Small Ball

Small Ball is a style of play in basketball when a team sacrifices size/height for speed and shooting. The Golden State Warriors, the best team in the NBA this regular season, are a good example of a team that often uses this strategy.

As the venture capital business and entrepreneurs are increasingly bulking up in terms of fund sizes (VCs) and round sizes (entrepreneurs), I am decidedly a fan of small ball.

Many of our best investments at USV have been in companies that never needed to raise VC or only needed to raise one round. In these situations, the founders own/owned large stakes in their companies, often north of 50% for the founding team at exit. These companies focused on a revenue/business model at launch, they kept their headcounts low until they had scale/traction in their usage, and they reinvested the profits back into scaling the business instead of external capital. My favorite example of this is Indeed where USV had to beg the founders to let us invest, only did one round of venture capital, and exited for $1.4bn and is likely worth 2-3x that number as the business has scaled massively post exit. Kickstarter, DuckDuckGo, and Zynga are other good examples of small ball in action. Zynga did raise a lot of money but it went to the balance sheet and secondaries and never was used to fund losses.

Small ball also works well in VC. It is hard to return capital to your investors in the VC business. Exits are a long time in coming and you get diluted over time and even in the biggest exits (billion dollar plus valuations), you might only have proceeds of $100mm to $200mm. If you have a fund size in the $500mm to $1bn range (or larger!), you need many of these big exits to return the fund once. But your LPs want you to return the fund three times, or more. I could never sleep at night if USV were managing a billion dollar fund. I don’t know how we would ever get our LPs back their money plus a return. I know it can be done and has been done. But I don’t really know how it happens. Getting big exits is just so damn hard.

So in an era when VCs and entrepreneurs are going for bulk, I really like the opposite approach which favors speed and agility over pounding it inside. It allows me to sleep at night, which is not that easy in our business.

#entrepreneurship#VC & Technology

Comments (Archived):

  1. jason wright

    so why would an LP go with one of these bulked up billion dollar funds?

    1. fredwilson

      why do people do things that don’t make sense? shoot heroin in their veins, vote for donald trump, drive a motorcycle on a rain slick highway at 100mph, play the lottery? i don’t know.

      1. jason wright

        epitaph: “well, it seemed like a good idea at the time”so i’m now revising my view of LPs. they’re may be not quite as smart as i had always assumed, and that raising a fund is not as difficult as i had always assumed.thanks.

        1. Matt Zagaja

          I don’t think intelligence translates into persuadability one way or another.

        2. Girish Mehta

          This insider’s view of institutional investors (not necessarily only into venture) might be of interest. See the section – ‘so why do most institutions invest this way’…

          1. pointsnfigures

            The big billion/multibillion dollar funds didn’t start that way. They grew. There is a game played by LPs too-they want to/need to be with the hot fund. Once they get into a fund that has good return, they stay with it and increase their allocation as the fund grows to keep competitors out.What’s interesting to me is that USV, Foundry and other funds intentionally stay the size they are. They could probably raise much bigger funds-but that brings different pressure and different infrastructure. To an LP, it’s a signal that they aren’t motivated by management fees. To an entrepreneur, it’s a signal of where they want to write their first check and how much support they will get after receiving it.

          2. JLM

            .Institutional investors make percentage allocations to investment segments (equities, fixed income, etc.) including “other weird stuff” which used to be real estate, venture capital, private equity, and fish farms.Real estate got big and it got thrown out of the mix and became equity real estate and debt (mortgages).When a pension fund, as an example, continues to grow because the future pensioneers are shoving money in that direction, the percentage allocation model simply pools more money in “other weird stuff.”Institutions need to get money out the door and they tend to favor bigger and bigger investments within their allocation model.I remember once being told “We love your deal but it’s too small. How about we do it and you bring us 2-5 more deals in the next year, so we can meet our minimum investment target?”A lot of money flowing is just about the allocation model and when the fund grows, the numerical allocation to “other weird stuff” does also.JLMwww.themusingsofthebigredca…

          3. pointsnfigures

            Right. Pension funds etc have costs. It costs them the same to write a check to a $1B deal or a $20M deal-and they immediately tell the smaller deal that they are out even if it’s a better deal. Operationally, they can’t afford it.

          4. LE

            I am curious if that has to do with the impact on the time of the partners. In other words writing 1 large check vs. (using your numbers) 50 small checks means vastly more phone calls, more spreadsheets, more visits, more oversight. I guess that’s the obvious reason? Time. (You don’t want to be off skiing and have to take a bunch of calls or have meetings..)That said I have always been a believer in diversifying the things that I do because you never know if the large things will tank and you will be left with nothing to occupy your time or no ideas you can execute. As such I constantly put time into things that pay very little compared to the main things that I might do. Just to keep my hand in the pot and have a plan b. This is what I might call my R&D time. Or 20% time (in google speak). Some of the things I did way back along these lines payed off at a later time. That said that’s just my philosophy not betting the entire ranch on one thing no matter how attractive it appears at the time.

          5. creative group

            LE:A quote:What are your views on diversification?”I have two views on diversification. If you are a professional and have confidence, then I would advocate lots of concentration. For everyone else, if it’s not your game, participate in total diversification. The economy will do fine over time. Make sure you don’t buy at the wrong price or the wrong time. That’s what most people should do, buy a cheap index fund and slowly dollar cost average into it. If you try to be just a little bit smart, spending an hour a week investing, you’re liable to be really dumb.-Warren Buffet

          6. sigmaalgebra

            They read some Markowitz and Sharpe (IIRC they both won prizes), i.e., modern portfolio theory, or at least have to tell others they did.So, if for positive integer n, have n investment opportunities and desired expected return on investment (ROI) in, say, one year, then how to invest, that is, allocate the available funds, to the n opportunities to minimize risk, that is, standard deviation of ROI in one year. For this, assume that have for the n investment opportunities the n x n square matrix of n variances and n(n-1)/2 covariances, Then have a problem of minimizing a convex function subject to some linear constraints. This is a fancy case of diversification and handles the simple case as a special case. Markowitz did that. Sharpe generalized to what the market would look like if everyone did that.One reason to look at sectors instead of individual stocks, etc. is that n is smaller and have better data for the entries.D. Luenberger, at Stanford, has a book on investing with more. Luenberger is one heck of a good mathematician, so his book on investing must have been to raise money for his daughter’s wedding or some such?Also, for the deep end of such things, now the classic Blumenthal and Getoor, Markov Processes and Potential Theory is available from Dover. A fun book if have the prerequisites, but even among math profs only a tiny fraction do.

          7. Chimpwithcans

            Fish farms?! hahaha

          8. LE

            What’s interesting to me is that USV, Foundry and other funds intentionally stay the size they are. They could probably raise much bigger funds-but that brings different pressure and different infrastructure.Fred did a post once regarding Flatiron and the size that it grew to. I don’t remember the fund size but the takeaway had to do with number of employees and things that had to be managed that caused it to not perform to his liking and to decide to not get to that size again (ptsd). So the “intentionally” is the result of past negative experience. (This is what I remember it was a few years ago and I have no easy way to pull up the post).

        3. EJD

          This isn’t necessarily by choice. To continue with the hoops metaphor, just as most NBA teams don’t have the personnel to play small ball consistently, most institutional LPs can’t get large enough allocations to small, high quality VC funds. Absent versatile bigs like Draymond and Bosh (back when Lebron was on Miami) it doesn’t make a ton of sense for most NBA teams to play small – San Antonio isn’t going to park Aldridge on the bench just to go small. Similarly, all else being equal, VC firms with modest fund sizes are certainly preferable to larger funds if one can get a meaningful allocation. This is harder (though not impossible) to do for large institutions, and they’re probably better off not forcing the issue with subpar smaller funds.

      2. Jess Bachman

        I bet you do know, but don’t agree. If you really don’t know why people vote Trump, you can’t defeat him. If you don’t know why people shoot heroin, you can’t effectively combat it.

      3. JLM

        .If I had that victimhood gene, I would be pissing on your leg about the throw away Trump comment but I am thick skinned.I am also making a prediction right here, right now: “PRESIDENT Donald J Trump” will work its way into your vocabulary in early November of this year.Me personally? I am ALL IN for the guy.I love his flaws which I think creates the energy which drives his persistence and ability to take on and take down all comers. He is an animal. He is a disruptor. He is a doer. He is a man. He has balls. He is a patriot.In a world which needs some real disruption, Donald J Trump will provide the disruptive force which will call stuff by its real name — Radical Islamic Terrorism, as an example — and do something about it in real time.And, yes, the Mexicans will pay for the WALL.I love watching the whiny, prissy, weak kneed, entitled, pissy little bitch GOPe (establishment) pretend they are in it for the will of the voters. I love watching the Bush’s, the Romneys (and their loser supporters) squirm.More, I love Trump exposing the Bosses and how they really want to pick their party nominee. It is corrupt to the core. He skinned it back and let it stink. Beat them at their own game.I am so sick of people whose sense of entitlement drives their view of the world. Fuck all of them. Our country — the only credible force for good on the planet — is way too important for civilization to be what Obama has made it.One can take luxurious comfort in that the alternative — a woman who could not locate the truth if she were locked in a closet with it with the light on — makes it a very easy decision.Please pass the sniper fire, will you?I will be going long popcorn futures because this is going to be a lot of fun. Watching that unstoppable force, Donald J Trump, calling bullshit on the establishment and disrupting the Hell out of the self-centered toadies who populate the Congress. And the world. Taking on the bully boys, Russia and China and terrorism, who have been buoyed by a President and an administration who don’t have a pair of cojones amongst them.America gave the Republicans the Senate and the House and they spent all their time lip loving Obama’s back side. God, we need term limits. What did we do to deserve 40 years of Mitch the Bitch McConnell and John McCain the lowest IQ to ever get an Annapolis degree?So, yeah, Trump is The Man. I voted for him. I support him. I will be giving him money.Why?Cause I love my country. I served my country. I want America to be GREAT AGAIN.JLMwww.themusingsofthebigredca…

        1. Jess Bachman

          As someone who is excited by necessary destruction, I have little problem with a Trump presidency.But man… people who voted for him are going to be soooooo disappointed after a few years when they realize that nothing was accomplished because getting stuff done in washing requires more than bravado and dubious business chops.Trump has done well for himself, but the America people are about to be his “stock and bondholders” and thats not a great position to be in with this guy.I think the 2020 reaction candidate to the Trumptastrophe will be just want we need to truly make America great again.

          1. JLM

            .If the Republicans emerge with the White House, the Senate, the House (which they will in a landslide, so angry is America and so missed is the lesson of 2014) — they will re-write the path of history.Perhaps the most important function of any leader is setting the tone. For a President, I think of that as “leaning forward in the saddle” while running the actual country.Right now the tone coming from the White House is weak, vulnerable, confused, condescending which encourages our enemies to act with reckless abandon — like seizing the Crimea and invading the Ukraine.[In fairness, Putin is still fuming about not being able to go to Disney World. Sure, he got to keep the Crimea and to invade Ukraine but Disney? Not going to happen and that is a very difficult thing for Vlad to swallow. Pres O really nailed that one, no?]The US economy is weak and the middle class has seen incomes declining while faced with an astronomical increase in health insurance and deductibles. This is entirely policy driven.For the first time in my lifetime, there is an obvious and apparent connection between international trade agreements and local employment. Always been there but never had any sunlight thrown on it.There is a ton of stuff that a President can do which does not require legislation — regulation, the VA, immigration, allocating the Pentagon budget, running the CIA/intel community black budget. There are a ton of laws that just need to be followed. There are relationships and treaties to be worked.I have built 50 story buildings. It is a very complex undertaking. I have a degree in engineering and an MBA in finance. It took every brain cell I possessed to master that craft.DJ Trump built and builds 100 story buildings like other men grow roses. I would be challenged to do that and I have been in the trade for some considerable time. That ability and that talent isn’t chicken liver. [Hate chickenliver BTW.]Do not underestimate DJT.Stay tuned. This guy is going to make YOUR life and the future of your family BETTER. Great, maybe.JLMwww.themusingsofthebigredca…

          2. pointsnfigures

            I thought the next Prez was going to be Hispanic, and I didn’t think it was going to be Cruz so what the hell do I know? I also thought the S&P would trade 1590 this year and that hasn’t worked out so well either. I am as good as a PhD macroeconomist.

