Book Review: The Cartel

The Cartel by Don Winslow is a gritty epic set in the midst of the Mexican drug war. Traffickers, DEA agents, corrupt politicians, and everyday people are caught up in a deadly game with no true winners. Although the book is fiction, Winslow spent more than a decade researching the conflict and many of the scenes in the book are based on real-life events. It's a disturbing, ambitious, violent political thriller that's worth your time.

3 tips for building a startup investment portfolio

My friend Josh Maher (@joshmaher) is a prolific angel investor, President of Seattle Angel, and author of the new book STARTUP WEALTH: How the Best Angel Investors Make Money in Startups. STARTUP WEALTH delivers engaging interviews with early-stage investors in Google, Invisalign, ZipCar, Uber, Twilio, Localytics, and other successful and not so successful companies. It outlines how an amazing IPO can result in early investors getting pennies on the dollar—or a 10x+ return. I asked Josh to write this guest post sharing some of the key insights from the book. You can learn even more about it here. Here's Josh:

Six years into Shark Tank, three years into the JOBS Act, and we’re seeing a record number of investors adding early stage investments to their portfolio. Building an early stage portfolio is easier and easier with software such as DreamFunded, AngelList, and OurCrowd reducing the friction to finding and investing all over the world. This is good and bad news for entrepreneurs. Free flowing capital without the connections, advice, and mentorship that usually accompanies early stage investment can put a company at a competitive disadvantage against other new entrants.

After interviewing over 50 of the best angel investors in the country for my new book Startup Wealth: How The Best Angel Investors Make Money In Startups, I found three themes repeated over and over again that investors looking to build a portfolio of early stage investments shouldn’t ignore.

  1. Decide if it’s a full or part time commitment. Deciding this up front is critical, you’ll easily get wrapped up in an investment that needs a full time commitment and you may be un-prepared to offer the assistance they need to succeed. Here’s what John Ives (@jives), founder of Boulder Angels and Tahoma Ventures advises, “I would make sure that that person makes a conscious decision between is this a hobby or is this your career.” This sentiment is further clarified by this quote from Jim Connor (@jconnor_sha), member of the Sand Hill Angels, CEO of First Focus Learning Systems, and Producer/Host of the talk show Game Changers Silicon Valley“… as an angel investor, you have to decide if you totally want to be a passive investor. Maybe you give advice, you help out, you do some mentoring but that's all you can do because you're in a lot of companies and you have limits on your time. You can easily get your time fully consumed.”
  2. Are you a trend spotter or hidden value finder? Figuring out if you’re great at spotting the next trend isn’t necessarily easy. Would you have picked the iPhone, WhatsApp, or Fitbit? Or would you have been more comfortable making an investment in the next healthcare device with the possibility of becoming the standard of care? Chris Sheehan (@c_sheehan), past director of Boston’s CommonAngels, currently Sr Director, Delivery at Applause advises, “Find your own comfort zone of the style of angel investing that you want to do.” Digging a little deeper, Bob Bozeman of Eastlake Ventures and early investor in OpenTable and PayPal: “…this idea of vision investing versus metrics investing, if you’re really more comfortable with metrics investing then don’t do angel investing. The early stage really isn’t going to be good for you and you’re going to be driving the entrepreneurs for all the wrong reasons. They don’t have metrics until they’re well into their business. A pure metrics investor should try to participate more in A rounds, or something like that, or syndicate behind people that are vision investors.”
  3. Start slow and proceed with caution. Investing too quickly is the easiest mistake to make, writing big checks or just writing too many checks is easy to do when you start seeing the amazing ideas being brought into the world by so many incredibly capable people. It takes more than ideas and people though and learning how you prefer to invest takes time. Christopher Mirabile (@cmirabile) is the co-Managing Director of LaunchPad Venture Group and cofounder of Seraf counsels, “…one mistake that you see a lot of times is people tend to write a little bit too big of a check in their first couple of deals. What I’m trying to say is ‘Don’t be impulsive. Being quick and decisive is necessary but be thorough too – don’t be impulsive.’” This sentiment is repeated over and over again, Chris Sheehan states, “I would just be a little cautious about really rapid pace of investment.” Matt Dunbar, managing director of the Upstate Carolina Angel Network chimes in with, “You got to be patient. You can't go into these things expecting to get your money out next year.” Rudy Gadre, partner at Founders Co-op agrees, “Try to minimize the impact of mistakes. If you're worth 5 million dollars, don't make your first check 1 million dollars. Try 25 thousand dollars or something like that. Start learning about what can go wrong.”

