Moonshot thinking means shooting for 10 times bigger instead of just 10% better, to create a perspective shift that enables entrepreneurs to push their teams and embrace creativity and weirdness in order to achieve greater success, however, it is not a smartness contest with competitors.
Venture Capital investments aim for 10 times or 20 times the initial investment, whereas Buyout investments aim for a 90% success rate of their investments.
The last 12 to 18 months saw more market distortion than any time since post-World War Two, which can lead to ignoring valuable lessons and moving out on the risk curve. Founders and their teams need to be aware of these distortions and learn from experienced individuals to avoid negative signals.
The logical choice for entrepreneurs is to invest in a business that generates cashflow and provides a good lifestyle from the start rather than going for a venture path that is risky and often results in zero returns. However, many entrepreneurs choose the latter because of their ego or interest in solving a problem.
Investing in companies require patient capital and philosophical alignment with the management team. Constraining factors can foster creativity and productivity.
The speaker reflects on the evolution of angel investing and offers some advice for individuals looking to make a start in this field.