          3. JLM

            .Why do economists and business profs live in such shitty homes?JLMwww.themusingsofthebigredca…

          4. LE

            The world would be nowhere without the selfish pricks that are driven by money and success. God knows we wouldn’t have the Internet if not for the Russians. This idea that we can all get along John Lennon style based on love for the other man needs to be tamped down a bit.

          5. sigmaalgebra

            You are correct about B-school profs. I was a B-school prof only for a while and only in an effort to be better able to help my wife in her long and fatal illness. With a little consulting, I doubled my income. I felt I was slowly throwing my life away. Then, with a real job, I tripled my B-school income and should have multiplied it by six to start and more later.Early in my career, I was making in annual salary six times what a new, high end Camaro cost. Yup, some of the Chambertin and Macon was darned good! There was a French restaurant at the SW corner of M Street and Wisconsin Avenue, in DC, right, the Rive Gauche. My wife and I were regulars! Before my wife and I, so were Jack and Jackie, a lot of national TV news people, etc.

          6. LE

            People from the “have not” groups (which includes certain populations of blacks, hispanics and poor whites) might be turned off by certain rhetoric (targeting them) but on the other hand they are definitely turned on by success, and the trappings of success, which act as a halo and an insulator more than you might expect them to be. Even if the success is backed by evil (such as drug dealers and the mafia). It’s human nature.

          7. sigmaalgebra

            The building comparison — nice!

          8. LE

            Defeating 14 other pristine candidates is quite an accomplishment in itself considering he didn’t have the help of people who had been doing this their entire lives as consultants (until the end Paul Manafort). And the success is not dubious he has had less failures than a typical VC. You know in business not everything you try works out. Would you rate a sports team by how they don’t win every game?Only issue that I see is that It’s truly hard to say what he can accomplish in 2.5 or 3 years (prior to having to run for relection). But it will be nice to see someone who doesn’t spend his time (I guess) on stupid political things once taking office (waste of time meetings and going to his kids teachers conferences) that Obama and other Presidents do to get press coverage so they can get reelected.Look the bottom line is this. Trump can negotiate and he can cut deals. That is his strong suit. He knows how to use leverage to get what he wants. He knows how to trade favors. In an environment like that that is what gets things done. He is even a bit sleazy which is good not bad. He is scorched earth. He is creative in how he goes about what he does. All of this could mean a positive outcome.

          9. JLM

            .Trump did all of this in the face of a headwind of a quarter billion dollars of negative ads while spending next to nothing himself.He stared down all of his hundreds of years of political experience opponents, the GOPe, the MSM, the cable punditry, the wise guys, and the conventional wisdom.He was always one gaffe from destruction and he walked the tight rope without missing a step.Oh, yeah, he had no ground game but maybe he had a graves registration type of ground game cause he BURIED ALL OF HIS OPPONENTS.He is a branding genius — ask Mr. Low Energy and Lyin’ Ted.Corrupt Hillary will appear in textbooks within the next month.No, this guy is for real. Bit of a bombastic asshole to be sure — not apologizing — but he’s a leader. The primary campaign proves that.The alternative is a ax handle wide, pants suited liar of garguantuan proportions.Color me Trump.JLMwww.themusingsofthebigredca…

          10. Jess Bachman

            Yeah.. he’s a good businessman, and if I were looking for a CEO, I’d choose trump. But the skills of the presidency do not align with the skills of a business leader as much as you would think. Historically, businessmen man lousy presidents.

          11. JLM

            .Examples?Don’t confuse business acumen with underlying beliefs or principles or governing philosophy.JLMwww.themusingsofthebigredca…

          12. Jess Bachman

            Both Bushes, Hoover, Harding… these are faces who won’t be on our money any time soon.

          13. JLM

            .GHWB — politician who flirted with business (Zapata Offshore) but was Congressman, Party Chair, Ambassador to UN, Ambassador to China, Director CIA, VP and only then President.Probably the best prepared President in modern history.GWB — frat boy son of GHWB, not much more. Name wasn’t Arbusto, then he’d be nothing.Hoover, Harding — too old an example to really be relevant.Fact is, we’ve had very few really good Presidents.I count Eisenhower as the last. Reagan is much beloved because of his personal style but he wasn’t as efficient as Eisenhower. He was lying about the Iran-Contra scandal and threw Ollie North under the bus. Did great in defanging the USSR and the Berlin wall.Ike balanced 8 budgets, kept us out of war (Berlin Airlift aftermath, Quemoy, Matsu, Gary Powers U-2, Krushchev, Viet Nam), built the American nuclear arsenal, and initiated the construction of the Interstate Highway system. He correctly called the Military Industrial Complex.The normalcy and peace of Ike’s 8 years is the real big thing.JLMwww.themusingsofthebigredca…

          14. LE

            Check out this email that I just got from the Wharton Alumni Club. It is true and obvious that quite often the winning politician is typically the best communicator. And in that respect it’s amazing that people even thought Jeb had any chance. And honestly it’s clearly part of HRC’s issue: lack of inspiring speech and Bernie’s appeal….

          15. JLM


          16. sigmaalgebra

            Let’s see:Build the wall?Enforce the immigration laws?Throttle Muslim immigration until we know what we are getting?Negotiate better trade deals?Impose some tariffs and fees?Go for clean air and water, f’get about the carbon footprint, and throttle the EPA?Get rid of Common Core, let schools be run locally without the Department of Education getting involved except maybe for some block grants?Abolish ObamaCare?Defeat ISIS?Reverse a lot of really bad Obama policies?Fix the VA?IMHO, he won’t have any trouble at all doing all of those right away.For what he has said on taxes, his goals of economic growth, paying off the national debt, bringing whole industries back to the US, I don’t knowjust what he has in mind or just how well or fast it can work — and I do believe that any very solid answers will be complicated.But I do know, currently the US economy is nearly flat on its back. Bluntly, except for huge amounts of both fiscal and monetary stimulus, we would be in the Second Great Depression and, correspondingly, WWIII, maybe nuclear, and kill 6 billion people. No joke.We’re all grownups here, right? Well, sit down for this one. As we know, the middle class is big on ownership of detached, single family housing. And we know that the targets of our long efforts at a “Great Society”, “Social Justice”, breaking the cycle of poverty, crime, drug addiction, etc. are rarely owners of such houses. So, presto, bingo, just put the target people in such houses and then they will be able to join the middle class in that respect and all others right away — apparently a lot of powerful people believed this. So, for that, just have Fanny Mae underwrite suitable home mortgages — no documentation, no down payments, negative amortization, etc. Then some CDO guys on Wall Street got to work, built a huge bubble, and both the social justice people and the Wall Street people wanted it to continue. Then some people get a look at some of the real estate assets and, pop went the bubble, down went much of the US financial system, and we were headed for the Second Great Depression. Dumb. Stupid. We’ve been in this mess, the Great Recession, now for 2/3rds as long as the Great Depression.In the US, we have a huge fraction of our workers, Depression level, unemployed and, then, a huge fraction seriously under employed. Put those people back to work, and we’re well on the way — e.g., the increased tax revenues — toward the US “being rich again”. We’re talking a LOT of workers.Notice, that Trump was a finance major at Wharton. And, I have to suspect that, and maybe for some years, he’s had some conversations with some good macro economists who can give him some ballpark numbers about how to get the US economy going again. So, net, maybe much that he has said about the economy has a solid foundation.But, wait, there’s more: In Trump’s recent foreign policy speech, with transcript at,…isIf President Obama’s goal had been to weaken America, he could not have done a better job.I take this statement quite seriously. So, we can do a lot better just by no longer working to weaken our country.Remember, Trump is a smart cookie. Saying he’s a dummy is a fast path to the Loser Squad.

        2. LE

          Me personally? I am ALL IN for the guy.I would be honored if you were to say that some of the things that I have said here played even a small role in getting you to that point (considering a negative blog post that you did regarding Trump at some point).I think if you watched Hillary’s speech after her loss in Indiana or Cruz’s speech vs. what Trump said it’s crystal clear that she is the perfectly coifed candidate who really equates to simply maintaining the same boring political status quo that the “stupid” people that vote for Trump want to change. All of that “my fellow Americans” and all of that “what we want as Americans” and “what we are about as Americans” which means nothing to the guy who has lost his job or the person (even with money) who feels he is paying way more taxes than he should be to support making things better in other parts of the world so we can show some kind of “leadership” (which I will agree up to a point has a benefit).

          1. JLM

            .Of course I was influenced by you, Svengali. Or is it Rasputin?I am a skeptic. While I am all in for Melania’s husband, I remain a skeptic and not an apologist.Elections are binary. You can only vote for one person. And whether because you have Cobra danced me or it has been the process of elimination, I am where I am.I am not an apologist and find much of his behavior to be reprehensible but I love my country and I fear we are at a Decline of the Roman Empire inflection point.This really is a revolution. The Bosses have been exposed and unsettled. I love watching them pretending that they have some faux residual control over things. Pathetic.Like I could care what Mitt Romney thinks about …………. anything.The other day GHWB and GWB said they were going to be sitting this one out. Haha, Jeb Bush was crushed. Emasculated. He was exposed as a consummate, low energy pussy and now the Bush’s are going to take their monogrammed hankies and go home.Fuck them and the horses they had others ride for them.America is angry. America is very angry. That anger drove the 2014 Republican sweep. Folks seem to think this anger started yesterday –news flash, that anger gave the Republicans the Senate, a bigger House, gobs of governorships, statehouses.I am so disgusted with the whiny, victim anointed country we have become — scared of a chalked sidewalk, really?We need this medicine and I will do what I can to prop America’s mouth open and let Donald J Trump pour it in.JLMwww.themusingsofthebigredca…

          2. LE

            Perhaps the party bosses and the pussies have watched the Godfather? And at this point (and what I pointed out to my young naive but highly intelligent wife last night) they will understand that they have to keep the enemy closer and embrace him to be able to have at least some of their agenda cared for? Do you think they will do that and to what extent? At this point some of them are onboard and some of the stupid and less mature ones are still on “never Trump” they are in CYA mode. I did have one bit of admiration for McCain after I heard that he said he was either voting for or supporting Trump even after what Trump said about him. That shows how pragmatic he is. (Vs. his manager who is never Trump).As far as the rented mule from Florida I am sure he is being comforted by mommy and daddy who tell him they still believe in him.

          3. JLM

            .The Bosses will finally come around. They will otherwise become dinosaurs if they don’t. They will try to convert Trump. Good luck with that.You notice something about Trump — when asked something he always answers in the first person: “I will make that decision at the appropriate time.”He never alludes to a big team and never uses the Kingly Plural: “We will make that decision at the appropriate time.”I think that singular embrace of the mantle of power is very subtle and he does it naturally but it is a marker that none of the others use.JLMwww.themusingsofthebigredca…

          4. LE

            The Bosses will finally come around.Trump knows leverage and he knows how to play it coming from other people. As long as he gets something of tangible value from the party bosses he will be glad to give them something in return and they will work together remarkably well.I think it’s hard for someone outside the negotiation and business game to understand this. For the sake of others reading (since obviously you know this) I will give an example of something I did in my 20’s. I probably told this one before. I do not claim by the way to be super successful in the way that others are today either. I am just a normal guy like a million guys out there who manage to make a nice living.I had a machine which I used where I was billed by the click. For years the company (Xerox, it was a 150k at the time machine) charged the wrong rate. I knew this as did my competitors who paid likewise the wrong rate. One day Xerox woke up and discovered the errors and said “ok we will not bill for past mistakes but we will bill you going forward”. All of the competitors bent over, greased up, and thought that was a pretty good deal.I went back to Xerox and convinced them that I wanted to pay the same rate for another year or two. At first the salesman and rep laughed at that as he couldn’t understand why his company would agree to that. Then he asked superiors and came back with the “no, no way”. At this point it was about the game and the challenge of getting what I wanted. It was for fun.So I simply stayed on point and kicked it higher and higher up the chain of command. I finally found a higher level person that agree to give me what I wanted. You know why? I convinced them that they could either give me what I wanted or I would get everyone (which of course I didn’t want to do) to demand the same thing and then they would have a bigger problem. Importantly I didn’t do this by using those words or saying anything that sounded like “lawsuit”(that’s a way to lose every time). I just inferred certain things. Somehow whatever I said [1] (this was back in the day of phone calls) convinced him and I had my deal. Now if I wasn’t such a selfish prick I would have fucked this up by telling my competitors and going that route instead of negotiating for myself a great deal. Was able to keep my mouth shut as well and not brag. That was pretty tough.[1] One of my points was that I had made the deal to get the machine on renewal expecting to pay the price that I was paying. So I gave them a reason to agree with me that didn’t seem like they were giving me something that I didn’t deserve. (And things like that..)

