Hustle Pass Investment Declined

A story about why Shaan Puri passed on investing in The Hustle despite believing it would be successful.

"When Sam started The Hustle, I had an opportunity to invest because Sam was a friend. I went to The Hustle's office, which was this tiny rinky-dink place. They sat me down, walked me through the vision, and I thought to myself 'this is totally gonna work and I totally don't want to invest.'

My thinking was I don't think this type of business will generate the type of returns I'm looking for. Angel investing works best when you put small checks into many companies and you're not looking for the median return, but the maximum return. You basically need 2 or 3 winners in your portfolio to make everything else a rounding error.

That means you need every company you invest in to be able to get to about $100 million a year in revenue - a billion dollar company. This isn't about greed, it's about the risk and reward profile. The risk is so high that you need winners to pay off so well to justify the risk you're taking. You're taking both risk and illiquidity - a startup you invest in probably won't be liquid for 7 to 10 years. If you have an illiquid investment that's extremely high risk, you need the payoff to be huge to make up for those two downsides."