I’ve read two books by Michael J. Mauboussin, an investor and a professor at Columbia University. I’ve enjoyed learning and trying his frameworks, especially the expectations investing framework. Another concept he wrote about was the investment premortem, an analysis you do before you invest when you’re objective and your mind isn’t anchored (as it will be after you’ve already invested).

To create this document, you fast-forward a year or so and pretend your investment has failed. You then list all the possible ways the investment ended up in that worst-case scenario. Most people naturally focus on what could go right and their own belief that an investment will work. The goal of the premortem is to get you to consider negative alternative outcomes and ways to mitigate them.

This approach caught my eye, and I want to try it. Thinking in terms of scenarios and the probabilities of those scenarios occurring is something I’ve noticed successful entrepreneurs and investors doing. I’ve started doing more of it, but I want to improve. This premortem idea seems like a great way to force myself to crystallize my thoughts about scenarios that are the opposite of what I hope happens. And it’ll likely help me have more confidence in assigning probability weights to the bad outcomes that I don’t expect.

Venture capital firms have a dilemma: there’s no exit for their founders. I read about Georges Doriot’s VC firm, American Research and Development Corporation, being publicly traded (see here). But being a public company ended up causing issues, and Doriot merged the firm with a conglomerate in 1972. Since then, VC firms have been private, and there hasn’t been a market for buying or selling them.

Today, that changed. I read this article, which says that Goldman Sachs is buying Industry Ventures (IV) for a reported $665 million plus an additional $300 million based on performance. IV has about $7 billion in assets under management. This is interesting because VC firms weren’t considered assets that could be sold. Their founders’ wealth came from carry (profit-sharing) and management fees.

I’m curious to learn about the details of this transaction and see how the market reacts to it. If VC firms become assets that can be bought and sold, I imagine we’ll see a shift in the strategies and actions of founding partners of VC firms.

I had a good conversation with a friend this week about the number of recent IPOs. He’s a physician, so this really caught my attention. If someone who isn’t a professional investor or entrepreneur is noticing the increased activity, it’s noteworthy.

I’ve noticed the uptick in IPOs and public market investors being receptive to buying shares in these companies over the last few months. Several companies have sold shares above their target range, meaning the company’s valuation and capital raised were more than anticipated. Positive signs like that excite entrepreneurs and investors to pursue more IPOs.

Though the IPO market is picking up, we’re nowhere near 2021’s gargantuan levels (see here). I’ll dig into the year-to-date IPO stats and share what I find. The end of Q3 is right around the corner, so I’ll likely wait until then.

Yesterday, I shared why I love what Andrew Carnegie said about why you should put all your eggs in one basket, which is counter to how most people think. It’s simple, but it’s far from easy to execute. And even if you execute it well, success isn’t guaranteed.

Picking the right basket to put all your eggs in is the hardest part of execution. Whether you’re founding a start-up or making a concentrated investment, this choice is critical. And you must have conviction in your decision so you can weather the inevitable ups and downs. Therefore, you can’t haphazardly pick something based on a whim. You must do the work to deeply understand each of your options. Doing the work often leads to what others might consider an obsession, but it’s what uncovers the insight that others miss—the insight that reduces your risk, tilts the probabilities in your favor, and helps you build the conviction needed to go all in.

Andrew Carnegie’s method isn’t something that everyone is suited for. Making that kind of decision and sticking with it to the end requires mental grit and toughness. But for people with the right mind-set, when it’s done well, it can lead to outsize results.

A friend reminded me of some wisdom attributed to Andrew Carnegie that I’ve always loved because it’s counter to what most people believe leads to outsize success or investing returns:

The way to become rich is to put all your eggs in one basket and then watch that basket.

Mark Twain famously said something in the same vein after hearing about Carnegie's remark (source).

This quote resonates with me because it’s what every wealthy person I know personally did. In either company building or investing, concentration (i.e., extreme focus) on one thing is what led to outsize success. If you focus on one thing, you’re more likely to know everything about it and be able to assess it better than others. You’re likely to spot what others have missed, which reduces risk and tilts the probabilities of success in your favor. When everyone else thinks the chance of success is 10%, you realize it’s 60%.

What I’ve also seen is that after someone has achieved outsize success, they embrace diversification as a means of preservation and reducing downside risk.

Said differently, concentration is for building outsize wealth (or a business), and diversification is for preserving that wealth (or that business).

This week I had a conversation with an early-stage founder who’s building software for micro SMBs. After being at it for several years, he’s finally hit product–market fit. He’s doing over $1m in annual recurring revenue, is cash-flow break even, and wants to raise from VC firms to accelerate growth.

As we chatted, he told me that he’s made it to several final meetings with VC firms where he presents to the entire partnership. They love the product, but they don’t understand how the go-to-market will work for micro SMBs or how big the market opportunity is. So, they pass.

