A veteran investor who's backed 150 startups reveals 75% of them fail, calling entrepreneurship "insane" for most people. He and a co-host argue that index funds and ETFs are a smarter bet than starting a business, especially for beginners.
If you were to simplify for someone in their 20s or 30s, who's never invested before on how to invest and what to invest in, what would you share with them? As if you were teaching someone that had no understanding of what investing or the stock market or trading meant and you could simplify that, what would that look like?
Well, so I think a better way.
To think about it is there's something that we all can relate to is the idea of starting a company. Right. We all want to be entrepreneurs. Not all. Most of us in the back of our head, it would be cool to, you know, own your own company, whatever that company is. Right. It never used to be like that, but over the last 20 years now we all kind of think like that. I don't care if you're a celebrity, if you're a homemaker, there's a company out there that you would like to start and own. Or the idea of being an entrepreneur. Well, that's, that's half of my life. Right. I'm an entrepreneur. I've been in startups my entire career. I've started a multitude of companies, have sold them. I've had a few big success successes in that world and I've had insane number of failures in that world, both as an operator and as an investor in private companies. That is exceptionally hard, that is exceptionally risky.
You could try to do that and.
Chances are you will go your entire life and do nothing but fail. Okay.
How many companies have you invested in?
I am invested in about 150 private.
Companies, not private companies. 150 right now.
Private, yes. Meaning each of those companies.
I probably have met the founder and have done a massive amount of due diligence on the space and the sector.
It just, it's been a huge part.
Of my life, quite honestly.
And how many of those will fail or have failed?
Almost all of them. Probably like 75% maybe.
Wow. So you do a lot of the research, the analytics. You've got a data company that analyzes all these things in the industries and helps predict certain things. And even with all that work, 75% of your investments are probably going to fail.
Yeah. Because you're investing in an early stage company that has a tremendous amount of. You're investing in an idea and the person.
Okay. And I hope that in five to 10 years it'll make money.
Yeah. So that's where it gets risky. That's where you could make a case that maybe you should do that and.
Maybe you should just never do that.
Right. I would say for most people it's.
Insane to go out and start your own company ever.
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