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Everyone is an Investor
Everyone with an entrepreneurial career – from investors, to founders, to startup employees – are investors. We can learn a lot from investors on building entrepreneurial careers.
Hi - I’m Mike Wilner, the writer of this post which is part of my weekly newsletter, Getting Shots Up. The newsletter includes frameworks, analyses, and profiles about building entrepreneurial careers. This isn’t just startup advice – it’s a zoomed out view of how entrepreneurial people can think about constructing a career that results in a lot of high quality shots on goal.
If you’re in the middle of en entrepreneurial career or want to start something down the road, consider subscribing:
When I made the decision to wind down my startup in 2018, I was faced with a difficult task: informing all of my investors that they would be receiving cents on the dollar. Investor relationships were a source of anxiety for me. From 2015-2018, I lost more than a few hours of sleep worrying about letting investors down. When I broke the news to them, I was shocked by how in-stride they took it. Here was the response from my biggest investor who invested $225K:
It’s a tough decision and it sounds like you thought it through pretty well … Glad you made the decision in a decisive way…Have a happy holiday with some good drinks!
I had assumed that they cared about the success of the company just like I did. But the truth was that I cared way more than they ever could. That’s when it hit me – my two co-founders and I were the biggest investors in our startup, by far.
Money is not the only resource that gets invested in the world of entrepreneurship. Whether we’re writing a check to invest in a startup, joining a startup as an employee, starting our own startup, or advising a startup, we’re investing some combination of time and money – finite resources that once invested into something, cannot be invested elsewhere.
Therefore, anyone involved in the startup ecosystem who is building an entrepreneurial career – from investors, to founders, to startup employees with entrepreneurial aspirations– are investors. If an investor’s job is to maximize the returns of their portfolio throughout their career, then that is true of everyone building an entrepreneurial career.
The job of an investor boils down to three things:
Building investable capital: raising money that can be used to make investments
Build value-adding competencies: Building competencies that make them a value-adding investor (network/audience, skills, domain expertise)
Constructing a portfolio of investments that maximizes return: Make investments and construct a diversified portfolio that maximizes returns by assessing potential upside and risk.
It follows that building an entrepreneurial career boils down to the same three things (with one bonus):
Building investable capital: Building financial capital and savings that enables us to invest our time and/or money into ventures.
Build value-adding competencies (aka Building Entrepreneurial Assets): Building entrepreneurial assets that make any time we invest in something more valuable (thus making you a value-adding “investor”), including Network/Audience, Skills, and Domain Expertise.
Constructing a portfolio of investments that maximizes return: (1) Make investments where the returns build investable capital and entrepreneurial assets, (2) construct a personal flywheel with investments that accelerate the accumulation of entrepreneurial assets, and (3) assessing risk and de-risking investments.
Doing #1 through #3 sustainably: None of this matters if our portfolio doesn’t make us happy. Portfolios for entrepreneurs should be net energy producing.
Embracing this view – that everyone (including ourselves) is an investor – causes some mental shifts that make entrepreneurship a bit simpler:
Recruiting and fundraising go from exercises where we’re trying to “win” a transaction with someone on the other side of the table to frank conversations where we’re on the same side of the table.
We only have one single narrative that we have with various “types” of investors (ourselves, investors, employees) that creates alignment rather than having different narratives for different types of stakeholders.
We can frame decisions about how we are investing time more thoughtfully to construct a portfolio of “investments” that maximizes returns
We can make decisions about how concentrated or diversified we want our portfolio of investments to be throughout our careers.
To better understand the impact of this framing, let’s take a look at how an entrepreneurs’ investments and returns are measured.
The True Value of Investments
The value of any investment an entrepreneur makes includes two types of assets:
Investable assets: Assets like time and money. They are finite and once invested, cannot be invested elsewhere. Therefore, they have opportunity costs.
Entrepreneurial assets: Assets like relevant network/audience, skills, and domain expertise. These are built up over the course of an entrepreneur’s career and are invested wherever time is being spent. Entrepreneurs can take these assets with them wherever they go, and investing them does not deplete them.