This conversation reminded me of a post I wrote a few months ago (see here). There’s no tried-and-true playbook for selling to micro SMBs like there is for enterprise SaaS, so lots of people avoid it. They don’t understand how big the market is or how to find potential customers.

To me, it’s an obvious white space that people—even some VC firms—are overlooking. And to this founder, the opportunity is crystal clear. He’s dumbfounded that forward-thinking investors don’t get it.

Micro SMBs is an overlooked and great market to go after. The entrepreneurs who get it now will end up building massive businesses with diversified and loyal customer bases. By the time others realize how big this opportunity is, these early entrepreneurs will have a first-mover advantage that will be hard to compete with.

I’m rooting for this founder. He finally found one firm whose people get it. They’ve agreed to be the lead and write a large check in his fundraising round. He’s on his way!

So, Figma finally had its much-anticipated IPO this week. In 2022, I shared that Adobe offered to buy it for $20 billion, but the deal was canceled because regulators wouldn’t approve it. This week, the company began trading on the NYSE.

The company sold shares at $33 a share. But when the stock began trading, it opened at $85 per share, or a $50 billion market capitalization (valuation). As of the writing of this post, the stock is at $122 and the company has a market cap of almost $60 billion.

For more details on the IPO and the above stats, see here.

Time will tell how the stock performs, but so far, the Adobe deal falling through has worked out well for Figma employees and investors. According to Bloomberg (see here), Index Ventures’ stake is worth over $7 billion, Greylock Partners’ stake is worth about $6.75 billion, Kleiner Perkins’s stake is worth about $6.05 billion, and Sequoia Capital’s stake is worth about $3.75 billion. Returns will depend on when, how much, and at what valuation each firm invested, but it appears that all have done well on this investment . . . so far.

In 2022, I shared that Figma was being acquired by Adobe for $20 billion (see here). A year later, the acquisition was called off because regulators wouldn’t approve the deal (see here), but it wasn’t all bad for Figma—it walked away with a $1 billion breakup fee for its troubles. Well, Figma is back in the news. According to Bloomberg, Figma is targeting an IPO this summer (see here).

Bloomberg says that Figma generated $821 million in revenue for the 12 months ending March 31 (a 49% growth rate) and is cash-flow positive. I haven’t confirmed these figures, but if they’re true, those would be amazing metrics. The devil is always in the details, and many times people don’t really understand a company’s financials, so I want to investigate for myself. I found a copy of Figma’s SEC S-1 registration statement (see here). I’m looking forward to digging into it to understand this company better, given that I know many entrepreneurs who love its product.

I’ve been seeing more IPO announcements recently. I had a gut feeling that IPO activity has increased materially, but I hadn’t looked at the data to confirm. In fact, I haven’t looked at the data since my last update in March 2025 (see here), so today I did. Here are the updated IPO stats through July 2, 2025:

• 2025: 175

Here’s the 2025 breakdown by month:

• January: 28
• February: 28
• March: 19
• April: 32
• May: 34
• June: 25
• July: 9 (so far)

For comparison, here are previous years’ IPO stats:

• 2024: 225
• 2023: 154
• 2022: 181
• 2021: 1,035
• 2020: 480
• 2019: 232

IPO activity picked up after March. At this rate, we’ll exceed 2019, which was pre-COVID and pre-ZIRP. We’re on track to have the most IPOs since interest rates rose rapidly in 2022.

We still have six months left in the year, and anything can happen. If the Q2 taught me anything, it’s that curveballs can come at any time (e.g., April tariffs). But I suspect lots of technology CEOs and their VC investors are watching the IPO stats and strongly considering going public while the window is open and public market investors are receptive to buying shares in technology companies.

If you want to see the IPO stats—recent or historical—try here (where I get my IPO data).

A few days ago, I posted about the Los Angeles Lakers being sold for $10 billion (see here). The team was bought in 1965 for $5.175 million by Jack Kent Cooke (see here). What a crazy increase in value: $5.175 million to $10 billion over 60 years. Looking at the average rate of growth in team value per year, or compound annual growth rate (CAGR), it’s roughly 13.5%—over 60 years.

I wanted to see how this compares to the returns of great investors. The easiest comparative is Warren Buffett, since he began investing professionally in the 1950s and just retired. According to CNBC, Buffett took over Berkshire in 1965, and from then through the end of 2024, Berkshire shares rose 5,502,284%. CNBC says that equates that to a CAGR of 19.9%. See the details here.

So, owning the Lakers turned $5.175 million into $10 billion, and that was amazing, but investing with Buffett in Berkshire would have far outpaced that, assuming you invested $5.175 million and held the entire time.

Using a reverse CAGR calculator (see here), if you invested $5.175 million in 1965 and got Buffett’s 19.9% CAGR, you’d have $277.3 billion by the end of 2024.

Ten billion dollars and $277.3 billion. That’s the difference between compounding at 13.5% and compounding at 19.9% over 60 years. That 6.4 percentage-point difference is a $267.3 billion difference!