Investment Thesis Envy

Some of my favorite blogger-investors have posted recently on the whys and wherefores behind their investment approach, including Fred Wilson on his latest fund at Union Square, Brad Feld on the launch of Foundry Group, and Paul Graham on what sets Y Combinator apart from traditional VC.

While each of these three has a slightly different take on where and how to make smart bets, collectively they reinforce my suggestion in a recent post that:

“…smart investing is smart investing no matter what you’re buying: know exactly what you want to buy, know exactly why you want to buy it, and have the patience to wait until you find exactly what you’re looking for at a price you know is fair.”

While it’s nowhere near as crisp or comprehensive as the frameworks advanced by these three, all of my recent bets have been informed by a set of ideas about where opportunities exist and why small companies succeed or fail. Taken together with my recent dive into Charlie Munger’s thoughts and writings, the posts above crystallized for me the importance of codifying and documenting my own investment thesis, partly to help in screening new investments, and partly to shine a brighter light on my ideas to see which ones really stand up to scrutiny.

This is no small task, and I expect the act of writing it down alone to point out some ugly cracks and inconsistencies. My plan is to break the topic down into a series of posts over the next few weeks. I’ll title them all with “Investment Thesis” so you can read or skip as you see fit. As always, reader feedback and questions are more than welcome.