Whether you’re thinking about adding early stage investments to your portfolio or have already begun, these three tips will help you build a portfolio of companies that you can be happy with over the long run. You need to decide if this is a full or part time commitment, if you’re a trend spotter or better at finding hidden value, and you should start slow, proceed with caution, and discover the pace that you can comfortably invest every year for the rest of your life.

If you like this post, you might also enjoy How to raise money from angel investors.

Nothing beats connecting with fans in-person

This was really special. My favorite thing about writing books is seeing the community that connects with the story and congregates around it. Novels are such an intimate connection between writers and readers and other readers (and characters!).

My email newsletters are essentially love letters to fans of The Uncommon Series. But email only goes so far. Too often, we let screens intermediate our relationships. So when I travel, I always try to connect with fans in-person.

In June, I grabbed beers with a fan in Dublin who's in the process of building his own startup. Last week in Boulder, I had lunch with Daniel Zacek, a fan who is a veteran entrepreneur and runs a software development firm (I also made sure to visit the locations of many scenes from the novels, hence the Laughing Goat hat).

As always, the conversation went deep. We covered living in Boulder vs. abroad, the psychological toll that entrepreneurship takes, sources of inspiration and motivation, and living a creative life. It was a lovely reminder of focusing on what's most important: finding those moments of connection with all the other humans making their own way through the labyrinth of life.

Daniel wrote up a wonderful blog post about our chat:

I look forward to continuing it next time I'm in Boulder. In the meantime, I'll keep writing.

Interview on The Eastern Shore Podcast

Brock Winstead interviewed me for The Eastern Shore, one of my favorite podcasts that focuses on creativity, new ways of thinking, and Oakland. As a fan of the show, it was really fun to come on as a guest.

Brock actually lives a few blocks away so I walked over to his place and we recorded in his living room. We talked about the creative process, research, and personal history behind my novels. If you haven't yet checked out The Eastern Shore, I highly recommend giving it a whirl.

In Brock's words:
"Eliot Peper is the author of the Uncommon Stock trilogy, a series of thrillers set in the world of tech startups and venture capital. They tell the story of Mara Winkle and her company Mozaik, which makes financial fraud detection software. Over the course of the trilogy, Mara and her team must handle not only the challenges of growing the business, but also a deadly conspiracy that wants to murder them because of what and whom their software threatens to expose. Eliot and I talked about how he came to writing, why the startup world seemed like a good setting for thrillers, and how he navigated the business of publishing and marketing books as a first-time, unknown author -- plus a lot more."
You can listen to the full episode here:

Book Review: The Water Knife

The Water Knife by Paolo Bacigalupi is a Tarantino-worthy thrill ride through a near-future American Southwest ravaged by drought and climate change. It follows a journalist with a death wish, a desperate Texan refugee, and a professional assassin water-rights-hunter as they fight to survive and uncover the dark political machinations shaping their world. Bacigalupi won the Hugo and Nebula awards for The Windup Girl in 2008 and he comes back swinging in this disturbing tour-de-force.

Dr. Evil's Milk Run

I was thrilled when Brad Feld agreed to host this post about the lessons I learned over the course of writing my last three novels. The article focuses on cybersecurity and vulnerabilities in our public and financials institutions and is based on interviews with technologists, international money laundering investigators, and federal special agents. You can read it here:

Brad is a leading venture capital investor at Foundry Group, cofounder of Techstars, and author of the classic, Venture Deals. He was was also the first reader of the first book, published Version 1.0 and the Power Play through FG Press, and has been an enormous champion of The Uncommon Series along the way. Over the past few years he's become a true friend and his support and encouragement have been key motivators for my writing efforts.

That made working up this post particularly fun. I was shocked by what the research behind the books turned up. The organizations charged with protecting our most sensitive data are incredibly insecure. The regulators who are supposed to police them are often clueless. Flawed software architecture is often the core culprit and there doesn't appear to be enough political will to seriously address the issue.

I'm interested to hear what you think. It's an area in desperate need of creative problem solving.

7 Ways Growing Your Startup Is Like Writing A Novel

I was honored when Jon Nastor asked me to work on this story for Entrepreneur with him. He challenged me to dig deep into my experience with startups and creative writing in order to distill some lessons that founders might be able to learn from novelists.

The exercise was a lot of fun, particularly because my books are about a pair of startup founders (I know, meta). It turns out that artists and business leaders have more in common than we think.

You can find the full article here:

Jon and I met through his excellent Hack the Entrepreneur podcast. I've joined him as a guest on the show to talk about optimizing for discomfort and other life hacks, you can listen to the episode here.