Episode of My First Million with Sam Parr and Shaan Puri.
Transcript
Note: This transcript was auto-generated from YouTube captions. It may contain errors and lacks speaker identification. A full Gemini audio transcript will replace this.
Kind: captions Language: en well i spent what uh spent the better part of yesterday trying to teach my mom and my sister how to create coinbase accounts transfer answer bit by bitcoin transfer bitcoin uh sean do you think that angel investing like is this gonna be what’s the future of sean pury i mean do you think that this is gonna be your full-time job angel investing is a way to for me it’s like just dipping a net into a stream of flowing water with a bunch of fish inside i’m not taking a boat out spending you know an afternoon out in the water fishing and trying to catch something is this in front of my house there’s this stream with fish going through and if i just put a net in i can catch some great fish that’s what angel investing is for me and that’s what it’s been basically for the last i don’t know six seven years where my own friends my own personal network or things that come inbound through getting more popular on twitter and podcast it leads you to some opportunities people want you in their deals and you get to see deals early and before i used to sit on the sideline i watched a bunch of those companies get big and then i started you know i asked a rich friend hey if i give you a good deal that you invest in can i get a piece of the carry i said yeah that’s how i got into lambda school which is already kind of like a big winner and then as soon as i did that i was like man instead of a big like instead of getting a piece of this guy’s carry why can’t i just do this myself so as i got a little more money i started doing it myself and then with the rolling fund that just lets me do it on steroids where i can just do more and so what percentage of your net worth well could let’s be you cannot answer this but let’s just say that you invest four million dollars a year in eight years how much income do you think you’re gonna do you think you’re gonna make an additional two hundred dollars do you think you’re gonna make 200 grand a year do you think you’re gonna make it so do the millions so a a good fund is gonna like let’s say 3x it’s money over the kind of like seven to ten year period uh great will be you know five x or more and like if you’re if you count if you caught an uber if you caught a coin base uh you know you’re laughing your your returns are gonna be super skewed just by this one company that’s now worth tens of billions but let’s assume for this conversation let’s assume you’re only using so let’s say you’re the first um let’s take let’s take three x let’s take the most cons like the most conservative version of winning right is i triple the money so over the next three years i’m gonna deploy 12 million dollars let’s say i three x that money that’s 36 million dollars um that gets that comes back into the fund after returning the money so uh so a total of 148 million dollars and so on the 36 that’s the profit i get to keep 20 of the carry right so that’s about 7 million ish is my mental math right um you know roughly seven roughly seven million dollars and that’s seven million dollars over a let’s call it eight eight to ten year time span it’s not the biggest like that’s that’s why i don’t go all in on it is because i can make way more money building a business in that same amount of time so if i well in seven so but that’s there’s a recap that’s your mind how much in you say seven million that’s my fault yeah that’s a significant amount of money that’s a million dollars a year so you’re thinking this will make you a million dollars a year for seven years starting in seven years no i think it’s like kind of like a lump sum that you get in seven years more like it i get nothing for for seven years and then as these companies as the as many of them die and some of them do okay then a few winners emerge eventually you reach a steady state where you keep going and you are making a millionaire yeah really what’s interesting is where you scale and you start doing you know 20 million or 50 million a year 100 million a year uh and you know eventually that’s why you could see yourself hiring investment professionals you could have a whole fund has any years paid out ryan yeah yeah but i i but i think there’s another important point is it’s not just about money it’s about well-being as i’m always saying on the show like it’s about like what investing has done for me is it’s been a vehicle for learning and for connecting to really interesting people and for like getting to like kind of like go on these fun adventures where i’m like learning about like the latest things in crypto or the latest things in e-commerce and i’m connecting dots and then the other thing it’s done is it’s made my my primary businesses far more successful because i’m borrowing ideas i’m learning like oh wow look how this e-commerce company does performance marketing i’ve never even heard of performance marketing until and then i brought it back to a newsletter company and i’m like oh at our newsletter company we can buy facebook ads and google ads like this ecom company that i invested in called warby parker or whatever and like i’m now i’m like cross you know i’m taking you know kind of like what your show has done a really nice job but does it no does it distract you from your main job well that’s that’s where like that’s why i think it was smart that this guy hired some people and how you know sean’s hiring some people because then then you can kind of like be as you said in two places at once