The key to benefiting from investing in startup companies is to leave enough room for scale, meaning investing in companies at low prices that have the potential to grow exponentially in the future. By doing so, investors have a chance to get rich even if only a few of their bets pan out.
The speaker discusses the potential income from investments made in a good fund, with a conservative estimate of tripling the initial investment over a seven to 10 year period, resulting in a profit of $36 million and a 20% carry fee.
The growth of marketplace lending in the FinTech industry attracted institutional money managers, mutual funds, and professional investors, making it a lucrative side hustle. One South Korean bank even invested in the funds.
In this conversation, the speakers debate the buy and hold forever investment strategy versus the practice of constantly buying and selling equities. They also question the logic of individual investors thinking they can outperform professionals in the field.
Flashy CEOs with luxurious lifestyles and no exited business can raise alarm bells for investors in a growth stage company, leading to a lack of diligence and over-reliance on wealth.