Learning From Missing Out

Today is an appropriate day to acknowledge the worst financial decision of my investing career.

 

In 2012, I was on a conference call with my friend Bryan Leach and a small group of his friends, brainstorming for the first time his concept that would eventually become a company called ibotta.  The idea was ingenious- and given my day job as a retail executive at Target, I could see it loud and clear at the time.  Soon thereafter, he invited me to invest in his friends and family round. 

 

I spent hours and hours hand-wringing on whether I should invest.  On the one hand, I totally believed in his vision.  Moreover, Bryan without a doubt was - and is - a highly impressive person.  I had a very strong sense that he would succeed with his new company.  I also thought about my dad’s decision to pass at his 5-year college reunion on investing in his classmate’s new company, which would become the parent company to Lotus 1-2-3 and Lotus Notes.

 

On the other hand, I had a sickly baby at home, still had student loan debt, and had just stretched to commit to an expensive remodel on the house in which I planned on raising my kids.  I reluctantly chose to pass on investing in ibotta.

 

That company, ibotta, went public this morning on the NYSE, with Bryan ringing the opening bell.

 

My investment would have had over a 100x return based on the pricing of the deal overnight.

 

A decade before the founding of ibotta, in 1999 I co-authored a white paper at JPMorgan studying regret minimization in investing, which delved into the behavioral science surrounding avoiding regret as a rational investment strategy.  My good friends can tell you that I still absolutely subscribe to that point of view- and of course, that makes my decision to not invest in ibotta even more painful.

 

But it is important to take the right learnings from any situation.  To that point, Mark Twain has a great quote: “We should be careful to get out of an experience only the wisdom that is in it and stop there lest we be like the cat that sits down on a hot stove lid. She will never sit down on a hot stove lid again and that is well but also she will never sit down on a cold one anymore.”  My learning from my decision on ibotta twelve years ago wasn’t to change my investment decision- because whether I thought it was a good business was not the deciding factor.  Instead, the right learning was to put myself in situations thereafter whereby I wouldn’t have to miss out on clearly good future investments.  While I missed out on investing in ibotta, given the broader variables at play, I can’t regret that decision on a day like today.

 

Thankfully, I am in a different financial situation now.  I have learned from that  ibotta decision- and my subsequent early stage investing.  I have learned to improve the likelihood that I, and my firm Ocampo Capital, will not miss out on amazing investments like ibotta again.  But in the spirit of transparency, and taking a page from Bessemer Venture Partners' broadcasting of their Anti-Portfolio Anti-Portfolio - Bessemer Venture Partners (bvp.com), I thought today would be a fitting day to share a big miss of my own and what I have learned from it.