Dear Friends,
We are keeping it light this week. It’s the doldrums of summer, and I suggest we should all read a bit more long-form - maybe fiction or history?
I’ve been reading The British Are Coming by Rick Atkinson. It captures your attention like fiction while recounting the American Revolutionary War, including primary source quotes. The New York Times book review says: “It is as if Ken Burns somehow gained access to a time machine, traveled back to the Revolutionary era, then captured historical scenes on film as they were happening.”
What are you reading? Do you recommend it? We still have August.
Today's Contents:
Good Reads: Sensible Investing
Charts
Song of the Week: The High Road
Good Reads: Sensible Investing
When to Dig a Moat. Uncertainty, Success, and Defensibility by Packy McCormick.
‘Moats’ are an oft-discussed topic (along with differentiation) but usually in a retrospective, confusing way. Packy does a great job in this piece making it conceptually simple, particularly for growth-stage businesses.
New startups have a limited window of time during which they’re protected by the cover of uncertainty to dig moats, and if they don’t dig them by the time others catch on, their excess profit will be competed away and they’ll struggle to achieve a good outcome.
Buyout Funds Buy From Themselves (PDF’d link) - Another banger from Matt Levine. This one is about the private equity markup and fee game. It will be rough when the music stops, and there are no more buyers.
Simple Fundraising Advice for Founders from Tracy Young. I appreciate her sharp thinking. As she says, “1. Understand that VCs have their own investors, and their top priority is delivering a substantial return on investment to their LPs.”
Founders should have an answer to ‘How will the investment in this company have the potential to make the investor an incredible amount of money?’ You aren’t ready to raise a venture round if you can't answer that.
Interesting Charts
Song of the Week: Times Like These
Video on YouTube.
I was reminded of Times Like These from a friend’s shared story this week. Of course, it’s an early 2000s song that has stood the test of time and keeps reappearing in places like George W. Bush's presidential campaign and, currently, the song the Seattle Kraken play when they win games.
I’ve always liked it. The message is timeless. As I wrote to a founder this week: keep on keeping on.
“Times Like These” by Foo Fighters
I, I'm a new day risin'
I'm a brand new sky to hang the stars upon tonight
But I, I'm a little divided
Do I stay or run away and leave it all behind?
Uh-uh
It's times like these you learn to live again
It's times like these you give and give again
It's times like these you learn to love again
It's times like these, time and time again
Selfie of the Week
Despite the heat, I’m still trying to run the trail along Town Lake in Austin.
Thanks for reading, friends. Please always be in touch.
As always,
Katelyn