          5. JLM

            .One has only to look at the speed and flexibility demonstrated in his immediate praise of Cruz to see how nimble the guy is going to be.No grudges once the score is finalized. Just pragmatic and practical. Already mentioning Cruz and Kasich for roles in a Trump administration.Why?To get their supporters.He will act Presidential from here on in — two and a half months until the convention.He will not likely pick a VP until the week before the convention but he will seduce the GOPe into his fold by discussing his picks (Cabinet and VP) with them.This guy will do just fine.JLMwww.themusingsofthebigredca…

          6. LE

            Further I say he now ends up releasing his tax returns sooner rather than later. He has played that hand and now needs to put distance between anything that would be negative in that and people casting votes. Maybe right after the June 7th primaries so if there is a negative it doesn’t impact the vote and kill momentum. If.That assumes that there is something negative. If nothing negative then he holds off to keep up the suspense that there is something negative. Then the story becomes “nothing bad” and he gains from that at a more critical point (vs. Hillary) then now. What say ye?He will act Presidential but he will have flare ups like anyone does.I also suspect he will install a television feed room into Trump tower so instead of simply doing call in’s he can give them a video feed.

          7. sigmaalgebra

            His Web site has long had a statement from his tax lawyers on his tax returns — they are always under audit going way back, years. Somehow he doesn’t want to release a return still under audit.

          8. sigmaalgebra

            Great manipulation based on understanding what the other guy cares about and will go for.

          9. sigmaalgebra

            GOPe?Never Trump?Well, there is: … the people who are holding the reins, they have their hands on the switch, they go batshit crazy. Athttp://www.springfieldsprin…is the transcript from the movie Moneyball.Near the end of the movie, there is a summary conversation between Beane and Henry, owner of the Boston Red Sox, about change in organizations.The guy HENRY, apparently owner of the Boston Red Sox, was apparently John W. Henry.Change a few words and can match Trump and the GOPe, etc. HENRY: Due respect to the Coliseum, but this is a ballpark.BILLY: Yes, it is.HENRY: We’re gonna have some lunch in a little bit. Why don’t I have some coffee sent up?Denise?Thank you, Denise.BILLY: Thanks.HENRY: You’re welcome. You know, it’s her birthday and I need to get her a present, but she’s usually the one that does that for me. So do you have any ideas?BILLY: Scarf.HENRY: You mean like wool?BILLY: No, I meant what women wear with… You know, decorative.HENRY: Ah. And where would I get something like that?BILLY: No disrespect, I just lost in five for the second year in a row. Get her a bowling ball for all I care.HENRY: Right. Well, Steve told me he’s offering you a new contract.BILLY: Yes.HENRY: So why did you return my call?BILLY: Because it’s the Red Sox. Because I believe science might offer an answer to the Curse of the Bambino. Because I hear you hired Bill James.HENRY: Yup. You know, why someone took so long to hire that guy is beyond me.BILLY: Well, baseball hates him.HENRY: Well, baseball can hate him, you know. One of the great things about money is that it buys a lot of things, one of which is the luxury to disregard what baseball likes, doesn’t like, what baseball thinks, doesn’t think.BILLY: [CHUCKLES] Ah. Sounds nice. Well… I was grateful for the call.HENRY: You were grateful?BILLY: Yeah.HENRY: For 41 million, you built a play-off team. You lost Damon, Giambi, Isringhausen, Pena, and you won more games without them than you did with them. You won the exact same number of games that the Yankees won, but the Yankees spent 1.4 million per win and you paid 260,000.I know you’re taking it in the teeth out there, but the first guy through the wall, he always gets bloody. Always.This is threatening not just a way of doing business, but in their minds, it’s threatening the game. Really, what it’s threatening is their livelihood, their jobs. It’s threatening the way that they do things. Every time that happens, whether it’s a government, a way of doing business, whatever it is, the people who are holding the reins, they have their hands on the switch, they go batshit crazy.I mean, anybody who’s not tearing their team down right now and rebuilding it using your model, they’re dinosaurs. They’ll be sitting on their ass on the sofa in October watching the Boston Red Sox win the World Series.BILLY: What’s this?HENRY: I want you to be my general manager. That’s my offer.

          10. creative group

            LE:”Young naive wife” Did you make that degrading statement in a forum of strangers and people you are acquainted because you assumed it was cool to post? Your wife expressed an independent thought not controlled by neanderthal thinking? This really makes us wonder the motives and reasons why woman marry. Is it for money, material comforts or just being a Stepford wife? Woman are worth more than being a robot for men who think this way. That entry was disgusting. Views aligned with a political view of women. You really think a general election can be won without women who are thought of as naive. OK wishful thinking. Guys are amazing in business but are aholes and totally disconnected socially. Just couldn’t write this as a non fiction book. We continue to be outflanked with craziness taken as normal.

        3. LE

          Hand me a pitcher for a sip of that.I love his flaws which I think creates the energy which drives his persistence and ability to take on and take down all comers. He is an animal. He is a disruptor. He is a doer. He is a man. He has balls. He is a patriot.Lot’s of people also don’t understand what it’s like to be essentially a small business person operating (in NYC no less with unions) trying to do construction. That’s a fuck you world, no? A guy like Trump has spent his entire life saying what is on his mind and being tough and people who are in the corporate world or have to watch what they say simply aren’t used to seat of the pants that environment and what it’s like and what it takes to be successful.

          1. JLM

            .Bit crude — most men have never been in an actual fight. Have never tasted their own blood. Have never beaten anybody’s ass physically. Don’t have that gear and couldn’t protect themselves or their family if it went Ugly on an Ape.I remember taking boxing in college and sort of falling in love with it. I recall getting the shit knocked out of me and waking up to have Col King standing over me and almost laughing. Then I got up and returned the favor.I remember learning hand-to-hand combat and being counseled to never engage in hand-to-hand combat but knowing I could if I had to.Every unit I ever commanded got a big dose of hand-to-hand combat training which backfired on me when about 25 of my guys cleared out a bar one payday. They beat the living shit out of at least 4X their number. When first reported to me, I was quite proud and I told the hand-to-hand combat instructors they had done a very good job.When the Colonel jerked me to attention and chewed my ass, he ended up by saying — “Apparently, the MPs said your guys beat the shit out of them. That hand-to-hand training seems to work.”Trump, as you note, has this earthy experience and the resultant confidence.The more I learn about Trump, the more I think he is the right, bare knuckle guy for this time. Like Churchill, he may overstay his welcome but right now, we need a good dose of Trump and to give the world a punch in the mouth.JLMwww.themusingsofthebigredca…

          2. LE

            Well you know as a short jew I truly believe one of the reasons our “peoples” are the way they are is because at the base they are pussies (as a generality of course) and tend to use our brains rather than our brawn to get what we want. At least in the modern age and maybe before that. Because we have to to survive and can’t bully our way. It’s a challenge and a game. You know my guess is that all of those people in the audience that Trump referred to admiringly as “good at negotiation” [1] most likely have never been in a fight they were able to talk their way out of or avoid trouble. Total speculation on my part. I am sure some academic can figure out a way to throw water on that thought.You know when I was in high school we had to pick a sport. And for some reason I picked football (rather than soccer). And it only took one tackle for me to realize I didn’t want to go on the field and I essentially said “don’t pick me” which was fine at this school. So you know all of those guys who were more men than I was are the ones who got hurt (even at this pussy school) and are dealing with the problems now of those injuries. Or like Brian Williams having to deal with a knee injury that he got playing manly high school football.…[1] A compliment that for some reason some took as a negative go figure.

          3. Lawrence Brass

            Now he has two months to clean the blood spilled, help healing his opponents wounds and get into good terms with the GOP. So now he will play “The Amicable Negotiator” and aim at the center.

          4. JLM

            .Most candidates drift to the right (GOP) during the primary and then reverse field and move toward the center in the general election.Reverse the directions and that’s the Dems, also.Nothing new there. We are at a time of shameless, opportunistic fluctuation. Beyond belief.I don’t think that Trump has too many issues upon which he intends to drift. There will be huge outreach program and he’ll be rubbing up against a lot of people but I think DJT dances with the girl who brung him.It is worth noting that people like Vincente Fox, former Presidente of Mexico, and Cameron of England have begun to reach out as they see Trump winning.Point being — he will stand there with open arms and his opponents and critics will come into that embrace. If he is smart enough not to crow, he will make a lot of new friends.He is not going to self-fund his general election so there will be a bunch of people who, having had no chance thus far to get on the train, will be buying first class tickets.Witness the speed with which he made peace w/ Cruz and Kasich. Shameless, almost.JLMwww.themusingsofthebigredca…

          5. Lawrence Brass

            It will all depend on the size of the center, in a bipartisan system I would think the center are those voters that can vote for democrats or republicans in-distinctively focusing in the candidate’s persona. What would be the size of the center in the US?

          6. JLM

            .The center is not a size issue, it is a “deciding to vote” issue. The zealots on the left and right were born decided.Most people in the US don’t focus on the Presidential election until the middle of September — after Labor Day.Only then will they decide to decide. No big thing just like folks wait until the middle of Christmas to start even thinking about Christmas gift purchases.This is why all the polling hysteria about Trump v Clinton is so much noise. It’s not close enough to Christmas for it to make any real sense.Having said that, I am very surprised at how well Trump’s numbers show. Presidential polls swing 20+/- during the post-Labor Day time period.I have Trump in a landslide. Maybe the greatest in history. I am taking a few large bets where I can get some odds.Bad move to overlook the 2014 Republican blood bath and the reality that Trump gets to run against both Obama and Hill.JLMwww.themusingsofthebigredca…

          7. Lawrence Brass

            Being far away and unaware of the nuances of US politics place my words in the territory of ignorance and speculation, but a landslide? Hillary is closer to the center and has formidable political machinery behind her and very smart people advising her, perhaps too many. Trump will have to come up with a new character in his script for the second act, and it has to be likeable to women. I am curious about what this new character will look like.

          8. JLM

            .It will look very much like the guy who managed to seduce and marry Ivana, Marla, and Melania. This guy is “bad” with women?You have to know two things –Bill Clinton became President by an accident called Ross Perot who took 18% of the vote in 1992 and 8% in 1996.She inherits this anemic slice and nothing more.This is the second time that Hillary had been “anointed” the Democrat Presidential nominee. The first time, she gave it to a guy named Obama.This time, she’s giving it to a 74-year old Communist who never identified as a Democrat until he filed to run. Until then, he was an Independent.Absent SuperDelegates, she doesn’t win the nomination and she got creamed in Indiana this week.She is a legend in her own mind and nowhere else.Trump wins in a landslide with huge — huuuuuuuuuuuuuuuuge — coat tails.JLMwww.themusingsofthebigredca…

          9. Lawrence Brass

            He can’t marry all the women in the US, less give them all access to his bank account.Enough Trump for today, I somewhat knew you would jump when you read Fred’s comment.Your huge remark reminded me about this: Jimmy Fallon and Donald both playing Trump:

          10. sigmaalgebra

            > greatest in historyTo count at all have to win some states, some whole states. So, I’m wondering, just what whole states can Hillary really count on winning? Manhattan? Maybe, but that’s not a state. NY? I doubt it. Think of those Trump rallies in Upstate NY cities that lost ballpark 50% of their manufacturing jobs.CA? Right? Trump just had an intimate little party in LA, with 31,000 supporters. Intimate. Little. And they weren’t waiting for Labor Day — not this time. And no telling what political parties they were registered in, if any.I’m looking for a single state, just one single state, please, where Hillary has a good chance. Anyone? One good state? Anyone? Please? Waiting ….

