Lets call him “Pat”. That’s not his name but close. I don’t want to embarrass him although I am 99.99% sure he won’t be embarrassed even if I mention him.
I met him in 1999. He was the #2 guy at the largest investment bank in the world. He wanted to invest in my next company. Here’s what he ended up doing:
He put a million dollars into a company I was starting.
He called all his best friends: Henry Kravis, Jim McCann (the CEO of 1-800-Flowers) and a bunch of other well-known investors. He said, “invest in this”, and they all sent in one million dollars within minutes. Henry Kravis wanted to send $5 million but I was stupid enough to say “no”. Pat probably helped me raise another $15 million.
Then Pat put another million into another company I was invested in.
Then Pat introduced us to a large private equity firm that put $100 million into a fund we were doing.
Then I hired away Pat’s top investment banker to work for the fund. I called Pat to say no hard feelings. He replied that it was basically unfair of me but he understood.
Everything went bad after that. The fund we were doing went down the drain. Maybe we invested $30 million of the fund but it did horribly.
The company all of Pat’s friends invested in went down the drain. We lost everything. They all lost all of their money. Altogether the company raised $120 million and was sold a few years ago for $10 milion.
The other company disappeared. I don’t even know what happened to it. I personally lost a ton of money in it but so did everyone else I know who put money in.
So that was how I returned all of Pat’s help. Thanks Pat.
Years passed. Eventually Pat left the bank and started his own hedge fund. He took his new #2 guy and that was the guy that did all of the investing. But Pat was good at picking up the phone and calling his friends and getting them to invest. He raised $3 BILLION dollars for his fund.
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