“Oh my God! This thing is going to the moon and I’m not in it?”
Reid Hoffman cofounder of LinkedIn
In the September 2018 Wall Street Journal article, “LinkedIn Co-Founder Reid Hoffman Talks About His Best and Worst Bets,” Chris Kornelis interviews Reid Hoffman who says that it is the missed opportunities, not losses, that he regrets.
His best bet, according to the article was joining the board of Confinity, the company that launched PayPal and revolutionized online payments. “It’s what led me to being able to do angel investing and what led me to essentially finance the first money in LinkedIn,” Reid said.
Hoffman’s investment strategy is long-term and hands on. He recommends that if you choose an investment based on talent, “that talent has to be so strong that you want to be working with them for a decade.”
Short-Term Investment Rewards
Although investing in real estate projects is a bit of a different beast than technology investing, it still offers rewards that include profit for your risk, and it may launch you into new directions, careers, and interests. As a private lender, you would expect a much more secure and short-term investment experience. Your investment in the form of a loan to a borrower interested in remodeling and reselling real estate would be secured by the real estate, and the project would be completed in a few months or a year. Of course, the profit is also less likely to go “to the moon” and would be more modest.
Ability, Schedule, Community
There are still judgments you would need to make that are like the ones Mr. Hoffman had to make. While Hoffman looked at market position, team, and momentum when he made his investment decisions, relying heavily on his feeling about the team, you as a lender for a real estate remodeling project would rely most heavily on the value of the property, the borrower’s ability to clearly communicate their ability and their schedule, and the desirability of the community that surrounds the project.
If you have money that is idle, you might want to put it to good use building not only a project, but perhaps your career, someone else’s career, or maybe even a revolution.
Read the full article by Chris Kornelis for more inspiration for your investing and lending goals.
Kornelis, C. 2018. LinkedIn Co-founder Reid Hoffman Talks about His Best and His Worst Bets. Available at https://www.wsj.com/articles/linkedin-co-founder-reid-hoffman-talks-about-his-best-and-worst-bets-1536545341. Accessed November 2018.