          11. creative group

            JLM:sorry to bust your bubble. Trump entitled Whalton Business School at UPenn attending ass has never had a physical fight in his life. Stop the tough guy rhetoric. Only a few in this forum had exposure to the intercity of Compton, Watts, East New York, Harlem (circa 1960-90),DC (Not surrounding States) and could survive to tell about it. PLEASE STOP THE TOUGH GUY RHETORIC! PLEASE!We do thank you for your service. You are confirming you missed the section 8 diagnosis.

          12. JLM

            .While I do espouse the return to duelinghttp://themusingsofthebigre…as a legitimate dispute resolution technique, I may have mislead you if you have concluded that I think Donald Trump is some kind of tough guy from a physical perspective.On the contrary, he was a Viet Nam era draft dodger who wiggled out of the draft on his dainty “bone spurred” feet. He joins a great gaggle of cowards who were afraid to serve their country (Cheney, Clinton, Gramm, etc).I have no quarrel with anyone who simply chose not to serve after the draft was reduced to a numbers game but I have no love for anyone who avoided service through a ploy. There were a lot of men who did just that. It does irritate me when they become big advocates of the use of force, such as Cheney.Trump is a guy who leans forward in his saddle. For that, I support him. Right now, that will be enough.Please do not thank me for my service. I really did not do it for a noble cause, or you, though I did think about it. I got a great education in return for my service both undergrad and grad school.It was the family business. I enjoyed it thoroughly. I got to see the world but I never really read the Constitution in those days so while I swore to defend the nation against all enemies “foreign and domestic” I was really not giving an informed consent.I was about 18 the first time I took an oath and 21 the second time.Section 8 is an archaic reference to a WWII era discharge for the good of the service. It never existed when I was on active duty.Officers returning from certain types of overseas assignments get a chat with a shrink as part of their “profile” workup. I had a few of those and I did fine though lately I am feeling the desire to do violence to some people. Better get a tune up.JLMwww.themusingsofthebigredca…

          13. creative group

            JLM:just go talk with someone in the mental health at the VA. It requires a man to acknowledge when they need help. No shame.The statement of harming others is a cowards way of being unable to deal with what they are unable to control. Other people.A cry for help. No one will have the courage to reach out and help you. You will have a cheerleader section cheering those crazy comments on verses the sane person realizing you are crying for help and being disenchanted with you thoughts on other human beings. Yikes!

          14. JLM

            .Ahh, CG, that little tug on your leg? That’s me pulling it. I think I’ll be OK, close call but OK. Thank you very much for your concern.You may want to try not to take yourself quite so seriously. As to cries for help, I think that’s really a cry for barbecue or TexMex. I’m having a hard time deciding tonight.I actually have to go to Waco tom’w, so maybe I will stop by the VA. Then, again, the VA doesn’t really work. That’s one of my pet peeves.Rest easy, we’re doing fine. And, hey, think how great it’s going to be when Trump Makes America Great Again!?JLMwww.themusingsofthebigredca…

        4. creative group

          JLM:Your complete disregard for commonsense and persistence to express what has truly been in that brain while running businesses is not only troubling but alarming. When a person faces their mortality the stranges thoughts evolve. We don’t agree with everything with anyone but the basic foundation of being just a descent human being is breached when thoughts you expressed are embraced. You have totally convinced us you and people who think that way are totally nuts. Go rent Gangs of New York and understand every minority group has been discriminated against. You will only need to replace those archaic thoughts with keep the Blacks, Jews, Asians (Which based upon the Immigration reports are the fastest growing minority violating US immigration laws) Facts usually get lost in the hyperbolic rhetoric. We realize no one will challenge you for the obvious reasons but your business mind is just too valuable to have it consumed with those 1886 Nationalistic views. But you did have the unmitigated gall to post it. Yikes!If a Democrat would have posted those thoughts we would have posted an identical response. Fred only referenced voting for Trump as one who is Republican thinks of voting for Hillary. With all the contributors in this blog who are right wing why would you assume there would be a need to indirectly address you. That is grade school at best. If those thoughts are that extreme why isn’t a Right wing blog created and supported? We just stepped down from the soapbox. Microphone dropped.#Independentsfortermlimits#twopartysystemsucks

          1. JLM

            .Haha, what are you talking about?Watching a movie, which is fiction, to understand exactly what? Why not just read the history of our great country?JLMwww.themusingsofthebigredca…

          2. creative group

            JLM:This country is still great and continues to get better. The false notion that this country needs return to being great again is a false narrative for the White Nationalist crowd.Ask the people who hate and attempt to do harm to America how great America is. Wait they can’t because of tasting a drone.If people don’t like America they are welcome to leave. Many can return to their ancestral land in the Caucasus mountains.If these statements of America not being great were even mouthed during W Bush administration they would be outed or labeled anti American. A fact.#americaisalwaysgreat#independentsunite#termlimits

          3. sigmaalgebra

            The false notion that this country needs to be one great again is a false narrative for the White Nationalist crowd.You gave no evidence. I’m fairly well informed on the issues, and AFAIK there is no support for that claim. That claim is likely propaganda from some of Trump’s opponents.You need to do much better selecting sources and filtering input.IIRC there was a news report that Hillary has $1 million to pay blog trolls. Can you let us know what the rates are?

          4. creative group

            sigmaalgraba:We are sorry to notify your misinformed young mind that we are not supporters of either of the two parties. Try again. Your talking points you are given are not effective in a space of intelligent people. Just not going well in this crowd. Try the Fox News comment section. A wealth of support for non analytical thinking. Fire is yelled consistently there. Happy trails.

          5. JLM

            .We have stumbled on a big difference in our view of current events. In my view, America is not living up to its potential and has not for some considerable time.By any objective standard — evidence of which your statement is grossly lacking — declining labor force participation rate, diminishing percentage of home ownership, shrinking median family income, rising costs of health insurance, underemployment (BLS U-6/7), exploding dependency rolls, smothering regulatory environment, anemic job creation, longest recession recovery in the history of the US, lack of foreign policy planning, inadequate military readiness, blossoming size of government, the weaponization of gov’t for political purposes, the national debt, the current deficit, the explosion of illegal immigration while thumbing its nose at legal immigration, trade imbalance with major trading partners, foreign policy disasters, nuclear proliferation, the resurgence of Russia/China, the threat of radical Islamic terrorism, the emasculation of law enforcement, and decaying relationships with key allies — we are a greatly diminished country.Compared to some time ago, we are not the GREAT country we were and the trend of everything is downward. Speaking truth to power requires a thinking man to ask — why? And a person who is a patriot — why can’t this be reversed?These are objective measures which have nothing to do with either nationalism or the color of a man’s skin. Your reference to “white nationalism” is offensive and not true.We are also at an all time low in the comity of race relations in America. It is difficult not to suggest that this trend has accelerated under the care of the current President.You couch this in some form of Bush v the current administration which is a premise I reject completely. The decline has been underway for some considerable time and bridges several presidencies.While there is plenty of blame to go around, there is a consistent drum beat of progressive policies which have resulted in the lion’s share of these declines.All of that can and should be and, hopefully, will be reversed.There are also specific failures that merit individual note — North Korea being ushered into the nuclear club, the resurgence of Russian (Crimea, Ukraine) and Chinese aggression, the disastrous Iran deal which simply placated a vile enemy and destabilizing force in the Middle East while ensuring a clear path to nuclear weapons, the estrangement with Egypt, Israel, Saudi Arabia. Add the disastrous rejection of any notion of a national energy policy.I don’t know why any reference to Bush is some safe harbor or firewall. He enlarged the size of gov’t, added unfunded mandates, drove us into two wars — the results of wars are real.It does not make any difference if they were popular at some instant in time. When we have a final report card, then that is the final grade. Both Iraq and A’stan were stupid, horrifically expensive, failures.Whether these failures were marked at the outset or at the mid-term or at the end, makes no impact on their final grade. FEvery example I note is the result of a policy initiative or a policy omission which can be tracked to the White House or the Congress. I care not a whit who was occupying those edifices. I care only about the results.I have long said that there is no greater comfort with the Republicans than there is with the Democrats. I’d love to see every Senator and Congressman limited to two terms and no more.Hope this helps.There is plenty of room for America to improve and to Make America Great Again.JLMwww.themusingsofthebigredca…

          6. creative group

            JLM:you outlined a litany of views and opinions included with factual and historical occurrences. Our time is limited so addressing each point in its entirety isn’t necessary. We agree with some points and others would require an explanation on Globalization, free markets, etc.Let’s all put our energies on what we agree on. Business education, discussions on running businesses, term limits for Politicians, investing, etc.This blog reminds us when day trading we would frequent the yahoo finance chat in the early nineties and all hell would break out over shorts talking negative on penny stocks we did well with.

          7. JLM

            .OK, you’re dismissed.Discussion is most effective when people exchange views on things they don’t agree about. When you talk about the things you do agree on that is called an echo chamber.I have given you specifics and you have given me indistinct unfounded slogans.Adios.JLMwww.themusingsofthebigredca…

          8. creative group

            JLM:will email you later.

          9. JLM

            .Can I do anything to talk you OUT of that? Please do NOT.I can barely keep up with the voices in my head let alone answer emails.JLMwww.themusingsofthebigredca…

          10. Lawrence Brass

            JLM and Creative,Let’s finish washing the glasses, open the windows to freshen up the air a bit and tidy up the place, toworrow is a new day. The bartender arrives early and nobody wants him upset.

          11. creative group

            Lawrence Brass:your wisdom was embraced when we read it. We enjoy life offline and understand this blog isn’t a replacement for it. This medium can become an addiction. Moderation in life is a key.We thank you again.

          12. sigmaalgebra

            It’s not very clear to me just what you are saying or why. I can guess.First, a lot of people have claimed that Trump is racist, misogynist, and xenophobic, encourages violence, and more.Second, you have believed some of these claims and become strongly against Trump.So, let’s see:”Racist”? He’s for LEGAL immigration and for enforcing our immigration laws long on the books. For Mexicans, he has said right away essentially every time he has mentioned immigration that he likes the Mexican people and has hired thousands of them. For Muslim refugees, he is for a temporary halt until we can get a good process that will keep out radical Islamic terrorists — simple common sense. Gee, if we let in a lot of Muslims from Syria, etc., Muslims with no documentation, what could possibly go wrong? Or, very strong in Islam is that everyone else is an infidel to converted or killed — see e.g.,…To deliberately let in radical Islamic terrorists may be high treason.For women, maybe 99% of the women on the planet would rather be a Trump spouse, daughter, daughter in law, or employee, e.g., some of whom have been high level managers, than anything or everything else in life. He treats women like someone somewhere between a princess and an angel — he can afford to and does.For xenophobic, again, he is for, did I mention, LEGAL, immigration wants to enforce the long existing US laws on immigration, and doesn’t want to let in Muslims that have high chance of being ISIS soldiers and radical Islamic terrorists out to attack the US.For encouraging violence, it is in no way his fault that some protestors want to be violent as Trump and his audiences exercise fundamental constitutional rights of freedom of speech and freedom of assembly. At his rallies, when security staff are removing protestors, Trump commonly says over and over “don’t hurt them”.When in Chicago many protestors came to block the rally and attack Trump supporters, Trump, still at the airport, hearing the reports, to avoid violence, just cancelled the rally. Net, it is some protestors who have been violent, not Trump, and, really, not much Trump’s supporters.Net, the claims are just political propaganda and, all essentially totally false, serve the interests of some of Trump’s opponents.Some of Trump’s opponents want the immigration laws ignored. And some of opponents want trade deals that let them export US jobs and companies and import foreign products. In both cases, especially for the Republican opponents, they are going for their own profit against the economic interests of about 95% of US voters. Those opponents stand to lose a lot of money and are angry. But 95% of US voters are losing a lot of money and are also angry.Cruz, Kasich, Rubio, Bush, and Hillary are all for the 5% making the money and hurting the 95% and just hope the 95% don’t catch on to how they are being ripped off.So, we have some differences of opinion. So did the ancient Greeks, and they found a way to settle the fight at the ballot box instead of in the streets — a democracy with voting. And that’s just what we are doing. But the Trump opponents are not happy.Why is Trump winning? Because 95% of the voters have huge reasons to be for Trump and no one else, and ALL the other candidates are trying to please the 5%. So, 95 to 5 — beginning to understand why Trump is winning?You should look directly and carefully at primary sources, set aside nearly all media opinions, and reject manipulative propaganda.

