The New Business of Investing In People Rather Than Startups And How To Get Started

Here’s a question, what if you could invest in actual real assets, such as people instead of a cash-burning company cast as an attractive idea in a frothy speculative market?

I believe the most?attractive thing ?about anyone is their confidence, charisma, and EQ. Although looks certainly matter and boost one’s likeability and success down the road, they aren’t everything, especially when your net worth, track record, and wicked work ethic prove themselves!

I’ve been pondering about the idea of investing in myself and certain colleagues of mine for a while now as a self-proclaimed go-getter and thought it may not be as risky of a business as VC land after all!

The main concern with investing in startups is the specific niche of an industry they fall into which oftentimes depends on the trends of the age and what’s ‘in or out’. Social media may be hot today but in a decade, who knows?! On top of that, every space is saturated nowadays with immense competition, not to mention the capital intensity of a project in itself. The idea of investing in a startup that sounds too good to be true is too risky for most people, including myself however those with over 3 yrs of discretionary income choose to still dive into the deep end.

Compared to an individual, a vision is all that’s needed to bring it from point A to B, not an immediate elaborate business plan, pitch deck, and license to operate that may all fall into the cracks anyways if something doesn’t work out. And to be clear, there’s a 90% chance startups don’t make it.

Unless you’re a SAAS (Software-as-a-service) related tech company, you most likely don’t have high enough profit margins above 30% to make ends meet anyways. You’ll most likely be needing to raise capital and bleed money for a few years before breaking even, a nuisance in itself.

The We Play Case

When we look at companies such as WeWork or tennis players, they have very similar profitability trajectories.

In the case of WeWork, after raising billions in the private market thanks to SoftBank’s lofty unrealistic visions, WeWork decided they exhausted their options and needed to go public to raise even more capital since equities at the time were frothy, speculative, and knew that investors didn’t focus so much on business fundamentals and instead on the elusive dream, something Adam Neumann promoted exceptionally well, able to lure top VC investors, investment bank CEOs, and the whole universe on the idea of communal based office space.

Spoiler Alert: It wasn’t as glamorous or revolutionary as it sounds so if you invested in WeWork and LIQUIDATED YOUR HOLDINGS PRIOR TO THE PANDEMIC, you’re under hot water now and probably never want to lounge or hussle in a WeWork again.

However, if you invested in the great Adam himself, you would’ve made a staggering investment since ~2004. He, not WeWork underwent an immensely impressive turnaround and if you owned shares of his net worth or part of his success up until he was ousted, you could’ve received a sliver of the $1.1bn, with a B he received from leaving WeWork!

Pretty amazing given he was the poster child of a reckless CEO and become wealthier after leaving his company’s mess! Doesn’t happen often that’s for sure.

Now Adam is frolicking in the sunset as he continues to live lavishly, go back and forth to his homeland of Israel after he cashed out, and now onto a new venture, Flow which just went through the largest funding round backed by Andreessen Horowitz with his new real estate venture! Second time a charm? We’ll see! Regardless, Adam knows how to get out of a sticky situation and put that investment back in himself as a true leader in commercialized real estate!

Adam’s mess with WeWork reminds me of investing in a tennis player. The professional tennis industry is worth $2bn, not nearly as large as the NFL or NBA however, unless a player is ranked in the top 20 or below, with the exorbitant costs of physios, hitting partners, psychiatrists, hotels, and airfare fees with traveling 24/7 350 days a year unlike in other sports where there are designated seasons, tennis is a year-round sport which becomes costly when a player is never home.

With support from various tennis associations, players in Europe receive far more financial aid and stipends than players in the US which have to fund themselves. This is partly the reason why there are more European tennis players and greater popularity surrounding the sport abroad. I’m so proud of Iga who’s from my family’s country of Poland. Well deserved. It was incredible to see her win the U.S. Open! I definitely want to invest in this next generation of athletes.

When it comes to breaking even for tennis players, it’s very difficult, and betting on tennis players may be more of a challenge than deciding who will win the Super Bowl!

As a result, betting on a tennis player who will rise up the ranks such as Carlos Alcaraz is tough since tennis is a very unpredictable sport since it’s on your own or in doubles, and given there are tournaments year round, rankings and titles constantly move up and down at a faster pace than a company’s projections.

It’s not unlikely for top players to lose smaller tournaments or first rounds of major Grand Slams, i.e. Naomi Osaka or Tsispas at the U.S. Open this year.

However, what’s unique about tennis players is that they don’t have a determined pay package unlike CEOs of a company or other athletes’ contracts for a few years. Even if they don’t play frequently such as Naomi or don’t have a stellar ranking anymore, if they’ve been in the winning circle for a decent amount of time in the past, endorsements to sponsorships, agency requests, etc. can be more lucrative than a players salary when they’re actually on court! More risk = more return!

Just look at Naomi. She’s the highest female paid athlete and hasn’t been playing for quite some time now. With athletes and equities, everything is unpredictable however the gains may be more rewarding and worthwhile with an individual, especially if they are “out-of-the-box” thinkers and don’t try to fit the norm like Naomi or Adam.

Hard Work Doesn’t Count

When I think about it, investing in myself may be the best-untapped opportunity in the world. After all, the best investment is in yourself and provides the greatest ROI! You just never know who will rise among the competition if they put in the effort and work behind the scenes when no one is watching!

