Reflections on Life, 50 Years in Venture Capital, and Never Driving Alone
No Red Lights by Alan Patricof is a memoir of a legendary investor's career in venture capital. It offers insights into the fast-paced world of tech startups, along with lessons on seizing opportunities and taking risks.
The year was 1955, and the author, Alan Patricof, had just graduated college. In the sweltering July heat, he walked the streets of lower Manhattan searching for a job.
He started at the bottom of the block, at 110 Wall Street. In every building he entered, he rode the elevator to the top and stopped in every office until he reached the bottom. It took him nearly three months until this resulted in something promising: a securities analyst trainee position at a firm that Alan had previously never heard of.
That firm was Naess & Thomas, and it belonged to a famous Norwegian economist named Ragnar Naess. In Naess, Patricof had found a top-notch mentor, someone who could teach him the most essential part of any business career: the fundamentals.
The fundamentals are going to be different depending on the particular type of business you’re in, but let’s take venture capital as an example.
In the investing business, net free cash flow is perhaps the most important foundational principle. It refers to the amount of cash a company has available for stockholders after taking expenses into account.
Why is that important? Well, investors can’t support a company forever. Eventually, it needs to turn a profit independently. And if you, as an investor, discover that there’s really no demand for the company’s product – if the net free cash flow isn’t high enough – you’ll need to drop it.
As you gain experience in your industry, you’ll probably end up developing your own list of fundamental principles that inform everything you do. Alan himself has his own framework of four key fundamentals that a company must satisfy before he’ll invest in it. Those four are: a large enough market, a product that clearly addresses a need, sound economics, and a competent management team. Thanks to Alan’s focus on these fundamentals, his companies have successfully turned a profit from investments in countless well-known companies, like Office Depot, Venmo, and HuffPost.
A focus on fundamentals will keep you grounded in the often heady world of business and make it more likely that your company will stand the test of time. Of course, even with a rock-solid core of fundamentals, success isn’t necessarily guaranteed, as you’ll see next.
No Red Lights (2022) is part-autobiography, part-guidebook to assembling the core fundamentals of your career. Geared primarily toward aspiring venture capitalists but helpful for anyone interested in business, it’s packed with instructive lessons and useful advice. Simultaneously, it is a glimpse into the life of man who’s spent 50 years learning – and living – the tricks of the trade.
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Blink 3 von 12 - Eine kurze Geschichte der Menschheit
von Yuval Noah Harari
