I came in, made an investment, brought in the ability to help them raise some capital, helped them with marketing, and helped them get into more distribution. For example, there was a company doing about $5 million a year, and their stock was under a dollar a share. I put the marketing campaign in that created the buzz to take it to $18 a share.ĭo you focus investments that are primarily centralized around marketing, to deliver the capital necessary to get that quick return that you’re looking for? To make a long story short, that 150 turned into millions of dollars for me, and it happened in a year, because I took a one-year restriction on the stock. By the time the year ended, the stock was down to $4. I still had the million shares, and it was still worth $8 million on $150,000 investment, but that started a negative path. The chairman of the company sold a million shares at nine months, so the stock went from $18 to $8. In this particular case, in nine months, the stock was $18 a share. Now in one year, that stock could be worthless, and I’ve lost the 150. The stock was trading at a dollar a share. In return, I got a million restricted shares of stock in the company. I gave a public company a marketing campaign that cost me $150,000. I’m going to bring the marketing dollars to the table. An entrepreneur will have a business or a product, and they need marketing dollars. If I’m dealing in the world of product development, I call what I do, in some ways, venture marketing, instead of venture capital. How do you know if an investment is going to be able to return within the period of time that you’re looking for? Then I’m playing with my own money on an ongoing basis, instead of wondering, are any of these assets going to be fruitful? I just like to be able to follow it and track it so that within a couple of years’ time, I know where I am with that investment. I’m prepared to either see it lost or returned back with a big return within those two years. I want to be able to see my money, follow my money, and have it coming back to me, with its return, within a two-year period of time. If somebody comes to me and says, “Look, I need $200,000 today,” or “I need $500,000 today, and in 10 years, you’ll get your money back,” that’s not for me.
I’ll do pre-rev, I’ll do start-ups, but I don’t like things that are going to take more than a couple of years to return the dollars. What is the earliest stage that you would invest in a company?
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The other is jumping in after it’s already tested successfully and providing roll-out capital. One is the total risk side of taking something from the beginning and launching it. You’ve got to know when to hold them, know when to fold them in some of those deals. Oil has been devastating for me over the years. I’ve gotten killed in minerals and futures and things like that. I’ve gotten killed in the options side of the business. You’ve got to be able to write 4 $200,000 checks and have 3 of them gone completely, and have that fourth one bring you back $5 million.
It’s a much riskier kind of an investment. The risk is you put up $200K and you can lose it all on 3 out of 4 deals. Having said that, if every deal was like that, obviously those would be the only investments you’d have to make. You get spoiled as an investor when you put up $200,000 and you get back $5 million. It could do a hundred million dollars and bring back, for a $200,000 investment, $50 million in sales with a $5 million profit. I found that I could invest in somebody’s product, and a product could do tens of millions of dollars. I made my profits selling products on television. They’d say, “Hey, I need money to finish my idea so I can go sell it.” In the early days, I didn’t have all the capital that they would need, so we would either go raise money or bootstrap it to get products to the marketplace. Inventors would come to me and they’d have an idea. I started 30 years ago in the world of As Seen on TV, in the infomercial space. It seems like that’s where I tend to do very poorly or not as well. The biggest challenge that I’ve had is when I get into areas that I’m not skilled in or don’t have experience in. What is your overall investment philosophy and how does it differentiate you from others.Īs an investor, I generally try to stick within the industries and the types of deals that have worked for me in the past.
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