As a founder/operator of a business, I have seen ups & downs over the years. There are many lessons learned that apply in all businesses and within early stage investing. When I started TYGES (www.tyges.com) in July 2002, ten months after 9/11, there was tremendous uncertainty in the world. To start this business, my wife & I leveraged everything we had. We took a high interest loan to pay the franchise fee for purchasing a territory/training and we also took a line of credit (LOC) against the equity built in our home. We used the LOC money to pay 1) the monthly note on the loan 2) our monthly personal bills (mortgage, LOC interest, etc.) 3) our personal bills (food, gas, utilities, etc.) and to 4) infuse operating capital into a fledgling startup for office space, equipment, and people. We were all in! This clearly paid off for us as we have reaped many returns for this risk twenty-one years ago. Once we paid everything off, we took most of the gain and invested in a commercial building in 2008/2009 and it took every bit of cash we had. At the same time, the financial crisis hit, banks disappeared, and lending grinded to a halt. By that point, we were already too far in to get out. To say I was terrified, afraid, worried doesn’t do it justice. It took some sacrifice, including selling our home and dipping into our 401k to keep us afloat both personally & professionally. We not only survived but we thrived during these tumultuous times. Then in 2020, COVID hit, and the world stopped. The difference this time, is we were somewhat ready and had experience in how to deal with difficult times. We were down for about three months (most of it was dealing with how to properly lead during this timeframe), but we got back on track and continued to thrive and grow.
What do these examples have in common? They were downtimes but they were also opportunity knocking.
Why do I share this?
Difficult times aren’t new.
- There have & will always be financial issues, corruption, outbreaks, war, etc. The fear is heightened now but now is not the time to seize & freeze. Rather, now is the time to strike.
Difficult times are never as difficult as they seem.
- The bulk of the people who write about difficult times are not qualified to say anything as all they do is dream and talk. They have never and will never take the risk. Take it from a guy with 20+ years an entrepreneur and 10+ years as an investor, most of it is fear-based trash. The savvy people see opportunity in these markets and act accordingly.
Difficult times also provide the best opportunities.
- Many of the great businesses that we read about and regret not getting involved in are founded in times like now. Do you want to look back upon this time and regret not getting involved? I don’t.
Conceptually, everyone knows that “this too shall pass” and now is the time to act. Most people won’t because they fear the end of it all and there will be no return. Those that keep their wits about them will see what I’ve learned over the past 20+ years, this is an opportunity for you to change the trajectory of your future. This is an opportunity to make the kind of impact you have always wanted to make. This is an opportunity to get into things that are typically closed off to all of us because you don’t know the right people, you don’t have enough money, or you just don’t have the access.
Why is angel investing still a great option in these times?
- Early-stage investing has historically performed well alongside other asset classes.
- Many of the great ideas have come out of difficult times as people look to solve a particular problem.
- Valuations are reasonable and sometimes discounted given the reduced number of investors.
- Getting into great deals today is more achievable, due to the lack of free-flowing cash.
We started ShockVentures because we want to democratize Angel Investing. We want to give normal people like us access to deals globally that they never would have seen or heard about. We want to make an impact in an area where we have expertise, and the macroeconomic trends are in our favor. We want to Empower Entrepreneurs, Empower Investors, and Empower Communities. This comes from a guy who grew up with significant disadvantages. I want to break this limitation not only for myself but for my children and the generations that follow. I’m teaching my kids that anything is possible and to not let the “system” define or hold you back.
It doesn’t have to be investing in early-stage startups but do something. I promise you — you won’t regret trying. You will though, regret NOT trying.
Opportunity is knocking.
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