every moment is an opportunity to refine, every moment, literally, every. single. moment. is a time to refine what you have. I didn’t go Delaware yet. Full disclosure: I’m still licensed to practice in WA in some circumstances, I do have a JD, but not an Ivy — with half the debt your average NYU grad in my situation would have — and I have essentially spent my law school years honing the craft of both negotiation, advocacy, and how to be meticulous, not to mention that I have a fair number, to say the least, of lawyer friends and perhaps the NY Bar in my near future, but right now, I’m not looking to practice, but just setting up the building blocks.
Because my product will not be popular. It does not serve the wealthy. I can’t even tell you much of the specifics. I don’t see it as a hindrance. If you ask, I will tell, but if you can’t gather from what I tell, we won’t ever be on the same page. There’s a likelihood that you can’t own equity in my future PLLC, part of the sLLC, or C or S Corp. I’m not selling that. If you want to fund, I have actual products. If you think I’m talking gibberish, perhaps I am, but I’m not begging for money in hopes of a bonanza.
If I fail, there will be a postmortem, but I doubt it’ll be on the money situation. We are developers, we are businessmen, we create things, beautiful, ugly, popular, niche, whatever. Equity is precious, and I consider that 200k+ I put into law school as the investment. From there on out, it’ll be tough, but I’ll own what I make.
A lot of young entrepreneurs follow the whole Moneyball idea. I read Moneyball in college and immediately found some issues, but I am, after all, an absolutely rabid fan of the Angels and the A’s can go fuck themselves.
In Moneyball, with all the praise to the Oakland A’s, 3 things were not mentioned:
- A’s had one of the most dominant 3 young pitchers: Tim Hudson, Mark Mulder, Barry Zito. They are gone now, but forget Scott Hatteberg or Jeremy “I can’t get under the tag” Giambi. It makes for a great story without one of the most dominant 3, just short of Maddux, Glavine, and Smoltz in the late 90s. In 2002 I went to 3 games and I’ve seen their work. They’re not Moneyball. They’re money.
- The Angels won the world series. #cantpredictball. Scott Spezio. Troy Glaus. Tim Salmon. You don’t hear these names unless you’re an Angels fan. I’m an Angels fan. I know that what’s unsaid usually is the key. What’s unsaid is that sometimes you’re stuck with what you have and make the best of it, or you’re being too ambitious. That year we had Lou Pote pitch in 32 games with an ERA of 3.22. We had Mickey Callaway start 6. You work with what you got. We got the World Series. A’s haven’t won a WS since the 80s.
- Moneyball’s only partly about value investment. Moneyball talks about creating value. That of course works, but that’s more effort on your hands and a risk. Warren Buffett is famously risk averse. I too, don’t like to take risks. I wouldn’t bet on Scott Hatteberg. Not home in Vegas, not anywhere else. They had plenty of duds (from us) that weren’t mentioned. I’m all for transparency, so why not mention the spectacular failure of the LOOGY Mike Holtz, former Angel, Mike Fyhrie, former Angel. It’s not a story of value, it’s a story of luck, that didn’t work out in the end. Yet somehow America took it to their hearts. Mike Trout still had 10.6 WAR this year, by the way.
- It’s your product. Own as much of it as possible. You’ll have money. Make them beg for it.
I’m not linking to my ebay store. I don’t even have a website up (although I can probably put up a Ghost Blog or something similar). I also don’t really care about ebay’s buyer-centric policies, don’t be afraid to sue. This is America. Pro se and Google Scholar and Casetext. You can do this.