You may have assumed back in the early 2000s, reality stars such as Kim Kardashian and Paris Hilton were such divas and wouldn’t make it big. However, a few decades later as they took the chance and risked doing something everyone else was afraid of trying which was making a fool of themselves on TV, they’ve become billionaires in the process. While their happiness, health, safety, and sanity may not be in tip-top shape and possibly compromised due to all the fame, fortune, and paparazzi, as investors, we invest in what they’ve created up to this point and wish the best for them in the future!

Kim Kardashian would’ve been a worthwhile investment to tap into back in the ’90s stemming from her family’s hit reality show, multiple business lines, social media presence, and Skims her leisure brand now worth a staggering $2.3 billion!

As a result, never judge a book by its cover. The world is a small place so keep your friends close and enemies closer! Even Elon Musk’s college girlfriend is having no problem selling old photos and memories on the web as a type of NFT itself! Everything is scarce if you treat it as one! Hold onto it since you never know if your ex or annoying classmate will make it big one day — so big it could be the reason your portfolio and retirement blossom!

This idea of investing in people, including myself hypes me up! Of course, paying attention to your diet, relationships, and quality of mind is vital as well since everything can spiral out of control if your values aren’t aligned with what you do. The gamble with investing in people is that they can arguably be more unpredictable than companies since corporations already have some founding and proof of concept in the works.

However as long as you don’t invest more than 30% of your net worth into one investment, thing, or in this case, person, including yourself due to bias and preference, you should be good. Diversification is essential, especially in your business ventures and health to see the most success and investment long term. Mo Money could mean Mo Problems so stay prudent, realistic, and patient for long-term gains as opposed to a roller coaster short-term windfall.

A proper investment on paper is charted as a smooth line to the pot of gold!

How To Start Investing In You or Your Idol

It’s okay to be selfish here. Let’s say you want to invest in your favorite pop star or unknown artist that you believe will make it big. Congrats, you are thinking outside of the box as a true investor since no one gets rich off of only index funds. It’s discovering hidden patterns and dissecting trends before the general public that makes it a winning ticket.

Unlike startups where 9 out of 10 fail or some crazy statistic around those lines, with individuals, it’s actually seen as much safer. Humans may be crazy but there are lower-cost turnarounds that can be made. Everyone makes mistakes anyways it’s whether you’re willing to ride out the ebbs and flows of the journey to seek the sweet reward!

Plus, you don’t have to have an income of $250k or a min net worth of $1m to start investing in anyone, as long as you are nice to them.

Here are a few options to invest in a bright star regardless of age:

-Income-sharing agreement — agree to own a sliver of their income or net worth in exchange for a loan provided

-Buy shares such as 3% of me, Mia as a type of natural-equity value

-Investors get a proportional share on what is created — usually a business the individual/entrepreneur creates

-Able to sell a share of a lifetime stream of income

The only paradox to the last option is that those who’ve already established an impressive track record let’s say Kim K, most likely don’t need to be engaged in this type of deal with raising money for herself and those without this background will be seen as a greater risk and possibly less likely to be invested in.

Something to note, this concept isn’t entirely new anyways. By offering a loan to someone, you are investing in them instead of generating a possible higher return elsewhere.

The Work Done Today

Believe it or not, this venture of a venture already exists! Made by individuals for individuals, four siblings, Daniil, David, Anna, and Maria Liberman started a venture they call Humanism that allows people to put their money where their mouths are when they say “I believe in you.” They also formed a holding company of their financial interests, the Liberman’s Company.

The Liberman’s Company holds all projects the family members might start through May 2051 since they invest in themselves when starting out.

Unlike a business, there are more open-ended ways of measuring success with an individual besides a return on investment and there are more tangible ways to influence it that a business may not have the capacity to handle, most notably one’s circle, connections, values, family, health, etc. that all play into one’s future.

Although putting your faith into one individual may be intimidating and pointless especially since there are over 1 billion people on the planet, monetary success varies greatly in this day in age and individuals can always work on multiple business models and adopt several core missions not just their one idea within a business. Individuals are all about diversification ranging from their portfolio to life cycle that can shape their success in unpredictable ways!

Currently, these siblings have made themselves a type of test case for the Humanism concept and say they’re negotiating with the Securities and Exchange Commission on issuing shares in their company and hope to get clearance next year. Last year, the company made $14 million in net income in its first year of operation. Its main asset so far is Product Science, a company the siblings built that speeds up mobile apps.

If you have what it takes, the real test is showcasing your entrepreneurial flare.

Although history and the past can be helpful predictors of success, I find this way of investing not only democratizes the field of VC and angel investing, but also provides an opportunity to showcase millions of bright individual’s passions that may not be built into a glamorous shiny business presentation just yet and instead done in their bedroom or posted online.

Oftentimes the best ideas don’t have everything at their disposal yet and are creative with the resources they have. The self-starter and abundance mindset are core components of this building process. Just because your vision doesn’t have the label of a business or is registered as an LLC yet, doesn’t mean it can’t hit record highs. Everything worthwhile takes time and most future stars DO NOT ONLY reside in Silicon Valley or NYC.

If your gut is telling you there’s something bright about a certain individual’s future prospects and dreams, jump on it.

Looking at comparables with real estate listings works however with people, I wouldn’t recommend it. You can’t do an apples-to-apples comparison on real assets!

Time is of the essence however just like true love, don’t rush it! Remember, investing in yourself is wonderful as long as you allocate your capital appropriately and aren’t biased since that wouldn’t be diversified after all!