          13. creative group

            sigmaalgebra:against better judgement we will hopefully give you our unbiased accessments.We are truyly Independent. We feel both parties offers are flawed. It will come down to the lesser of the two evils for us. Who would be best for the business world.We are product of New York City. We are quite familiar with Trump. He has always been considered a RINO. We definitely don’t think Trump believes what his supporters actually believe. No Republican would give Democrats funding against Republican’s. Can make an excuse for it but it doesn’t fly.What Trump has said without filter is inexcusable. Especially regarding women. You outlined his statements and provided excuses and talking points that intelligent people just will not be able to consume. You are calling a white Horse black when it isn’t.But we acknowledge your partisan views. We are objectively viewing what is actually being said verses the spin required after it already said. Can’t understand how Republicans can ever win the Presidency with this thinking. It is like wishful thinking. Both loses to Obama the identical fevor was exhibited and drinking the Karl Rove Koolaid to losses. It only is continuing down the same road as he gets richer running Crossroads and other names.

          14. sigmaalgebra

            > What Trump has said without filter is inexcusable. Especially regarding women.You made no case. To start to make a case, you need some actual Trump quotes, from primary sources. Versions from newsies don’t count. Some actual quotes. And quoting what Megyn Kelly said that Trump said doesn’t count, either.

          15. creative group

            sigmaalgraba:This will not make a difference in your mind. Excuses replacing facts will be presented.In Trumps own words with no need for interpretation from anyone with a brain not brainwashed from either party.…Conspiracy theories fact check. (soh)…We now realize the challenge on this blog engaging in any meaningful and intelligent dialogue when the information is based upon conspiracy theories. Yikes!If HRC wins it will be four years of seeing the crazies evoking that trash on all blogs. HRC now was one of the shooters in Benghazi, organized it and is responsible. Nuts!

          16. sigmaalgebra

            The article in Politico was silly. They made no case of a contradiction.Their first example was their worst:“I have no intention of running for president.” (Time, September 14, 1987) “I am officially running for president.” (New York, June 16, 2015)There is no contradiction there due to the large, huge, difference in the two dates.So, already we know that the article is junk.For the pro-life versus pro-choice stuff, there are no contradictions, not because of what Trump said but because we don’t have clear definitions of pro-life and pro-choice. Anyone is free to be pro-life in the sense that they believe that abortion is ugly and they hope no one has an abortion. And at the same time they can be pro-choice in the sense that if someone really wants an abortion then, legally, they should be free to have one.For the others, have to note that Trump often speaks in broken, ambiguous terms. We can be very sure that he knows very well what a clear, solid, unambiguous contract is, and then we can observe that some of his public statements going way back years before his run for POTUS are, in a few words, a total mess and highly ambiguous. So, when he says something ambiguous, then just have to conclude that he didn’t say very much. Then the next highly ambiguous statement on the same subject may not really be a contradiction. Ike was good at mumbling nonsense when he found it useful.So, why vote for someone who in some cases basically refuses to take really clear, unambiguous, as solid as law, science, or mathematics positions? Simple: Well, then, maybe Trump is not the best possible candidate for POTUS. But, we MUST pick a POTUS, and for that we have little choice but to pick from only the people who are running. So, maybe we don’t get to vote for the best possible candidate. Tough life we live. Mean world it is. Sad situation we’ve got. So, maybe we have to settle for the least bad candidate.So, we look at the other choices. I’ll be back after I upchuck …. Then, my choice is Trump.So, what might Trump do on abortion? Likely very little. I suspect that his real position is, with high irony, the one phrased well by Hillary in one of her earlier campaigns:Abortion should be safe, legal, and rare.At least in this country for now making abortion illegal would create worse problems than we have now. Sure, the country club set mostly doesn’t have to worry much about abortion. On the other hand, when they do, e.g., at times they too make little mistake-ys, their medical staff just has her in the hospital for some “woman’s problems” and does a “D&C”.Maybe Trump agrees with another standard statement:Abortion should be between a woman and her physician.For more, I suspect that Trump will try to avoid the issue, hope that he can leave it to the states, etc.IMHO, any politician who talks about abortion is deliberately avoiding talking about anything important for our government.For funding of abortion, say, at Planned Parenthood, no telling what might happen, that is, considering Congress. But, if Planned Parenthood can’t get Federal funding for their abortion program, then there will likely be private sources.Welcome to the real world.Part of this real world is the claim, which I tend to believe, that long the true conservatives in the Republican party have used the abortion issue as (A) a means of fund raising, say, from people who would never need to get an abortion from a rusty coat hanger or a back alley, and (B) a wedge issue to deflect discussions away from anything important and into abortion instead. So I don’t want to fall for this silly manipulation and wedge issue about abortion. So, in particular, I don’t care how ambiguous Trump is on the subject.Instead of abortion, I want to consider jobs, taxes, the economy, national security, illegal immigration, that is, the issues Trump talks about a lot.And I’m not going to think badly about Trump because of silly manipulations from his opponents that his style is not presidential, that what I regard as just totally cooked up claims that he is a racist, misogynist, or xenophobe, etc.Cruz? I agree with him: He is a true conservative, a rock-ribbed, granite hard, totally rigid, closed-minded, unfeeling, totally without sympathy, empathy, or caring, uncomprehending, iron-clad, doctrinaire, 100% faithful to the catechism, conservative. His policies would kill lots of people and bring riots in the streets. He’s also highly legalistic, believes in the law, the law, the letter of the law, cherishes the law, reveres the law, regards the law and only the law as all there is that is true, valid, or important, and feels totally free to say or do anything he wants if it is legal or he can get away with it. To Cruz, what is right is just the same as what is legal and he can get away with. He wants a flat tax which is such a big way to make the rich richer and stick it to the little guy that he would have riots in the streets. To propose a flat tax, he has to be in the pocket of some rich idiots. For a person to come to such positions looks to me that he had one heck of a stressful childhood and, for basic psychological security, pushed aside reality and grasped desperately to his simplistic, brain-dead, absolutist positions.Rubio? A water boy for the open border crowd and otherwise a silly and nasty little twit.Hillary? Talented with language but bitter and angry beyond belief at the world because it is making it too difficult for her to get what she wants which is to beat men at their own game, thus, be more like a man and as little as possible like a woman, and, then, get praise, acceptance, and security from her father who made it darned clear that he wanted a boy instead of a girl. She has the determination illustrated by Scarlett in GWTW when she was hungry — willing to lie, cheat, give up love and marriage for a power partnership, … to get what she wants.Jeb! He was told by GWB and GHWB that it was his turn but, really, just wanted to play at something and take naps. GWB and GHWB told him that he could handle the job of POTUS — just let the party recommend some advisers. Then, during the campaign, he tried to do what others, especially GWB and GHWB and his donors told him to do. No thanks.It goes on this way. The person I would really want is not running and, really, wouldn’t win; and if they did win, would d piss off about 90% of the people and get impeached for just anything, maybe just throwing a wad of paper at an Oval Office waste basket and missing.Instead, a necessary condition for doing better is having a good leader, that is, someone who can get a few hundred million people to follow them. Well, Trump can get 30,000 people to stand in line for hours to get to one of his rallies where about all he says is available in video clips on YouTube of his last dozen or so rallies.I agree with Bobby Knight: It’s clear that Trump is a smart cookie, energetic, tough, determined to win.My reason for why Trump is running: He sees that the country is in trouble and going in a horrible direction and is ready, willing, able, eager to fix the problems. His main motivation is love of country. He also wants to leave a better country for his family. His reward will be pride and the acclimation of many score millions of US citizens.Trump is not just good but exceptionally so. He is so good he won the nomination (essentially so, although Cruz, as I anticipated and posted at JLM’s BRC, is considering getting back into the race) in ways that he made look easy while essentially every news source, pundit, and politician said he had no chance. So, he is so exceptional he is well beyond the comprehension and understanding of everyone one might look to for an opinion. And the whole thing cost him to date ballpark $40 million. Part of how he was a smart cookie is that he got ballpark $2 billion in free media coverage — smart cookie.For a lot of what he has promised — e.g., fixing the VA, building that wall, enforcing our immigration laws, negotiating better trade deals — he can get those all done right away. For the rest, did I mention smart cookie, energetic, tough, determined to win?

          17. creative group

            sigmaalgebra:we were warned. You appear to have a lot of spare time on your hands? Time management doesn’t appear to be an issue with your elaborate diatribes and bullet point responses. If we had the luxury this would be entertaining. We just don’t, life offline commands more time. And the conspiracy theories are guaranteed to follow if HRC wins office. ( We know anarchy and civil war will happen with the White Supremacists (Oh misquote, the unsatisfied electorate if the Illuminati appoints her)

      4. jason wright

        on Trump, there’s a theory that he might be a stalking horse for Bloomberg. i don’t know the technicalities of the US electoral system too well, and i wonder if this is even possible, but could Bloomberg step in and try to pull the Republicans more to the centre ground having previously left because of its far right?

      5. LE

        One of my newer favorites now is people in Teslas climbing into the back seat to show the autopilot working down the highway. All to post a video on youtube or social media and get some hits.

      6. Alexander Close

        Charlie Munger has an awesome talk whereby he runs through his reference list of 22 standard causes for human misjudgement – a list he consults before making investments.Coles Notes – the misjudgement:heroin –> #13trump –> #7, #10100mph –> #2, #20lottery –> #2, #14, #16

        1. LE

          Right Charlie and Warren. Who talk about how sugary coke is actually good for you (Warren says he gets 25% of calories from coke.) You know what Warren said? Something like Coke isn’t bad for you because you know that pleasure you get from drinking the coke is good and you need pleasure and you have to factor that in the positive aspect. You see nobody takes him to task over that entirely 100% self serving stupid statement justified by his personal experience (n=1; my mother smoked and she lived to 99 type thing) and investment bias. By that metric smoking is good as well because even though there is a downside there is a tremendous upside to smoking.

          1. Alexander Close

            Saying cola is good for you, while owning a ton of coca-cola. Sounds like incentive caused bias.

          2. JLM

            .Yeah, until you begin to cough.JLMwww.themusingsofthebigredca…

        2. JLM

          .If one reads about Munger, one learns the guy had a very tough lane in life. I love seeing wisdom come from struggle.Well played.JLMwww.themusingsofthebigredca…

        3. Twain Twain

          Thanks for sharing Munger’s nuggets!

      7. kidmercury

        dissing drug addicts, trump fans, reckless cyclists, lottery players, and LPs in a single comment. basically you dissed half the country right there. damn.

        1. LE

          He forgot to include the few people who will wear suicide vests or fly planes into buildings. Or even Edward Snowden, da?

      8. creative group

        fred:you could have actually used something less lethal than a Panzerhaubitze 2000 on that response. lol

      9. sigmaalgebra

        > don’t make sense … vote for donald trumpGee. But, I understand:First, since we understand that we have secret ballots, no telling who one votes for!Second, it’s easy to understand that Manhattan is a Democrat party and NYT city and has more hens teeth then people who want to appear to be for a Republican.Third, for any rare Republican in Manhattan, the person for POTUS is, or this year was, Kasich. That is, for how spectacular Trump’s victory was in NYS, Kasich won Manhattan!So, we don’t expect to find a lot of vocal Trump supporters in Manhattan!

    2. Matt Kruza

      Part of it is they have so much damn capital to invest. Take a pension fund like Calpers (admittedly an extreme example as largest in the country). They have $255 billion.. yes billion that they are investing. They don’t want to write $25 million checks over a 5-10 year deployment model… just too small. Also, venture capital funds have very skewed returns, just like the start-ups they fund. The average VC fund for any year / vintage may LOSE money, and certainly will underperfom the S&P over life of the fund. So you have about 10-25 funds that are worth investing in (USV being in that list), and they are very hard to get into, so big LPs need to find a handful of top tier funds and try to put a meaningful amount of money at work. That is a huge part of the structural reason.

      1. Girish Mehta

        Your first sentence – pretty much the primary reason for many crazy things.Lots of money – in search of yield.We have systems built for a world of scarce capital in a world where capital is no longer scarce.

