Been working with a great CRISPR company down in Silicon Valley for a while now and think that we just had a breakthrough…
A tremendous breakthrough in both Science and Technology but equally important is that we had a new breakthrough in Finance by completing the First round under my Leadership for this amazing and much promising Startup that will lead the world in this exciting new field of Genetics
Things are moving very fast, but during this funding cycle that I initiated for this Company I had to pull together a syndicate of friends and other Angel Investors along with a few select early stage Venture Capital friends that over the years have gained my trust and I choose to give them first dibs.
Yet the rigorous intellectual discussions that helped me close this First Round for this amazing StartUp, led me to hold a series of round table discussions about not just this Company, but also about all the things that this new BioInformatics, and the new BioTech and Med-Tech or gene editing and splicing disruptive technology that change the world today and help us live healthy lives in our collective tomorrows — really works in the critical and well reasoned minds of the smartest investors, and also in the imagination of those not quite so smart…
So I thought to share some pertinent data and snippets of these intelligent discussions for the benefit of all the Leaders, the CEOs, and Founders of Great Science & Tech Startups out there — that read this blog religiously.
So here’s the gist of it:
Just think about companies such as Google, Genentech, SpaceX, Cancer9, Gilead, Icos, and WellHeart, that were started by really smart people who had the domain expertise and the willingness to think and perceive the world differently, and who were crazy enough to put everything on the line to risk their lives and reputation just to make a difference in your lives, and maybe put a dent in the Universe…
But as an investor and especially when you are not an advanced Scientist, or a Medical Doctor, or you are an Angel without deep domain expertise, especially when you don’t have the relevant background — how do you get it?
How do you grog the concept of this complex science StartUp solution?
How do you understand?
And even if you make a half hearted attempt at understanding — how do you communicate forward your deficient understanding in order to make it better?
At the end of the day — how do you communicate and get to be accepted as a Player, so you can be invited to play ball in this open Darwinian green playing field where I’ve invited You to play with the Big Boys?
How do you prove your worth in sharing info and communicating with these erudite folks that often times speak at a much higher level of abstraction that most of us are normally accustomed to understanding?
And how do you educate all those other folks who want to play junior VC and get their teeth kicked in by the elders who want them to pay for their education, or by the uncompromising Sharks, and the VC shysters who are adept at fleecing the fools at the Carny?
And if you factor in there the Clowns and the leggy bitches, or the boobsy Blondes, and the always cute “Damsels in Distress” who bat their eyelids while claiming that they seriously only want to save the world — if you were good enough to invest a million, or ten, or even a hundred million US dollars of legal tender into their blood sucking Startup — you’ll become overnight Rich & Famous and get to kiss the star eyed lady wearing the black turtleneck sweater, straight in the noisemaker.
Now you get the idea and most of you already know that the sea is full of shoals and the beach is teeming with caymans, salt water croks, and aligators, and further inside, the sharks are hungry as hell. So be careful when you go swimming in the wild waves of the Internet crowdfunding and equity funding and when you go wading at the early stage investment seas, because this make for a really cruel, brutish and short lifetime for the unsuspecting investor.
As a primer — I tell my co-investors that a startup’s pitch or the Founder’s spiel is not about knowing if the science behind the new technology is a breakthrough, but about the full value of the solution to the problem that the new Startup is bringing to the World.
That is the value that American Angels and the American Venture Company gives to all of our co-investors. From offering frequent meetings, and guiding their hand to the best Startups and to the best Term sheet, all the way to offering practical insights, and rules of the road tips amidst the constant exploration of the considerations of how to best invest in truly disruptive technology while mitigating risk and maximizing returns.
Today there is a plethora of deals floating around the internet as general solicitation-type pitches, and specifically, deals we’re all hearing about in the med-tech and the BioTech arena that are being compared to space-age technologies and are being launched unashamedly as Reg A financing opportunities for the Hoi-Poloi of the Internet who don’t even know what Reg A is let alone knowing what the specific StartUp is going to be doing with their money, even if they understood the Science as all Investors ought to do, and yet this vast new majority of unaccredited investors doesn’t bother to learn.
So it’s a giant crapshoot game going on out there and as we all know how these things end — it will surely not be pretty…
Of course I am not commenting on my already voiced skepticism about the viability of getting retail Reg A deals to closure when those deals involve issuers with extremely technical pursuits, but about the basic issue I have that is that super-technical deals should not be sellable to retail unaccredited investors, and to the general public because they poison the well when copycats come up with hokey pokey and baloney fraudulent deals that just look technical when they are just ponzi schemes.
And I think that facts will bear me out on this because a “regular” person without a scientific background can’t even distinguish, let alone evaluate such an opportunity that requires scientific knowledge and deep rational thinking with critical abstraction devotion, just to be able to get through the reading of the patents and the IP that these great companies have.
And I would pose these further Socratic question to the Senators and House Lawmakers, to the White House economic development, and Finance folks, to the SEC Regulators and to the Public alike:
Should we be promoting the Reg A as a tool for all and sundry to use to become another snake oil and hair potion “shopping mall” paradise, for the hacksters, the hawkers, and the fraudsters of the Web, in order for them to peddle fake hopes & broken dreams, to the public while themselves thrive by lighting upon unsuspecting investors who can ill afford to lose their life savings?