Usually, we think of investments based on the investable assets (dollars invested). But the true value of an investment not only accounts for the money invested, but also (1) the opportunity costs and (2) the value added.
True Investment Value = Investable Assets Invested + Value-add
Investable assets invested = Opportunity Cost of Time + Capital invested + Opportunity Cost of Capital
Value-add = Relevant Entrepreneurial Assets x Concentration
Diving into the first part of the equation (Investable Assets Invested), the math proves what I learned after winding down my startup in 2018. Based on the Investable Assets Invested alone, my co-founders and I really were the biggest investors in the company when factoring in the opportunity costs of our time (the difference between market salaries and what we were paying ourselves).
The investable assets invested from the three founders was greater than half ($520K) of the external capital invested ($900K)
My technical co-founder alone was just $28K shy of investing as much Investable Assets as our biggest external investor ($240K vs. $268K)
Even employee #6 who was with us for 1.5 years had invested more Investable Assets than over half of the investors on our cap table ($60K)
The second part of the equation, “Value-add,” is the value investors provide through their entrepreneurial assets – their audience/network, skills, and domain expertise. Bringing those assets to the table is one thing – putting them to work for the company is another. Investors will put their entrepreneurial assets to work based on how concentrated they are on a company.
Concentration is a function of the percentage of their investable assets (time and money) that they invest. For example, while an investor writing a $200K check may seem like a big deal, if they have $40M in the bank and are only going to spend 2% of their time helping, then their concentration is somewhere between 2-5%. That’s low compared to a founder’s concentration, which may be around 90%, an early employees’ concentration, which may be around 70%, and even a scrappy angel investor who may be spending 5-8% of their time helping.
This gives a truer understanding of the value of an investment beyond money.
Suppose Investor A invests $225K in capital and commits 2% of their time (like my biggest investor). Investor B is a small strategic angel writes a $25K check, commits 5% of their time, brings an exceptional network/audience to the table, and has deep domain expertise on the space of the startup. If we score the value of their entrepreneurial assets that they bring to the table, we can see that while Investor A is investing ~4x as much money, investor B is adding ~4x as much value. Despite a $200K difference in the money being invested, their investments are roughly the same in true value.
Just like true investment value is more than just money, the expected value of returns goes beyond money as well.
True Expected Value of Returns
When people invest their time and/or capital into anything, there’s an expected return. Beyond financial returns, the investments we make with our time and money can also generate returns in the form of entrepreneurial assets (Network/audience, skills, domain expertise), which can be carried with us throughout our careers.
Here are some examples of investments of investable capital (time and money) which have returns in entrepreneurial assets:
If someone becomes an active angel investor, outside of financial returns, they can use angel investing to grow their network/audience by meeting and working with impressive founders.
Joining an early stage startup might come with a lower salary than joining a big tech company, but if the job is going to include community-building and starting a new podcast with a built-in audience, then the job could help someone grow their network/audience much faster than they could at a big tech company.
If an aspiring founder wants to eventually build a startup in the FinTech space but feels like they don’t have sufficient domain expertise much about FinTech, then joining a Series B-backed FinTech startup would result in a huge leap in that relevant domain expertise that would help them build a FinTech startup
When asking anyone to invest time or money into something (including ourselves), we should be thinking about the expected returns.
True Expected Value of Returns = Expected Capital Returns + Expected Entrepreneurial Asset Returns
Expected Capital Returns = (Investable Assets invested x Potential Return Multiple x Probability)
Expected Entrepreneurial Asset Returns = Current Entrepreneurial Assets x Potential Return Multiple x Probability)
A personal example
When I joined the Startup team at AWS two years ago, it wasn’t the only opportunity I was considering. My career move came down to a fork in the road between two great options: joining AWS or joining a recently Series B-backed food startup and being the GM of a product line.
