The views expressed may not reflect the opinions of venVelo’s board or its investors.
I heard two different stories on the radio today. Even if I
get some of the facts wrong (since I chose not to take notes while driving), I
thought the similarities were worth sharing.
The first story was about Warren Buffet’s idea of fat pitch investing. He reportedly said
that while baseball has a strike count, investing does not. You don’t need to
swing at any of the first six pitches. Or the first 600. You can never strike
out. With over a $1 billion in cash to invest, Buffet’s Berkshire Hathaway
could afford to swing at some pitches outside of the strike zone. But he chooses
to wait for a fat pitch. Patience.
The second story on NPR’s “Marketplace” was an interview
with the founder of Yelp. After 10 years – virtually all of the Web 2.0 era –
Yelp turned a small profit. It had turned down a nine-figure offer from Google
years ago and was only now profitable. Yelp closed today with almost a $5 billion market cap, though way down from its 52-week high. Selling in March
would have made you a lot more money. Too patient?
What is the lesson for early-stage companies? Are you more
or less patient than your investors? Perhaps that is a question both sides
should ask during due diligence. A difference of opinion is certainly going to
be problematic later.
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