but no that’s you just have to you just have to take the risk of hiring a hundred and fifty thousand two hundred thousand dollars well you’re not you don’t have to i mean i i haven’t done that and i’ve still made a bunch of investors but but i missed a lot of investments because of that very reason because i was like hey i’m really laser focused on biz now and summit and powder mountain i’m not going to look at a deal every day i’m going to look at like a deal every like three weeks and so i’m just gonna miss a lot of stuff you know i missed like i mean i i have a one of my the ceo of my company invested 150 grand in a um in a in a crypto hedge fund and he’s you know he’s up to like almost six million dollars of value i don’t know if i should be saying that here but you know he i missed that because i was just like i’m busy i can’t look at that right now yeah that’s totally true and by the way most of the time when people say like oh it’s not about the money it’s about the journey it’s about the learning it’s about the people you meet you know the kumbaya thing normally that’s like you know that’s the tell it’s actually almost always about the money because if you took the money out they wouldn’t do any of the [ ] this is actually one of the rare things where that’s actually true because i actually was doing all these things i was meeting founders i was helping them with their businesses i was getting excited and digging into new spaces i was keeping a fantasy portfolio of like to learn like oh i’m tracking these spaces and i think these are going to be big and i want to learn about these spaces and here’s some of the companies that are doing cool things and let me observe their growth tactics from the outside and try to see what’s working and maybe apply that to my business i was literally doing all those things for fun before i ever put a dollar in uh you know i was subscribed to like i don’t know 50 different um angelus syndicates because you didn’t have to put money in but you could get the investment memo because i literally loved the learning so much and i had no plan at the time to be investing in any of those i put zero dollars in sorry to all those syndicate leads you know i was that annoying guy that was subscribed and never invested but it was because i actually genuinely actually wanted to learn and i wanted to meet these founders and so this is one of the rare occasions where when you hear that normally it’s [ ] in this case i’m 100 on board which is everyone and like that’s how i that’s exactly how i think about it is this is like a my other friend described it as like it it’s a great way to just blow off some entrepreneurial steam it’s like you your brain if you’re operating a business you all of a sudden start hearing about vertical farming and crypto and then like you know oh what the hell is you know what the hell are nfts and like you learn about all this [ ] and then part of you is like should i be doing that like what the [ ] am i doing this stupid like real estate newsletter i should be going out there building you know this ride-sharing company or whatever and so investing gives you a way to like get the high and dabble in that and have some financial upside but you don’t it lets you stay focused as an entrepreneur so that’s the other like like weird psychological things that comes from investing is aside from the learning aside from the good friends you make and the network you build and the learn you know the cross ideas you get you literally just get to like it’s like a release and uh and then you can go back to doing your thing do you but but are you sean are you the reason i i did the syndicate thing i’m doing it with joe and we’re i i bet my own money it’s it’s kind of like a rolling fine but it’s not uh it’s only deal by deal basis whereas sean you have like money that you could deploy a little more freely i didn’t do the rolling fun thing because i didn’t want to have customers that i have to uh appease and talk to on a regular basis because i didn’t want like a job do you feel know now that you have like a job because you have a hundred people who have given you yeah no i write a once a month update uh and i like doing it anyways it’s just hey here’s the new companies we invested in why i would do that for my own documentation anyways what was the conviction at the time i made the investment here’s what i believe here’s why i believe investing in it i like having that anyways for five years from now that’s an important thing for me so in this case i just publish it to my investors great um so that’s the that’s all the maintenance that goes into it there was a little bit again early on of like actually getting the investors on board but i took no meetings i took no phone calls i just said here’s the link and because of this podcast because of my newsletter because of my own track record and the deck i made that was enough to raise the money for me and i know that that’s kind of like a not everybody can do that part most people would have to go knock on a bunch of doors and really sell this thing um so that’s that but the other thing you mentioned like for you if you just get busy and you just don’t care about angel investing you could just not do a deal for the next six months and no sweat whereas for me i actually do need to deploy this money and so there is like a certain amount of like startup pitches i need to take every month in order to be doing great investments um and so you know i actually have to deploy this money i can’t like just sit on my hands and decide i want to go go on vacation or like just go super heads down in my own business i can’t like i can’t do that because i’ve