This Week in Startups Howard Lindzon on public vs. private investing psychology, “great unbundling” of index funds, Robinhood & more | Angel S5 E4
Feb 11, 2021
Howard Lindzon, an angel investor and co-founder of StockTwits, shares his insights on the contrasting dynamics of public and private investing. He reflects on lessons from the Dot-Com bubble, emphasizing investor psychology and the evolution of financial discussions on social media. Lindzon discusses the rise of SPACs and their implications for tech investments, while also critiquing traditional investment strategies. With a touch of humor, he navigates the complexities of the current market landscape and the importance of experiential learning in finance.
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First Angel Investment
- Howard Lindzon's first investment during the dot-com bubble was in CarsDirect, which was a bad investment initially.
- However, it came with shares in Viva.com, which became Rent.com and was acquired by eBay, making him a lot of money.
Public vs. Private Investing Psychology
- Private market investing is better suited for people who don't like the constant price fluctuations of public markets.
- Public markets can be intoxicating, leading to emotional decisions, while private investments offer more direct involvement with the founder and understanding of the company.
VC Returns vs. Public Market Returns
- Venture capitalists aim for 20-30% annualized returns, while the stock market traditionally offers around 10%.
- Young VCs unfamiliar with public markets are at a disadvantage, while those from hedge fund backgrounds are excelling due to their understanding of market dynamics.