        1. Matt Kruza

          Yeah, there is a more formal economic phenomenon for it (escapes me at the time) , but talks about assets / GDP ratio. Somewhere around 5-6x now (this includes, stocks, bonds, housing etc) and it creates problems for getting decent yields because there is only so much return to go around. If you want to say assets get 25% of return, then average yield can only be 4-5% (25% divided by 5-6 x assets to GDP). This can only happen in a low interest rate envirmonent. If the risk-free rate (best proxy is us 10 year note) went back to say even 4-5 percent you would probably need to see assets to gdp go down to 3-4. Since world GDP is 80 trillion, this would be a loss of $160 trillion.. yeah people aren’t too excited for that.. which is why low interest rates will be kicked down the road for 20 years or more likely.. and also why long-term returns over say 5-6% CAGR are very unlikely for decades..

          1. Girish Mehta

            Yup, low interest rates are here to stay for a long, long time.

    3. Pessimistic, yet not Cynical

      Consultants are a big reason for this with institutional LPs. They tend to pitch a brand name or fund that has done well in the past because it is easier to get ALL of their clients into these funds. Boards for these LPs are typically not investment professionals, so they will approve of brand name/herd following before anything remotely creative. These bulked up funds have typically larger AGMs with better networking possibilities, which could be good for smaller check sizes looking to get their foot into doors previously unseen. Some are simply asset allocators with fat checks to burn. Not true investors. There is no shortage of excuses in this industry, and in my experiences a lot of it just boils down to complacency and ignorance.

      1. Matt Zagaja

        We have a saying in the tech industry: “nobody has ever been fired for going with IBM”. In any organization if you look at a decision that seems wrong through the lens of “is this a decision that minimizes the chance of the decider being fired (or blamed) if it goes wrong” the answer is often yes.

  2. JimHirshfield

    Great post, Steph.

    1. fredwilson

      i am not on the DL

      1. JimHirshfield

        Definitely not. Just be sure to stretch before each funding.

  3. Frederic Court

    Fred, I couldn’t agree more! The other benefit is alignment. More alignment with investors as in a small fund the team’s incentive is definitely on the carry side, not on piling up management fee. Better alignment with founders too as every investment counts in small funds, with less shots on goals and more conviction required by the GPs.

    1. fredwilson

      yes, for sure. i started out in the VC business in a 20 million VC fund. we did one round and then held on for dear life taking our pro-rata if we could. that created a lot of alignment with the founders and i have always held to that model in my mind ever since

      1. pointsnfigures

        I have found if I fight for them, they fight for me.

      2. JamesHRH

        That makes you Draymond Green partner!

  4. James Ferguson @kWIQly

    In the enterprise rather than consumer space ‘small ball’ may be even more so the *way to go*. The following all spell – “get your hypothesis evaluated before you go big”:- Longer to revenue- More demanding specs for MVP- Key players that are not commoditiesSo these “small balls” take a long time to get to market / develop channels and have an ultra specialised proposition – pre-traction they stay lean, but if / when they pay off, the pay window is wider.As a fairly long term commentator at AVC we have *sniffed around* the investment market a couple of times but cost of fund raising (time) never seems to pay-off for the opportunity cost (distraction).I guess many, many “small ball” plays do fail, but some must go all the way without ever taking external finance – would love to see some stats.

  5. Lawrence Brass

    Small is still beautiful.

  6. William Mougayar

    This reminds me of the expression “punching above your weight”, which I like a lot.

  7. Camiel van Velthoven

    Small ball is also used in Poker. See for example Daniel Negreanu, a master at pot control:

    1. creative group

      Camiel van Velthoven:We enjoy listening to Daniel Negreanu and he appears to present a down to earth personality. But when it comes to managing our money we review those who spend their lives at it and are successful. If anyone wants to play poker for a living we would suggest they listen to Daniel or Ivey.

    2. fredwilson

      there is so much in common between poker and business

    3. Tyler

      If only I could play online legally…..sigh

  8. BillMcNeely

    Using money ball in regards to finding talent, under grads,grads, former stay at home parents and vets is a great way to get horse power to build a business while giving valuable skills and career building opportunities

  9. JaredMermey

    The dirty secret about the Warriors is they don’t really play that small – they just play fast. The only small lineup they feature is their lineup of death which they’ll often use to close out games. Beyond that, Bogut, Festus, Speights or Varajao are generally on the court and they are legit centers. Thy can play the death squad because of Green who is a Charles Barkely with a 3 point shot.As an aside, as good as Kerr has been as a coach, has he yet to make a decision that is as close to as good as not taking the Knicks job?

    1. fredwilson

      we write big checks from time to time too.

    2. JamesHRH

      They play small, b/c Green is their 4 most of the time and, after Steph, the offence runs through him.

      1. JaredMermey

        Draymond has a standing reach of 8’10” bc of his long arms. That is PF territory.

  10. Tom Labus

    Smaller is more nimble and allows you to take shots at things big funds could never look at.Giant funds just seem wrong for start ups too

  11. Mark Essel

    Does this work for consumer applications (freemium/ads) that require a large scale to make business sense?I think small ball works well for b2b (early paying clients), or selling the product immediately for consumer products. Kickstarter (or similar crowd sourcing) is a low risk way to tap into early capital.Is it small ball if the founders invest a good chunk of their own capital?The concept of building a business that never requires a dollar of outside investment (angel/vc/debt) is incredibly desirable. If the small ball exits didn’t need the capital, why’d they accept the investment? Spread the risk?

    1. John Fazzolari

      Consumer is a different game as most B2B cos should be able to generate some type of cash if they’re on to something or in general just capable founders. Still think it’s small ball if founders are investing their own capital/not paying themselves early on- most don’t have the appetite for building a business to do that.Small ball exits like Indeed take on capital at a time where it no longer makes sense not to take on that capital. They are getting a deal that they can’t refuse and also setting up a precedent for multiple regular liquidity events which will lead up to IPO. It’s actually the opposite of spreading the risk as they’ve already built a sustainable biz that is de-risked for the VC

      1. Mark Essel

        Cool on the formerOn the latter, still not seeing the motivation of the company to take the VC money and dilution without need.

        1. John Fazzolari

          Depends on what your definition of “need” is. Here’s an interesting example where founders chose to take on unnecessary capital. If the terms are great and you’re able to maintain control things work out nicely.

          1. Mark Essel

            Fantastic read, thanks for sharing it John!This definitely sounds like derisking “In this funding round, $2m of the $3.5m will be put aside for the two of us”. Taking money off the table to go long. Totally understand this rationale

          2. John Fazzolari

            Exactly. So they did they and now continue to build an amazing company vs an acquisition where they would have made even more money. It’s about keeping control of the company and building something great for the long term!

  12. Mario Cantin

    “It allows me to sleep at night, which is not that easy in our business.”Not sure if this type of humor is ok on AVC, but I’ll try it this once:My father called me about a month ago and told me he had found a trick to help him sleep “hard”, which consisted of taking a sleeping pill in conjunction with a Viagra….”You funny guy you”, I told him.

    1. Jess Bachman

      1. Mario Cantin

        Only once right 🙂

    2. LE

      I don’t get the joke but I note that a few older cohorts do so maybe you can explain the punchline.

      1. Mario Cantin

        French Canadian humor — a little twisted. Plus something gets lost in translation, because in French we say “dormir dur” (sleeping hard) when we mean we were having a deep sleep.Beyond that, please excuse me if I don’t feel like explaining any further 🙂

  13. John Fazzolari

    We are obsessed with playing small ball at Revivn. At first we didn’t have a choice but as our company has evolved we realized that it become part of the culture here. Companies that focus on building amazing, efficient processes can substitute talent with operational excellence. It can be scary at times not to have a large safety net but as the company grows this becomes less of a concern. Think that more people don’t do this because it’s hard and very unglorified as the rewards don’t come for years. If more founders were serious about building long lasting companies vs external validation we would see more small ball as it benefits the founders long term. Hiring talent to cover up a shitty process will come back to bite any company in the ass.

  14. creative group

    Due diligence on the the investment, maintaining controls on your investment principals and the business model if you were correct on your accessments will provide the return desired.Each circumstance may require different business applications and skills. Small ball or Big Ball. If you enter each opportunity or investment with the notepad of mantra’s and think you will hit the same once in a lifetime pot of gold as before you will set yourself up for failure.If your team is what you think they are just shoot the ball like the Cavaliers. Took eleven days to break the Warriors record. Most records in history are made to be broken with exceptions, like Oscar Robertson’s entire NBA season with a triple double. It will not happen in our lifetime people.

    1. pointsnfigures

      The Big O. 6’4″ and an amazing talent. One of the top ten ever to play.

  15. Daniel De Melis

    In the real estate world of property development, how could this be applied? Could Small Ball be ‘Buy-Sever/Re-Zone, Sell ?

  16. pointsnfigures

    Stay small and grow tall. My motto trading. I always found if I kept a boat load of money in my account, I would lose discipline. It’s interesting the parallels between funds and startups. Startups need a lead investor-so do funds. VCs tell funds to raise 12 mos of capital and stay lean-so why shouldn’t funds raise the minimum amount they need to get to where they need to go-forces discipline. It forces discipline on check size, on how much infrastructure and where, on how many companies etc.I did the math. It’s awfully hard to be in the startup fund business and do it with less than $10M minimum. You really can’t for a lot of reasons. Ideally, I think the minimum for 2 partners is $40M-or a rule of thumb, $20M per partner.

    1. fredwilson

      stay small, grow tall, keep it all

      1. pointsnfigures

        the keeping is the hardest part!

      2. LE

        Pigs get fat, hogs get slaughtered.

    2. Seyi Fab

      Jeff, you require even less in markets where the cost to build/grow a startup is even less than it currently is in the US and the return possibilities are high (especially in global cities where US companies looking to go ‘global’ have to enter). A $5M fund (one partner) can do seed to exit investments in 30 companies that are essentially locally customized versions of successful US startups (Duolingo for African or Indian languages, Uber with a cash exchange at the end of the trip in Accra etc). Did a small investment in a company that has 12 employees, is growing in the double digits/monthly and did $1M revenue last year (in a country most investors are afraid to enter) and has a monthly burn of ~$23k. Small ball is big ball depending on the context/country!

      1. LE

        in a country most investors are afraid to enterI would never feel comfortable investing in a country which I was afraid to enter or couldn’t get a seat of the pants feel for (safety or business wise).

        1. Seyi Fab

          ‘Afraid to enter’ does not equate to ‘dangerous’. Sometimes it’s just lack of knowledge/context. Totally agree that comfort levels with ‘where’ play a big part.I’ve worked with/heard of investors who only look at deals within a 3 state radius, even though St Louis is not ‘foreign’ 🙂 It all boils down to comfort levels.

          1. LE

            Well fwiw I remember in the 80’s staying at a beach resort in Jamaica. At night when you went out on the beach there were men with rifles standing guard at both ends of the complex. You never went off the resort at night (say for dinner) it was considered dangerous. We did during the day, but at that point I decided never to return it had that much of an impact on me. [1]Everybody is different about things like this. I prefer to lessen the risk profile with respect to things that involve safety. Then there are reckless Kennedy’s that ski into trees and fly their planes at night without a great deal of experience and instrument ratings.[1] And this was barter and trade and it essentially cost me $0 for a trip like this.

          2. Pierre

            Wow, I toured Jamaica in 2013, it’s definitely a lot safer now.

      2. pointsnfigures

        I agree. Different ways to skin the cat for sure. A lot depends on place, industry, how you want to exit etc-. I was speaking more for US based funds that rely on $100M+ exits to be profitable. Most US angel funded startups exit (if they exit) between $20M-$60M).For angels the math looks like this50% of the companies you invest in will return 020%-40% will return 2x-4×10% have to return 30x to make any real money.Otherwise it’s a hobby.One of the great things about startups is they are much easier to start. One of the toughest things about startups is there is more competition and noise, so marketing costs have escalated.

      3. Robert Rogge, CEO Zingword

        I’m from Minnesota, but I lived in Spain for about a decade and owned a company there. We founded Zingword in London, and our offices are in Croatia for just this reason.Very talented people there, great city, great everything.But 500k seed money gets me a pretty big team of people for two whole years, plus marketing money to boot.I’m banking on that being a competitive situation for VC financing, because the VC gets way more bang for the buck, while the product itself is 100% global.

    3. Robert Rogge, CEO Zingword

      Something like that. But the thing about discipline I’m not sure about, because it seems to me like you shouldn’t invest in startups who won’t be disciplined in any outcome.