taken on a fiduciary like obligation to deploy these people’s cash right what what i thought would be man i used to invest i don’t know like 50k a quarter 100k a quarter max and now i have to deploy a million dollars a quarter and actually i run out within the first two months of every quarter so so it’s actually not been an issue because i just my check sizes are bigger and once people know you’re investing they send you deals your friends send you deals they’re like hey i’m doing this this is a good deal and they’re like oh wow i didn’t need to like the fundamentals make sense and all is all the good there’s other good co-investors there i didn’t need to go find this deal it came to me and that’s that’s the best best thing that happens what percentage of what percentage of your liquid net worth did you allocate to before this because now with the rolling fund i’m investing rpm right other people’s money i only put a small amount of my own money for the fund before this i was doing roughly 200k 250k a year was what i put in and i don’t remember what that was at that time of like liquid net worth it was like kind of substantial like it was it wasn’t wasn’t i don’t know half a percent or something it was like like that mattered to me but also if i lost that money or like i knew going in at the very least this money is locked up for a long time i can’t use it to go buy a vacation over or under 15 over under 15 or 10 percent like was it more than like 10 because that’s a lot i don’t know i’d have to think what what i don’t know how much money i made at the time because i made more money in the last couple years than i did back then so i don’t know actually how much money i had then what i do remember is thinking when i very first started i thought i need about 300 000 of a bankroll to even do this to have enough of a portfolio to give myself a shot because angel investing so many of your deals are going to be losers and so i thought okay i need to have you know 20 to 30 bets i need at least 300 to 500 000 of bankroll to go do this and at that at the very beginning i didn’t have that that would have been an irresponsible amount of money for me that was like at the time i don’t know half of the money i had or something like that so i said okay i can’t do that that’s why i started talking to other people and being like hey if i scout for you can i get kerry and you put up the capital and that’s how i got started [Music] i really like this as opposed to buying public equities when you have very little money because of the learning and the connections and like the benefit that that could have on your own business like i was betting a very high percentage of my money initially and it really helped me because i rather than just buying like coca-cola or walmart or some publicly traded company where i learn nothing i meet no one you know i it doesn’t really help like the day-to-day of my like newsletter business or my community business or you know the the real estate business if these things were basically benefiting my ability to make money on my day job so that’s why i i actually think when you’re small it’s actually not a terrible idea and in fact a high point i’ve read a tim ferriss thing a while back he wrote a long time ago before before he started investing and he was basically like i’m just going to fund my own mba like if i was going to spend 200k yeah business school i think i can learn more investing that 200k in a mix of you know public stocks and private you know startups and when i read that i was like oh absolutely like i will build a network i will build business knowledge i’ll have skin in the game and actually this might become a profitable thing you know but the worst case scenario this was my rather than going to you know wichita state and like going get my mba like why would i not do this so once i read that that’s how i started thinking about it was like i’m going to put 120k in that’s like that’s business school and let me let me just get going well so we we not only thought about that with investing but we we lost 25 000 on the first summit we held various private summits in between summits where we would lose 20 grand here 10 grand there to throw like an event and i always saw that as an investment like you’re saying like in like my network or my learning and the same thing i was talking to a guy the other day about he wanted some coaching and he was like debating whether i was worth like the monthly amount and he had like 400 grand in his savings and i was like well what do you want to do what else do you want to do with the 400 grand he wanted to put it into like robin hood and buy stock and i was thinking like man if i had known about coaching or consulting or some of the things i now know about you know like trainings that you could go get online you’re taking like a writing course from like you know purell online like those things are so valuable like they’re so worth the like three grand here the five grand there that if you have you know a little bit of money saved i think that’s so much better than trying to make like you know the index return on the stock market when at least when you don’t have that much money i i think um somebody said to me you know concentrate to get rich diversify to stay rich like when you don’t have much money like put your money into building yourself up building up your learning building up your network and then later when you’re when you’re much richer then diversify and have a you know an allocation and a portfolio like that i feel like i can rule the world i know i could be what i want to i put my law in it like no days off on the road let’s travel never looking back