The ONE Thing #1: On the democratization of private markets

Happy Friday, everyone.

Welcome to the inaugural issue of my newsletter 🎉.

Every other Friday I’m sharing one idea that’s on my mind and my favorite article, tweet, and podcast of the week. Expect ideas about investing, Web3, company building, culture, and mental models. From time to time, there will be one more thing, like a recommendation for a book or a documentary.

I’d love to hear what you think. Share your feedback by responding to this email.

And now, without further ado, enjoy the first issue.

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One Idea: On the democratization of private markets

Over decades, private equity and venture capital – two of the largest and most profitable asset classes – were inaccessible to individual investors. Luckily, this is changing and thanks to the rise of syndicates and micro funds, we see many new faces on companies cap tables.

I’ve started a small investment syndicate last year. Besides finding great companies and investing meaningful amounts with co-investors, the thing that excites me most is that the syndicates allow people to join deals who usually have no access to startup investments.

I believe the future of investing is multiplayer and the number of investors per round will surge, making so-called party rounds the new standard. Here’s why:

1. Investing became mainstream culture, and everyone is an investor now.

• More people than ever actively invest in the stock markets, in crypto, or buy fractionalized ownership of assets.

• Investing is now part of mainstream culture and a topic that’s discussed at lunch and dinner tables all over the world. These days, there are probably more investment podcasts than mindfulness podcasts.

2. New tools and platforms to enable everyone to participate in the private markets.

• New platforms like Angel List, Syndicate or Vauban allow individuals to easily launch or invest in syndicates or micro funds, enabling more people to participate in the private markets. 

3. The concept of ownership is being rethought.

• Web3 is rethinking the relationship between consumption and ownership, and we’re moving towards a new form of stakeholder ownership.

• With Web3, consumers can own a piece of a company by purchasing tokens and thus increasingly creating opportunities for early users, creators, or advisors to earn equity or invest. I believe this trend will spill over to the private markets.

While this trend is a chance for individuals to build wealth, it’s also a big opportunity for companies:

• First, they can tap into new pools of capital and raise directly from users or fans. Research shows that companies that raised a party round are more likely to raise follow-on funding.

• Second, users become shareholders and thus ambassadors. Traditionally, companies rely heavily on marketing to raise awareness and acquire new customers. Having potential users on your cap table will help with organic and word-of-mouth growth.

We’re in the early innings, and it will be interesting to see how regulators position themselves. For decades, they tried to “protect” individual investors from investing in the more unregulated private markets, and it’s not super likely that they will now just allow it to happen. On the other hand, the SEC is also loosening the definition of “accredited investor” and the EU recently published a new crowdfunding legislation.

One Article

The Best Leaders are Feedback Magnets — Here’s How to Become One

Shivani Berry explains why managing feedback well is the secret superpower of the best leaders. The article gives actionable tips on how we all can get better at receiving and processing feedback.

One Podcast

Jorgenson's Soundbox with Chris Sparks: High-stakes Poker, the training regimen of a world-class mental athlete, and coaching the top 0.01%

A deep dive into the mind of one of the most profitable poker players in the world. He talks about how he prepares for big tournaments, the meta skill of finding good games, and how he has consistently managed to perform at the highest levels for years. He also shares a few anecdotes from the poker table. 

Listen to it on Apple Podcasts or Spotify or wherever you listen to podcasts.

The One Tweet

alex @AlexUlrichh

A little piece of advice from Kendrick Lamar https://t.co/hqUQLTda7X

We talked a lot about investments and money today. Kendrick reminds us what really matters.

That’s it for this issue of The One Thing. Subscribe to receive fresh ideas and curated content every other Friday.

Until next time, friends. Keep learning!