  17. awaldstein

    I agree but I also know that this maps to your thesis and who you invest in.Building a platform for the enterprise for example is by definition something that wouldn’t fit your model in most cases and can indeed be a great investment.

  18. JasonBoisture

    I can’t speak from the perspective of a VC, but it seems that a company or a family or an individual that is “well-funded” just does not experience the necessary adversity required to force the learning and problem-solving that lead to future greatness.ADVERSITY -> HUMILITY -> TEACHABILITY -> LEARNING -> GROWTH -> GREATNESSThere’s a reason why the least-funded generation in our country’s history became the Greatest Generation. There’s a reason why I tell my daughters “no” more than I tell them “yes.”I am dog-hungry for my next “teachable moment” when I am forced to learn something that causes me to grow. Even if it costs adversity to get there.

    1. Matt Zagaja

      I once worked for a politician that was fairly well off and whenever we were on the cusp of not hitting our fundraising goals he’d tell me that he’d just cut a check himself instead of putting in the extra work to raise it. I told him the point of fundraising was not just to have money to make expenses.

      1. JasonBoisture

        I have experienced something similar with friends who are in missionary ministry. The smart missions organizations require their missionaries to raise support from donors (as opposed to paying their own way). Creates sweat equity, buy-in and accountability — and more devoted and dedicated missionaries in the field.

    2. Robert Rogge, CEO Zingword

      Unfortunately it doesn’t work this way at all. Sometimes, people who are born with priviledge invest that priviledge and make returns for society.Other times, people who face adversity or are humiliated get beat down and the path to greatness is simply impossible for them. Some kids just turn out wrong, and some turn out right, and whether or not they are spoiled often has nothing to do with it.Startups who raise too much are startups who don’t have a good plan. Because some startups are over-financed doesn’t mean that it’s better to be under-financed. 😉

  19. Jim Peterson

    Limitations focus the mind. It forces priorities. It helps you quickly stop doing things that are not working. And hit hard when you find things that are working.

  20. mikenolan99

    Sleep at night is the best denominator – An entrepreneur friend of mine once said of an investment – “The ROI was great, the return on aggravation wasn’t worth it!”

  21. kirklove

    Ewing is weeping reading this 🙁

  22. kidmercury

    in basketball teams that play small measure the number of possessions they have and the time it takes to get each shot off. by that extension i think small ball in VC is more about making lots of small investments. i think the 500hats approach is more pure small ball.i like to think of USV as like the spurs. elements of small ball but not super fast paced. rather the hallmark is defense (capital protection, risk mitigation). all of which begs the question is fred the kahwhi leonard of venture capital?????if i had more time i’d photoshop a picture of fred’s head on kahwi’s body. but you’ll have to imagine it for now instead.

    1. Tom Labus

      come on, you should do it.

    2. Robert Rogge, CEO Zingword

      Interesting points on business but the thing about number of possessions etc. isn’t really hitting the mark.

  23. Ryan Anderson

    This is a very timely post as I was thinking about this concept a lot yesterday while reading Brad Feld’s “Venture Deals” book. In particular the part about reserving capital for follow-on investments and the attempt at estimating how much follow-on various companies will need.On one hand you have the billion dollar funds who NEED companies that will have multiple rounds at ever increasing valuations so they can deploy their capital, and on the other end you have the micro-VCs who can’t afford to get in to those without the messiness of cross-fund investments or special purpose vehicles to exercise pro-rata.I wonder if either of these will prove to be long-term solutions in the current version of VC, or if we’ll see “mid-size” funds like Benchmark, Foundry and yourself live on in their place. You could (probably correctly) argue that micro-VC isn’t really a longterm strategy anyway and just a way for new investors to get their foot in the door with the goal always being to upsize the next fund size.To continue the analogy, it’s worth noting that small-ball, or any differentiated strategy really (Spurs motion, Grizzlies twin bigs, etc), takes elite talent to pull off with success. By that I mean the ceiling is higher for elite teams to try these things, but the floor is also a lot lower for bad or mediocre teams.

  24. Semil Shah

    We should be more precise in demarking big vs small. Big is clearly above $75M/GP, but small can mean different things to different people. One “small” could be $100-300m funds with $35-75m/GP, but then there are many (too many?) funds under $100M, and it’s often not efficient for many LPs to invest in these vehicles. So small ball at over $100m with ownership targets and pro rata rights and information rights is a great strategy and can give back more restful nights, but going smaller may not be a great strategy either.

  25. Asim Aslam

    Very intrigued by this line of thinking. I’m at that very early stage where its a question of continuing to grind or raising capital to accelerate the next phase. I find myself going back and forth on this a lot. Having worked in both bootstrapped and VC backed companies that went through their ups and downs its easy to argue the case for both sides. I’m a strong believer in making every penny count and just as Fred mentions would feel rather uneasy with having to return large amounts of capital without a solid game plan.Good post Fred.

  26. LD Eakman

    My favorite quote that I heard upon the closing of our fund – “Congratulations, now you owe somebody $XXX million!” Hadn’t really thought of it that way, really took the shine off a fund closing and refocused me on returning the fund. Good perspective for any fund manager.

  27. Daniel Arnold

    Fred, how do you as the investor get paid if these companies never go public… do they issue dividends?

