Allocating capital vs. time
The key to prosperity and abundance in your career resides in a single skill: Efficiency.
A few months ago, I hit a significant milestone: investing in over 100 companies!
It’s incredible to see how the years of hard work and planning are beginning to come together. But, I’m facing a new challenge as a result of the sheer number of startups in my portfolio.
As the portfolio continues to expand, it’s becoming more and more difficult to give each company the same amount of attention.
In the past, I would have spent weeks working with a single founder to help secure a new partner, a new hire, or a new investor… Only to realize that I may only have $25K invested in that company.
While $25K is no small check, today it represents less than a half a percent of the total capital I’ve allocated!
How can I justify spending so much time on a company when my stake is so small?
It seems to me that every investor approaches this bandwidth constraint differently:
- Some investors prioritize the companies that have the most momentum.
- Some investors prioritize the companies that they have the most dollars invested in.
- Some investors prioritize the companies that represent their largest markup.
- Some investors prioritize the companies with the most public notoriety, PR or ‘hottest’ lead investors.
- Some investors prioritize the companies that simply ask for the most time/help.
- Some (but very few) investors prioritize the companies that are struggling the most.
The best way that I’ve found to overcome this constraint is by being more efficient with my time.
Years ago, it would have taken me months to accomplish what I can now do in a matter of weeks (or even days!).
Before, I tried to take my limited skills and provide every kind of help to every single person I could. Now, I focus all of my energy on the few areas where I can make the greatest impact.
That’s how I’ve been able to manage over 100 different portfolio companies successfully.
What about you?
If you’re an investor, what have you done in the past to balance time vs. equity stake?
- - -
Speaking of companies with incredible momentum, go check out Caraway Home 🍳 and Arber 🪴, two companies in the SuperAngel portfolio founded by legendary entrepreneurs, Jordan Nathan and Vanessa Dawson!