The decision came down to this: the expected capital returns of joining a big tech company (salary + stock) were higher than joining the food startup (no surprises there). If the Expected Entrepreneurial Asset Returns could make up the difference, then the two options would be on an equal playing field. This is how the Expected Entrepreneurial Asset Returns entrepreneurial assets broke down for me:
Network/Audience: Advantage AWS. With AWS, I’d be working with founders and investors in the startup ecosystem every day to grow my network in the startup ecosystem. With the food startup, I would build close relationships with strong operators, but would likely not grow my network in the startup ecosystem.
Skills: Draw. With AWS, I’d develop operational skills from the operational rigor of Amazon. With the food startup (which was also operationally proficient), I would learn from some great operators and own a profit + loss (P&L) for a product line.
Domain Expertise: Slight advantage AWS. This was a slight advantage to AWS. With the food startup, I would gain domain expertise in CPG, which I felt valuable but didn’t have conviction that I needed as an asset. With AWS, I wasn’t sure how much domain expertise I’d build in cloud computing, but it was more likely to be a relevant asset down the line.
While these were both good options for me, at the end of the day, both the Expected Capital Returns and Expected Entrepreneurial Asset Returns were higher for AWS, and therefore the True Expected Value of Returns was higher as well. The decision was clear.
But we can’t expect any single investment to give us all of the things that we need. That’s where portfolio construction comes into play.
Portfolio Construction
While building a startup is all-encompassing, experienced founders often find ways to diversify their investments beyond their 80-90% concentrated investment in building their startup. On the most extreme end of this spectrum, there are examples of founders of relatively early stage startup in Silicon Valley where the founders are running venture funds on the side (I personally wouldn’t do this).

Whether we’re currently building a startup or working for someone else, thinking about portfolio construction and the way that we can build assets throughout a career has a few benefits:
Filling gaps: Some investments (like our full-time jobs) may not generate some of the returns in entrepreneurial assets that we’re looking for (e.g. growing network, building certain skills, etc.). We can make intentional investments elsewhere in parallel that fill those gaps, rather than thinking about careers as a series of sequential investments.
Playing with the dials of concentration: If we have investments that are producing high returns, then we can choose to increase our concentration and double down to maximize our overall portfolio returns. If we hit points of diminishing returns with some of our investments, we can slightly divest and diversify into other areas.
Managing overall risk profile: Some of our investments may be riskier than others. Rather than it being all-or-nothing (building startup or working for someone else), we can take a more nuanced approach, hedge risks, and dial our overall risk profile up or down based on where we are in our lives.
There are two things we can do to optimize the returns of our portfolios: (1) create personal flywheels and (2) assess and de-risk investments.
First, we can create personal flywheels with these investments, where the returns of one investment automatically increases the value of our investment in another, resulting in the compounding growth in our entrepreneurial assets. I explained how this works in my recent post, Creating personal flywheels to grow entrepreneurial assets.
In that post, I broke down Brian Bosche’s flywheel. He’s currently the product owner for marketing and creative solutions at SmartSheet. His day job requires that he get feedback from marketers and creatives about their workflow and use those insights to inform the Smartsheet’s product direction so they can grow within the marketing and creative segment. He has two side hustles where he’s investing his time outside of his day job:
Side hustle #1: CreativeBTS: A weekly podcast that goes behind the scenes with marketing and creative leaders
Side hustle #2: Building a social media following by creating content at the intersection of basketball and photography/videography tips (amassing 320K+ tiktok followers, 13K twitter followers, 20K+ instagram followers)
The way Brian has constructed his portfolio of investments is helping him build Entrepreneurial Assets quickly.
The second part of managing and optimizing a portfolio is assessing risk and de-risking. Good investors are good at assessing risk. One of the things we can to to maximize the expected returns of our portfolios is focusing on making investments with the lowest risk possible and find ways to de-risk our current investments. Michael Karnjanaprakorn (the founder of Skillshare and Otis) says it best:
I’ll be diving into de-risking in the next few weeks.
If you have any comments, questions, or feedback on this, please reply! I’ve been answering every email that I get.