Those of us who have been involved with The Itinerant for the last few months may have been wondering “how does private markets investing fit in to a section about side-hustling and the future of work?”. Well, I’m so glad you asked.
C-level executives have for a while had access to investing in private fund vehicles as well as in direct equity in startups. They sit on boards and act as expert advisors of companies they’ve invested in, and in doing so build and deepen their relationships and expertise. It becomes a virtuous cycle of deepening expertise, relationships and career opportunities, and investment opportunities – each opportunity reinforcing other future ones.
Furthermore, many executives upon hanging up their c-level titles and riding into (semi)retirement, look to stay active, leveraging the relationships they’ve built over years, the capital they’ve earned, and the experience they’ve gained, to start quasi boutique investment houses / family offices. Its not a new concept, its quite a tried-and-true path known by wealth managers and wealthy executives (for example, JC2 Ventures. What is different, is how more and more individuals are recognizing the potential to do so mid-career, to not leave value on the table that they’re developing: startup founders building angel portfolios and launching rolling-funds to invest in the most promising founders they come into contact with through their day-jobs, crowdfunding platforms democratizing access to private-market deals, allowing individuals to put their personal expertise and networks to use to help build businesses in a way previously only afforded to Ultra-HNWIs, etc.
More directly aligning your investment activity with your career goals allows you to do several things: (1) to monetize the value you bring to the table and are often giving away for free or not capitalizing on, (2) potentially position yourself for your next – or a distant future – career opportunity by investing in a company you could see yourself working for.
With that in mind, let me leave you with two recent anecdotal encounters I’ve had:
Vice President, Fortune 500 – Several weeks ago I was talking with a friend and colleague of mine who happens to be a Vice President. We were catching-up about the goings-on in life, he knew of my private investing activity through 2c9 Ventures, and mentioned that he recently had the chance to invest in a local startup. His investment was substantial enough that he now sits on the board. Nothing surprising here. What was interesting was his perspective about how much value and personal learnings he gains from his experience sitting on the company’s board. In making this investment, is he receiving an equity stake in the company’s potential future upside, but he’s also invested in access to new education and relationships with other peer board members. Just from being involved in the quarterly board meetings, and wrestling with the questions management faces, he’s been able to learn a tremendous amount which he’s brought back to his day job. Now not everyone is a VP at a Fortune 500 company and therefore has the disposable income to make an investment sizable enough to merit position on the board of a startup. But that doesn’t preclude you from taking the same fundamental steps of aligning how you allocate your capital with your professional development and career goals. In this second anecdote, we’ll see how another investor landed himself a job.
Senior Leader, $50M Startup – I was having another conversation this past week with a senior leader of a $50M startup and he casually mentioned – as part of his sales pitch – that he believed in the idea so much that he invested in their seed round, before he ever worked for them. He had a prior successful exit and was working for a large corporate when he decided to invest in a seed round of this startup. He eventually went on to take a leadership role with the company, leveraging the early investment he had made.
Much of this is all still a hypothesis on my part – one that I am bearing out and testing personally through 2c9 Ventures. I could certainly be wrong in my reading of the tea leaves, but if any of this resonates with you, I’d encourage you to reach out to me directly to see about getting more involved with 2c9 Ventures’ Investor Group.
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