Ben Gilbert: evaluation

Transcript context

…It’s a really good book, recommend it to anyone. Speaking of Ben Graham, this notion of independence of thought, there’s a Ben Graham quote that, “The stock investor is neither right nor wrong because others agreed or disagreed with him. He is right because his facts and analysis are right.” This is something that I think as a venture investor is so difficult because so much of the success of a company when you’re investing in it depends on its ability to, in the near-term, raise future capital from someone who is not you. It encourages this herd mentality of, do other people perceive this to be a hot company in the way? Whereas what Ben Graham is looking at is the complete opposite side of the spectrum, no growth at all, exclusively looking at cigar butts. It’s like you have to hang your hat exclusively on your independent analysis which is way easier to do when you have a book value staring you in the face and you’re only going to do, basically, a one-time transaction on it. It is, I think a thing, this independence of thought and something that we can all bring a little bit of Ben Graham into our lives. It’s funny because the positive and the negative hit you in different ways. When other people are telling you you are right, it’s very easy to accept the idea that you are right. When other people are telling you you are wrong, you know that, hey, maybe what I’m supposed to do is be contrary and trust my gut. It’s funny how you want to say, look, just because other people are telling me I’m wrong, it doesn’t mean I’m wrong, but if other people are telling me I’m right, I’m definitely right. Totally. I think you raised a really good point in there, too. Two good points. We could all use a little more Ben Graham in our lives, but people talk about value investing in venture and blah-blah-blah, and some people try to do it. Other people bemoan why it doesn’t happen. You raise a really, really good point which is that it kind of can’t because you’d need other people to believe, too. Unless you’re going to be willing to just wholly finance a company yourself, but even then, that’s (a) a slippery slope, but (b) the company needs to recruit employees, it needs to recruit partners, it needs to recruit customers. You got to be bringing people into the fold. You got to be a missionary to succeed in the startup world.…

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