  28. sigmaalgebra

    Good thoughts.Why “small ball”? Because brains are more important than muscle.We now have a good example: E.g., and here being non-political, Trump just got the Republican nomination while spending a total of about $40 million. So, let’s get some related and relevant lessons from that.First, in dollars per vote and dollars per delegate, that has to put Trump way, Way, WAY, WAY ahead of everyone else on the stage at the first Republican debate and, in addition, no small thing, he won.That is, note: Winning is difficult, and he won. It is easy to think that spending the most per vote and delegate — that is, muscle — would help in winning. E.g., the candidate tells the donors, “Yes, it is expensive. But we need to understand I’m going for a win against 16 other people, and that’s not easy.” — would have sounded good as an excuse.But, while winning, Trump spent the least — maybe I should say that again [drum roll, please] by far the LEAST — per vote and per delegate.Or, smart money donors, Jeb! spent, what was it, $160 million or so of YOUR money, got, what was it, a total of 4 delegates, spent likely by far the most per vote and per delegate, “Gee, Ma, $40 million per delegate?”, and lost. Trump spent $40 million in total, of HIS money, has to date 1000+ delegates, and got ballpark 4 million votes for about $40,000 per delegate. Now, smart money donor, who looks smart?To be clear, Trump beat Jeb! in dollars per delegate by a factor of three orders of magnitude, that is, ballpark 1000. In financial terms, we’re talking high ROI and exit value!Gee, with Trump, the media is looking at a political version of a combination of Steph, LeBron, and Kobe and wants to claim that Trump’s only advantage is trash talk. Brain-dead media. We were talking about brains versus muscle, right? So, brain-dead media. In a word, “disgusting”.Gee, hint: Bobby Knight said that Trump could play for him. Knight gets it.Note also the value of Trump’s brains: E.g., go to the donors of Jeb!, etc., and ask them how they feel about the checks they wrote to the losers? They bet with their checkbooks and lost. And having thick checkbooks, likely they weren’t total dummies, but this time they had a lot more in money than brains.What was it? As athttp://www.thegatewaypundit… $75.7 Million on 64,000 Negative Ads to Take Down Trump – It Wasn’t EnoughJim Hoft May 3rd, 2016 10:25 pm So, that was $75.7 million from people with more money — muscle — than brains.To paraphrase some common VC remarks, muscle is easy, plentiful, and worthless. Brains are difficult, rare, and everything.Conclusion: Trump is a smart cookie. He has it where it counts — brains.Second, if all the pundits had been lined up end to end, it would have been a good thing. And all of them would have been right just as often and made gobs fewer mistakes if they had just taken a vacation and said and wrote nothing. Wow! Just as good, saying and writing nothing!The pundits have been getting paid for doing worse than nothing? They, including all the ones at the conservative National Review, are on what, welfare state entitlement spending?E.g., as at…Nat Silver with If you’d told me a year ago that Trump would be the nominee, I’d have thought you were nuts. Don’t just take my word for it: Read what I wrote about Trump in July or August or even in November. actually STILL totally, 100%, utterly fails to get it.Conclusion: Trump is a much, Much, MUCH, MUCH smarter cookie than all, All, ALL, ALL the pundits.Lesson: When have Michelangelo painting the ceiling, don’t ask for ideas from a lot of house painters or worse. Or, when have Steph Curry shooting threes, don’t have some coach of the Junior High Hoopsters talk to him on how to hold the ball.Or, when have 17 competitors, the winner stands to be someone exceptional, and, the more exceptional that person is, the more difficult it will be for all the rest to understand, appreciate, and accept what the exceptional person is doing. Or if lots of people could understand it, then it wouldn’t be exceptional.Off topic, politics: For Trump’s VP, I propose my Congressman, Chris Gibson, Ph.D., Colonel, US Army, retired, Member, House Armed Services Committee, this year voluntarily leaving office to honor a promise of a self-imposed term limit and to return to teaching. I could never sleep at night if USV were managing a billion dollar fund. I don’t know how we would ever get our LPs back their money plus a return. As an entrepreneur, if I raised a big pile of equity funding, then I could never sleep at night knowing that entertaining the BoD would take 200+% of my time. Before the funding, when I could use the help, they would treat me like “The Little Red Hen” in Mother Goose. And after they wrote me a check, they would treat me like the goose that laid the golden egg, that is, choke me to death trying to get more golden eggs faster. They’d fire me before my stock was vested. Then the investors would own 100% of my work, and I would leave broke and without my work. And, the BoD, not understanding anything significant about the business, that is, like the donors of Jeb!, short on brains, would soon ruin the business.I remember well: From one of the world’s best research universities, I got my Ph.D. in applied math. But at the end of the eighth grade, my arithmetic teacher took me aside and fervently advised me “Never to take any more math” and explained that I didn’t have to and in high school could take high school arithmetic. She was wrong. Wildly wrong. She didn’t understand anything at all about math or talent in math. All she was seeing was, as for a significant fraction of boys in the eighth grade, my handwriting was a disaster so that in my arithmetic exercises my columns of digits didn’t line up vertically and I got wrong results.Math? I took all I could in high school, and one summer got sent to an NSF program in math and physics. It was a good high school — e.g., MIT came recruiting and the year before me three guys went to Princeton and ran against each other and some fourth guy for President of the Freshman Class. In that high school, on the Math SAT, I came in second, just behind the Jewish guy who went to Purdue and just ahead of the Jewish guy who went to MIT (the Jews in town knew very well where the best high school was; so did my father).Reading my Math SAT score, the counselor, who had also been my sixth grade teacher, said There must be some mistake. That’s, that’s, uh, that’s very good. Yup, there had been some mistakes. The teachers had usually treated me with such utter contempt that I’d long since given up on trying to please them. The teachers, essentially all women, really liked the girls; I most definitely was NOT a girl! There was an exception: In eighth grade science, the teacher was the football coach (no, feminists, the coach was a man — sorry ’bout that), thought I wasn’t paying attention, and asked me a question. I sat up from my nap, closed my eyes, visualized the situation, read off the answer in deliberately excessive detail, and he never bothered me again.But, since I’d given up on pleasing the teachers, I had little interest in doing assigned homework. So, in ninth grade algebra, the tests were open book, and I learned the material just on the test, made As, and got sent to a math tournament. Did no homework, made As, and got sent to a tournament! The next year was plane geometry, more fun than eating caramel popcorn (unless with a really pretty girl); again, I ignored what the teacher assigned for homework but, instead, did, with great joy, all the non-trivial problems in the book. At the end of the course, I took a problem from outside the class and asked her if my solution was correct. She said “You can’t do that.”. I’d just reinvented the advanced technique similitude and shown it to her — she didn’t get it.Yup, there had been some mistakes.Yup, the Math SAT score was good. Sorry I never studied for it. In college, I taught myself freshman calculus and then started the course on sophomore calculus, at a good college with a terrific math department. There I got a copy of the classic Kelley, General Topology, taught it to myself, and gave weekly lectures to one of the profs. My honors paper was in group representation theory for the quantum mechanics of molecular spectroscopy. My GRE math knowledge score was 800. I was sent to an NSF math program.Applying to grad school, I got into Cornell, Brown, Princeton, and more.H. Kuhn and A. Tucker were profs at Princeton and in mathematical optimization did the Kuhn-Tucker conditions.There in grad school, I saw a question in the Kuhn-Tucker conditions and in two weeks found an answer and later published it in JOTA. My work also solved a question in the famous Arrow, Hurwicz, Uzawa paper in economics. For my Ph.D. dissertation, I identified the problem before grad school, did the research independently in my first summer, and finished the work with no faculty input. An A. Tucker student and Member, US National Academy of Engineering approved the work for the university.What I did in math was definitely exceptional.The eighth grade teacher was wrong. Really, we can’t expect an eighth grade teacher to be able to evaluate research level math talent.In the eighth grade, I had to report to an arithmetic teacher who didn’t understand my potential. So, what about me, an information technology entrepreneur, reporting to a BoD of mostly information technology VC equity investors? Can they understand the potential of my work? And if they can’t understand the potential, then they will be like that eighth grade arithmetic teacher who didn’t understand the potential and conclude that there is no potential? Bummer.Gee, for Trump, now it’s easy to say that he will win the Republican nomination. NOW it’s easy, because he’s already DONE it. The real challenge, though, was seeing this future 2, 4, 6, 8, 10 months ago when Trump started spending millions of dollars of his own money, putting thousands of miles on his airplane, neglecting his business and family.Gee, Indiana: 57 delegates available, 57 delegates won. That’s a closeout or some such, right?Ah, I like victory in the morning: Is smells like a good Vichyssoise, a charcoal broiled Porterhouse steak with Sauce Bordelaise and Chambertin, a nice green salad with Sauce Vinaigrette, some semi-soft French cheese, sour cream butter, and French bread, and a dessert of sweet champaign with a cake soaked with orange Grand Marnier!Trump was going for something exceptional, and what he was doing, really right out in the open and not buried in some proprietary software locked up inside a server farm, was exceptional and beyond the understanding of essentially all the donors, politicians, and pundits.And, now, have the pundits started to understand? Nope: Just look at what Nate Silver has said. There are plenty of pundits that claim that Trump has no chance against Hillary. We’re talking some really slow learners, here. It’s a brain problem. Why? Because they still don’t understand HOW Trump does it. Not many pundits are as good at politics as Bobby Knight is at both basketball and politics.Trump and Knight are exceptional, and the pundits, donors, and other politicians are not.Gee, my work has always been in information technology, that is, take in data, have a computer manipulate it, and report hopefully valuable results. For the manipulations, get those from some math with theorems and proofs where those two provide more powerful manipulations and some quality guarantees.In our civilization, it’s possible to get such work, including original, novel, advanced work, in information technology reviewed quite carefully. Such reviews are crucial for evaluating the potential.So, I would need a BoD that could evaluate the potential of some such exceptional work. Can I expect that? The NSF, DoD, and plenty of high end research universities can do such evaluations of potential.But what about the information technology investors, can they do such evaluations or are they stuck back with my eighth grade arithmetic teacher?Let’s see: In fields of information technology, do they hold a Ph.D. from a good research university? Can they qualify as a problem sponsor at NSF, ONR, USAF Cambridge, or DARPA? Can they qualify for a research university tenure track position? Have they published peer reviewed papers of original research? Are they qualified to be a journal reviewer, editor, or editor in chief? From what I’ve seen, for all the information technology VCs in the US, could hold a convention in a Piper Cub of all that pass even one of those criteria.With high irony, those VCs and their LPs are necessarily looking for what is exceptional in information technology, but essentially none of those people are qualified to evaluate or direct the evaluation of the potential — even the routine potential, much less the exceptional potential — of such work.Gee, we have to be reminded of the hopeless efforts of the donors, politicians, and pundits to evaluate Trump 2, 4, …, 10 months ago. Disaster.Right, in politics, if there is no Trump in the race, the donors, politicians, and pundits can look smart. That is, they are okay until someone exceptional is in the race. Same for VCs and entrepreneurs?Since with the equity investors we have people without good qualifications in information technology looking for work in information technology that has exceptional potential, we have to expect that the corresponding batting average will be low, and it is:…Indeed, the batting average is so low that any entrepreneur who is offered an equity check should give up on trying to be exceptional!Ah, the eighth grade! Many of the girls were world-class drop dead gorgeous — face, hair, full skirts, terrific figures, tight fit above the waist, great smiles. Gorgeous.Youth is such a wonderful time of life. Too bad it is wasted on young people.And I’m sure 100% of them did better in the arithmetic than I did. And I’m sure that none of them did even dip squat in math, say past calculus. Those girls had a lot going for them — DAMN were they pretty — but they were not exceptional in math.Gee, I could have tutored them in some of modern math: “Honey, in math, functions are just crucial, and there are three cases, injection, bijection, and surjection. Now where would you like to start?”. Naw, I wouldn’t do that! But DAMN they were gorgeous!Reporting to a BoD of equity investors trying to evaluate the potential of my work, no way could I sleep at night.My business is like what Trump just did in that the goal is just totally dirt simple to understand. Then, 100% of the question is just how the heck to do that, with high reliability? How? Well, don’t ask Nate Silver, or any pundit! In this case, the key is some math.Sure, I could give a BoD a lecture on the math. But there is little more painful than sitting in a math lecture where don’t understand a single word being said — unanesthetized root canal procedure. Too soon the BoD would leave a brown trail on the furniture and floor rushing to reconvene in the little boys room, and we would need major interior redecorating. The BoD would also vote me out of the company. I was showing them a major technological barrier to entry, but they ran off to the boys room instead. Bummer.Now, if I had one heck of a good term sheet and 51+% of all the stock and for Board meetings the Members were eager to pay for their own expenses and also help out pulling cables in the server farm, installing hard disk drives, running the vacuum cleaner, carrying out the trash — that is, being useful doing work I do — maybe! I could also ask them to desk check some code, type in the TeX word processing for the math for the ad targeting — naw! Better limit them to pulling cables! I know; I know! They could handle the accounts receivables, clean up the inventory records, get us clear on the capital expense depreciation, and collect some ideas on the taxes! If they did well, they could call in sales engineers from Microsoft and Cisco and do some good, first cut investigation of site security. Anything crucial for the business? Maybe not.Ah, so many millions of people ready to stand in line for hours to attend a Trump rally, and so few donors, politicians, and pundits ready to understand it. So much data to manipulate and valuable information to produce, and so few in Silicon Valley to understand it. Must be in the nature of things — nearly everyone is nearly as bad as possible and still be alive at all.Ah, to recover from this nonsense, forget about that eighth grade teacher (she had a daughter just my age and just gorgeous, with a great smile and a spectacular figure), and get back to work (alpha test of 80,000 lines of typing), trying Daniel Barenboim plays Beethoven Sonata No. 8 Op. 13 (Pathetique)… The favorite second movement starts at about 9:40.Beethoven, Barenboim, can’t go wrong.It’s good. Quickly “Knits up the ragged sleeve of care.”Ah, to both good sleeping and good results! Some of the best deals are ones you don’t make — maybe someone said that.Gee, slept just fine last night — no BoD. Trump doesn’t have a BoD, either. Gee, all the donors, politicians, and pundits would have said to him, spontaneously and ceaselessly, “You’re fired!”. I suspect he knew that. Might learn from that.For more, at… Rachmaninoff: Piano Concerto no.2 op.18 – Anna Fedorova – Complete Live Concert – HD with the famous part, haunting, ethereal, as if seeing a better world, starting at about 12:00.

    1. LE

      I will read this in detail later but a feature that disqus should have (as if something like this would ever happen) is the ability to post a long well written comment as a blog post (somewhere). If it was posted as a blog post it then could be submitted elsewhere (say HN) and perhaps garner more views.Another thing disqus should do (that I’ve mentioned previously) is cull comments for info that can be used both by the media and for opposition research. They could charge for this. Of course there is nothing to prevent a private company from packaging this info for that matter.

      1. sigmaalgebra

        Ah, wow.For now, I don’t want to be a public person. A few people at AVC know who I am, but otherwise I’m anonymous.

  29. george

    I really like the analogy along with your philosophical business approach. Small ball can accomplish big things simply by executing differently – they buy into one another, rather than the ambition of size or fame…it’s built in their operating code.

  30. 594Reptilian

    The analogy with small ball is wrong; it’s not even apt here. Small ball is anchored around a speedy, run-and-gun offense, to get the ball from one baseline to the other side in less than 8 secs (it’s not always “shoot the ball ASAP,” but you get the picture). On offense, it preaches shooting a lot, and letting the sheer volume of shots overwhelm their opponents. Even on a bad shooting night, the average field goal attempts/made ratio is likely to mean a win for the small-ball team. And this is where the analogy falls flat.What is the key to a successful small-ball operation? Very accurate shooters like the Splash Bros (Curry and Thompson for the Warriors, for ex.) In investing, it means you make a lot of investments (shot attempts), and a lot of those turn out to be profitable hits. How the heck can you be a small VC, make a lot of meaningful investments and come out a winner every time? When you are cherry-picking companies that have little or no need for VC funding, then that skews the data and invalidates the small-ball analogy. NBA teams don’t have the luxury of picking who they play. Everyone plays everyone, the only limiting factor being geographic (ie., Eastern teams play Eastern opponents more often than Western ones).More importantly, basketball (pro or not) is a very closed system, with a limited number of variables to account for (travel time between games, player minutes, playing strategies, etc)—but all of these can be accounted for weeks or even months before teams meet. You don’t get that option in an investing environment. The variables are unknown by the players themselves—both investors and entrepreneurs, and that is why you see, despite the diligence done on young companies, that VCs generally have such a dismally low hit rate. It’s still largely a spray-and-pray approach.

  31. Sujit Kalidas

    Fred, how often have you been in the situation where you’re “begging / persuading” a founder to take your money and don’t end up doing the deal because the terms/valuation are not palatable? The founder has all the power in that situation (and rightly so because their business is awesome!)

  32. Ana Milicevic

    Like any good strategy, small ball works for the teams that can play it/implement it well. Not all teams can – nor should all teams blindly subscribe to the same playbook, small or otherwise. My biggest gripe w/ the collective zeitgeist on entrepreneurship and scaling is exactly that prescriptiveness of big ball tactics: not everybody wants to be (capitalized as) a unicorn and there are so many more ways of winning than on-paper valuation creep. Doing things differently may be short-term riskier but tends to pay off longer-term.

  33. Robert Rogge, CEO Zingword

    Thanks for the nice post. Basketball and Business is perfect for a Saturday afternoon. :D1. I think the critical thing about the Warriors is that Draymond Green is somehow able to guard bigger players, so even when they are playing small ball, they are able to defend big. In a startup, I think that means building a team that punches over their weight class, because you can’t stay small and tear it up unless you’re really smart and work really hard.2. We’re launching this summer in translations, the first real translation marketplace (there are some pretenders). Our goal is to get translator signup traction, and meet conversion goals with buyers, both of which are looking good in this early stage. I think we could raise 500k for a robust runway of about two years, or we could raise a bigger round and somehow try to use that money to go faster.- I call this “too big to bootstrap.” Some businesses like Zing, even with a clear business model, require some external capital because otherwise you realistically couldn’t bootstrap all the way to revenue.- Is there a curve somewhere for tech startups that shows at which point you’re just throwing money away or spending it too early?- I’m expecting copycats, and it seems to me like the bigger my war chest, the easier it will be to stay three steps ahead of them at all times. But is that really true?

  34. Jack Holt

    I’m sincerely happy to read this b/c it precisely aligns with what I’m (eventually) going to need. Thank you.

  35. timrpeterson

    Fred I enjoy your posts greatly – thank you – and please don’t internalize this, but the last line about not being able to sleep is depressing. Ideally humans can’t sleep because they are taking care of other humans in need or because they are so enjoying themselves so much doing something they don’t want to sleep. I really wish worrying about money for people who don’t need it wasn’t something that makes people lose sleep.


    great read. Agree

  37. LE

    on some sadistic level I am jealous that my father used to get beaten by his father from time to timeWell I have to ask why in the world would that be?

  38. creative group

    Andrew Cashion:thank you for highlighting that. The bashing of women is becoming to common and the norm and we will not accept it. We admit the Trump factor of degrading, disrespecting, belittling, etc. had a role in our response. Some things just can’t be acceptable and can’t become the norm no matter the source. Small wieners are attempting to overcompensate.