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Reducing the Risk of Investing in Start-ups

I've written several times about how risky angel investing in start-ups and early stage businesses can be. Having personally invested in about 20 such businesses over the past 10 years, I have probably had to write off at least half of them within the first couple of years - but that doesn't mean they have disappeared completely. Just that my shares are no longer worth anything. That annoys me not just because they cost me money, but because the assets I helped to create may now be earning money for someone else. It may even be illegal and I am letting them get away with it. Let me explain. When you buy shares in a company, depending on the class of shares you buy, you are probably entitled to a share of the profits it makes when the board issues what's known as a dividend. Otherwise the profit is retained in the business to be reinvested in growth. In due course, someone may offer to buy your shares for more money than you originally paid. So there are basically two ways o
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The Darkest Days: Israel Gaza 6-months on... my reaction

Last night I watched a one hour BBC documentary introduced by Lyse Doucet called The Darkest Days . It was aired exactly 6 months after Hamas murdered over 1,200 Israelis. The documentary was in 2 parts. Footage and interviews in Israel following the attack, then a similar amount of footage describing (in gory detail) the carnage that followed, and continues to this day, in Gaza. I was in tears.  Watching anyone in pain, whether from physical injury or grief, is difficult at the best of times. But watching children and parents suffering - that's really hard to take. After watching it, I asked myself two questions. How could presumably sane people like the Hamas gunmen (of which there were hundreds or more involved) possibly commit those horrors? And what would I have done in retaliation - especially with regard to freeing the hostages?  It's really hard for someone like me, an atheist grandfather, living comfortably in a relatively peaceful society to put myself in the shoes of

The Valley of Death. Why most angel investments lose money.

I have been investing in start-up companies (businesses with little or no trading history) for around 20 years. Unfortunately, despite knowing a great deal about starting and selling businesses, at least half of the ones I pick eventually fail and lose me all the money I invested in them... although some of it might be recoverable as tax relief. So over the years, I've come to realise that the odds are heavily stacked against me backing a winner - typically defined as a sale of my shares, known as an exit , within 10 years, paying me at least 10 times the money I invested. To get the same result from guaranteed compound interest over 10 years, you would have to be paid a rate of about 25% - so get it right, and it's a big prize. I've managed it a couple of times, so overall have recovered most of what I've lost on the many companies who died, but it's a very high risk game. So why do so many angel investments in particular die, and why is it so hard for us to spot t

Prediction for peace in Ukraine

I started writing this on New Year's Eve 2023/24. The war in Ukraine has been grinding on for nearly two years. In the past couple of days, Russia has increased its intensity of rocket attacks across the whole of Ukraine. Many of those missiles are being intercepted and as far as I can tell, not much is being damaged. Russia's hope is presumably that these attacks will sap the morale of the state as well as absorb what's left of their US supplied anti-missile resources. At some point, Ukraine's stockpiles of war materials and trained military will be depleted compared to Russia's vastly superior stockpile including more than 2,000 warplanes they have been loathe to use until Ukraine's defences are weaker, and Russia will eventually push west when it controls the skies. We can't allow that to happen for two reasons: Where will they stop, and the further west they advance, the less the citizens in the territories they occupy will be prepared to accept Russian

The TABi Story

In 1991 I created the original TABi prototype while working for BMW. Previously I used a day diary to keep notes, thereby having a timeline to assist note retrieval. When my calendar went digital, my notes became sequential, requiring me to recall whether each note I saw was made before or after the one I was searching for. There had to be a better way to find my notes. What was needed was a clue as to what was written on each page. A tab for every page. But ordinary tabs along one edge only gave me a few tabbed pages. I needed to invent a way to have tabs along more edges. So I tried running tabs along the top, the side and the bottom edges. Still not enough tabs. Then I hit on the idea of tiers, effectively multiplying the number of tabs by two or even three. TABi was born and I constructed the prototype you see above. I used it for some time, and liked it, but instead of developing it as a product, I reasoned that all notes would eventually go digital, so abandoned the idea and buil

What about the workers? Them or us?

This morning I met Tony. He works for a company who unblock drains, so quite a messy job, but curiously satisfying when the blockage is removed. Anyway, he was a very chatty chap and while he was flushing out years of accumulated unmentionables from our pipes, he told me about a previous job he had working for a rail company. The story went that he had been made redundant and his wife passed on an ad to become a train guard. He thought 'why not?', so signed up and loved the job. One day, following a challenging train delay that he needed to delicately manage, he got a knock on his door to be confronted by a passenger. "How can I help you sir?" he asked. "I thought I'd let you know how well you dealt with that situation", the chap replied. "Well done!". Turned out he was the chairman of the rail company. A day or two later, Tony was called into his bosses office and told that he had been recommended to become a guard trainer. Promotion and more