Venture Trails Business Odds

Andrew Wilkinson shares his perspective on investing during economic uncertainty, comparing venture capital to poker and emphasizing the importance of playing games with better odds. He believes in focusing on traditional business investments rather than speculative venture deals.

Key Points:

• Investment Philosophy During Uncertainty:

  • Prefers to "play poker" rather than "roulette" with investments
  • Wants to know the odds and play with very good odds in his favor
  • Views venture capital as "totally random" and does it for fun "off the side of the desk"

• Current Investment Strategy:

  • Focusing on buying businesses with predictable returns
  • Looking for opportunities where businesses can pay themselves back in 2-3 years, maybe 5 years
  • Targeting 20-30% earnings yield on investments
  • Waiting for people to panic and sell good businesses at discounted prices

• Venture Capital Approach:

  • Still willing to invest if a trusted friend needs $100k for their company
  • Not focusing energy on venture deals during market uncertainty
  • Acknowledges missing some obvious winners in the past (like Slack)
  • Has had that "winning feeling" on businesses where he lost everything

• Risk Management:

  • Prefers to play games with better odds and known parameters
  • Values predictability over potential massive upside
  • Focuses on businesses that can be analyzed and understood
  • Believes in buying good businesses when everyone is panicking

• Investment Timing:

  • Currently holding cash and waiting for "winter to come"
  • Preparing to buy businesses when market conditions create opportunities
  • Looking for situations where fear creates buying opportunities