I had the opportunity to attend an event with Chris Sacca last night. He is a venture capitalist who has been living part-time in Los Angeles recently. He spoke about how he grew up in the investment scene in Silicon Valley. He got his feet wet in investing when he started day trading law school student loan money. By day trading, he was able to grow his net worth to $12 million. Then the bubble burst and he lost his friends’ and family’s money, and owed $4 million himself. Given that he wanted to be in the investment scene and possibly run a publicly traded company, bankruptcy was not an option. Chris began working as a corporate lawyer in Silicon Valley and worked odd jobs at night to pay back the money he owed (which he was able to negotiate down to a little more than $2 million). When he was laid off as a lawyer, he quickly had to adapt, and realized that no one wanted to work with a young guy working out of his house. He formed the Salinger Group (I use the term “formed” loosely - he just made up the name and thought it sounded good and that people would trust the name). He successfully worked his way through a number of companies, including Google and eventually became a venture capitalist. He now runs Lowercase Capital.
Here are a few points Chris made that stood out from his interview:
- The startup scene in Los Angeles is alive and well. In fact Chris has raised a fund to invest in companies in Los Angeles.
- Chris spoke about the sense of entitlement the younger generation has. This has turned him off of seed funding, as the entrepreneurs were insisting on a very high valuation of the company and requiring an investment decision on the spot.
- Everyone needs to believe in themselves and that everyone has one thing they are good at. Chris encouraged everyone that when they are good at something, to not apologize about it, but still keep in mind that everyone can still use some help every now and then. He described his theory as “bold humility.”
- Good entrepreneurs recognized they need money, and it is an important aspect of working, but more fundamentally, good entrepreneurs keep working because they like solving problems. That is why he is still working.
- Successful leaders do not surround themselves with “yes men.” He learned this lesson when he made $12 million day trading. Everyone around him was telling him what a genius he was, and he said he actually started to believe it. Then the market corrected, and he realized that much of the success he had was due to his timing of the market.
- He buys his trademark cowboy shirts from www.vintagewesternwear.com.