I am thinking of the little old ladies and the orphans fund here, just as much as I think of the ill informed young and optimistic hopeful early stage investor that we commonly call Angel. And if we think of it solipsisticaly — we ought to ask if it is even appropriate, to sell such deals to unaccredited investors who have much to lose and very little to gain?
Should we be educating all of you about early stage investment so that you can become proper Angels or should we accept the usual old saw of “Buyer Beware” that “Caveat Emptor” should fully apply and always cover with a fig leaf this Wild-West internet fashion du jour, and we should best let sleeping dogs lay lest we spoil this newfound Freedom to trade in early stage Equities and make a ton of money off the stupids?
From this point of view and if this issue is seen from a Financial Authorities Regulatory perspective or that of an SEC licensed dealer-broker, we’ve got investor suitability issues to think about, but above all that we have ETHICS to uphold and the Moral Sentiment of Market makers and of our Good Selves, that we have to be able to look into our children’s eyes and tell them that we do an honest days work to earn their keep.
And above all, we ought to be our Brother’s keeper and our Sister’s safe holder, and the protectors of our Community, because that’s what Real Men and Women do.
We are not those silly mach jackasses that hawk fake valueless stocks like Theranos and so many others to unsuspecting investors.
And especially because of that and perhaps even more importantly because Regulation A legally allows for the sale of securities to an unaccredited investor — we should be asking the following hard questions too:
Is it really ethical, wise, and beneficial to sell that type of equities and complex stock deals to unaccredited investors, or even accredited ones but not savvy Angels and Early Stage Venture Capitalists?
Moreover, should a complex BioTech StartUp company even want investors inside their deal who are in constant need of education and explanation? Do we want to get into the midst of sophisticated investors’ meeting those people who clearly don’t have the intellectual wherewithal to comprehend the science and the solution we are developing?
Will we need to dummy-down things and discussions to their level?
Won’t this bring the intellectual level of the company down to the low median?
Or should we be spending all of our meeting time within the company educating the poorly educated, so they can play catch up?
This is the stuff that I like to engage my intellect and to think about and thus further the Common Progress. And I like Philosophy and this is the type of Socratic Dialogue that I like to engage into with my students and my colleagues alike…
And the reason WHY we should all be doing this is quite clear. Because it is very important for our rational and critical thinking, in order to create jobs and prosperity. And because only when we get into it and we break the Angel Investment process into the constituent parts, we can make correct informed decisions by staying fully informed and by intelligently determining our course of action and investment — we can successfully take fast actions for maximum gain with control and minimum risk exposure.
I think all of you can understand the value of that course of Investment philosophy and practice. And further think that each one of you now wants to engage with me in the changing of our daily investment practice towards the constant improvement and betterment of our own Life to guide us towards a better future self, and to help us reach and manifest fully, our own version of the American Dream and requisite wealth.
Isn’t that what Socrates promoted and strived for when he chose to enjoy his last few days by taking lessons in music and dance after he was assigned the death penalty?
We all live under a certain death penalty — yet methinks that we should enjoy every minute of our Life left and we ought to learn and improve ourselves constantly in order to better both our Lives and the life of the world around us.
Death and Taxes are a certainty, and we ought to have the requisite nest egg to take care and pay for both. So if nothing else — learn to invest for these inevitabilities and you might come to realize gains far beyond the modicum of success, or well beyond what you want to leave behind for your children, your spouses, and your legacy.
Come then learn from me in one of my monthly meetings all around the world and especially in Seattle, in Silicon Valley, and Shanghai — if you have the chance…
And you are also invited herewith to join me, in order to find the Truth amongst the falsities. Come see True Entrepreneurship in action. Join my conversation in order to seek Veracity amidst the ruins of the Internet, and learn to discern the best and most profitable course of action for Angel Investor complex science and Life Sciences deals today.
Know what to do.
Join me here: http://www.meetup.com/AmericanAngels
Although investor suitability surely comes into play, I think this is a philosophical question more than anything else.
And it surely is one question that CEOs, VCs, Finance brokers, CFOs, and marketing chiefs might want to consider deeply — before pitching certain companies on going the retail route for high street investment from the “poorly educated.”
So let us all remember, that crowdfunding, in state fundraising, and Reg A equity selling, all three — still have tremendous value & utility for sophisticated individuals, companies, and institutions — just not so much for the masses of young investors who don’t understand the meaning of risk capital out there.
Yet as we all know there is a whole lot of fish in the great blue sea out there.
And what I am simply doing here, is an attempt to teach you how to catch the utmost fish, because I want you to get into the habit of truly catching a lot of fish, for yourself, for your family, and for your legacy.
Because as you know — death is nigh, and the taxes are always upon us, and methinks, you best be well prepared for that eventuality.
So get out of your cave and come play with me…
The fish are biting, the weather is good, and the natives are friendly.
Especially the natives of the female persuasion.