One upfront remark: I do not recommend to invest in Venture Capital right now. The market is clearly overheated and the asset class is known to be very volatile although Warren Buffett’s Todd Combs seems to just have discovered Fintechs.
This post is ment as a “long-term perspective” view on the sector and not a buy recommendation in the current environment.
How to invest into Venture Capital as a Private Investor
Famous VC funds
Venture Capital, i.e. the industry funding (technology) start-ups is known that almost everything depends on relationships.
It is no secret that a few funds like Sequoia or Kleiner Perkins have produced outstanding returns but these funds are “invitation only”, there are little chances even for larger institutions to invest in them and for individuals without direct connections it is more or less impossible to get in.
This is not investment advice. Please do your own research and don’t follow any anonymous bloggers.
Let’s continue with this nice “anti Buffett” stock from my post last week.
The people / founders
FitBit’s original founders from 2007, James Park and Eric Friedman are still on board.
Interestingly, although both ar only 41 years old, FitBit was the third company they founded together.
The other companies were Windup Labs, a photo sharing company they sold in 2005 and Epesi, a B2B software company that didn’t work out.
Although I wrote a lot about Watch companies over the past few years (Swatch part 1, Swatch part 2, Hengdeli, Fossil part 1, Fossil part 2, Movado, Richemont), no investment came out of it. However I had a lot of fun researching these companies so it was time well spent.
When I initiated the series in 3 years ago, Smart Watches were a big thing and especially the Apple Watch was perceived to be the “Swiss Watch” killer, which, as we know now didn’t happen as they seem to coexist quite well.
Besides Smart Watches, Fitness Trackers were the “hot shit” and especially VC backed FitBit that IPOed in 2015 was taking oer the world.
This chart shows Fitbit against Fossil (blue) and Richemont (green) and we can clearly see who had staying power and who not:
-Performance 6M 2018:
In the first 6 months of 2018, the Value & Opportunity portfolio gained +1,45% (including dividends, no taxes) against -2,88% for the Benchmark (Eurostoxx50 (Perf.Ind) (25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%)).
Some other funds that I follow have performed as follows in Q1 2018:
Partners Fund TGV: +4.68%
Squad European Convictions +2,22%
Ennismore European Smaller Cos +1,72% (in EUR)
Frankfurter Aktienfonds für Stiftungen -0,54%
Evermore Global Value -0,39%
Greiff Special Situation -0.92%
Squad Aguja Special Situation -5,45%
Paladin One +1,8%
Disclaimer: This is not investment advise !!! Do your own research !!!!
The guy who wrote this post just lost a lot of money with his Silver Chef position. You might even consider shorting his recommendations 😉
When I looked at Expedia almost exactly one year ago as part of my 2017 Travel Series my key take negative aways were as follows:
– CEO has super high salary (90 mn USD in 2015)
– top line growth, operating profit stagnant
– expensive acquisitions in 2015/2016, number of shares and debt increased significantly
– reported growth numbers not adjusted for acquisitions in investor presentation
– lots of share options
Additionally, the stock looked expensive:
At 119 USD per share, Bloomberg tells me that they have a trailing P/E of 54, an expected 2017 P/E of 22,3 and an EV/EBITDA of ~16. This means that a lot of growth is already priced in.
As we can see in the chart, the stock became at first even more expensive before dropping back to a level of around 100 USD / share: