Colorado (you should come here), Valuation versus best investor, pre-emptive rounds and screen time bonding/value

Portfolio update:

Firstly, Colorado. See the pic here- its near Boulder. I was attending a neurodiversity conference with the kids. It was sunny and 58 degrees in the last week of January. I just can't explain how awesome it is here. I am opening an office for a new start-up in Denver but this entire state is wonderful. There is great potential here.

Overall, portfolio is slow and steady.? I made a few commitments and equal deal flow between healthtech and agriculture now that I have opened the spigot on?ag again.??

I got some news coming about some investments I will be making in agriculture... coming in a few months.? In the meantime, I am seeing "pre-emptive" rounds at modest upticks for good companies.? The smart entrepreneurs?are taking these versus holding out.? The old days are over but you can still build great companies.? BTW, I did write off a few investments.? Some entrepreneurs that just couldn't make it.? We tried our best on those and will try again!

Entrepreneurs Corner:? Highest valuation or Best Investor?? Pre-emptive rounds to extend runway??

In those rounds that are happening, I am seeing this?choice between price and investor quality frequently.? Entrepreneurs are seeing proposals at different prices, sometimes as much as 40-50%.? So what to do?? On one hand you owe it to yourself and your shareholders to get the best price.? On the other hand, a great investor is game changing to future value and future sanity.? A bad one sinks your ship.? ?

This is easy.? Its a no brainer.? Go with who you like, who you trust, and who is the highest quality, Independent of price. Maybe there is a break point- like if they are 2 or 3X different.? Never just default to the highest priced check.? The best outcome is that those are one and the same but often that isn't the case.? ?If you follow the money and just play people off each other, you have no reason to complain when investors treat you the same.? But if you act with quality and long term thinking in mind you will be entitled to similar treatment when the situation is reversed.??

Another situation I am seeing frequently with good companies-- the pre-emptive round at a flat valuation or modest uptick.? Its happened now maybe 5 times out of 40 companies I have at Divergent Investments.? In every case, I have the same advice:? if you like the investor, take the money.? Don't overthink it or be short term minded.? The market is still tough.? It may be years before there is another ipo window.? Important point- great investors have real value. An opportunity to get them in is unique. It also reduces the odds you ever have to take money from a bad investor. Also, as we learned with 2022/2023, downturns can come out of nowhere.? Most years are just normal neither good or bad.? That crazy 2020-2021 will not come back soon or ever.? So when someone shows interest, you should take that as a good sign.? ?

Don't ever take money just for the sake of it.? But if you get a chance and its?an insurance policy to extra runway and scale, you can't go wrong.? The same advice applies-- you have to like and trust your partner.? In that capacity, taking a slightly lower price or a pre-emptive round is not a bad thing at all.?

Parents Corner:? Screen time bonding and skill building

Screen time is not great.? We suffer from way too much focus on screen time in our household.? That said, there are ways to make the most of screen time.? I use screen time to build skills with the kids.? My kids fight and argue a LOT.? Instead of letting them watch on different screens I force them to sit in one room and interact and even negotiate what to watch.? ?Often they have to make deals and strategize because of course time is limited.? Also, I make them sit together.? Just being in the company of each other makes watching TV that much more social. It sounds silly but we are in the age of technology and each year more socialization and interaction happens over devices.? We can bemoan that as parents or we can adapt to it.? Truth be told, I want my kids to be tech savvy and device savvy.? But I also want them to value human interaction.? Use the time wisely and kill two birds with one stone