Hamed: Credit investing has no glory, like shooting penalty kicks
Ali Hamed · I asked a $2B investment genius for his best startup ideas (and it was genius) · Mar 25, 2024 · at 55:50
Ali Hamed, founder of CoVenture, contrasts the asymmetric upside of venture capital with the high-stakes, unglamorous nature of private credit investing.
0:00 / 0:12exact quote · 12.7s
▶ Watch the full episode on YouTube → 720p mp4 · rendered on demand · StarZero watermark
“Being in credit. It's like being a professional free throw shooter. You know, it's like, there's not, there's no glory or professional penalty kicker. Whenever I'm watching a soccer match, everybody loves PKs and I'm looking, I'm like, this reminds me of my job. This sucks.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Ali Hamed
Hamed: Income Share Agreements Are Inferior to Consumer Loans for Lenders
“The capital provider by themselves with just the income share agreement, wasn't getting properly compensated for how much risk they were taking. It was basically a mediocre or crappier version of a consumer loan, but you were getting paid either the same or sl…”
Hamed: CPG businesses should not be financed with debt
“So the best way to not get, not need a debt collector is to not finance a CPG business with debt.”
Hamed: Controlling critical operational utility grants de facto capital seniority
“You might be junior in the capital stack, but if you turn off the person's account, you suddenly became senior in the capital stack.”
Hamed: Loan-to-value underwriting fails when startup operational risk is binary
“It's very difficult to apply some loan to value or advance rate or however might finance the stuff. If there's binary risks that the whole thing might go poof.”
Hamed: Prefab housing will inevitably produce winners despite early investor losses
“We think it's inevitable that that will become a space where there are successful winners. We just don't think, we think a lot of people are going to lose money along the way. And we'd rather just kind of wait to see the winner emerge.”
Hamed: Founders should build capital-efficient startups before pursuing capital-intensive ideas
“So I would go do the same thing that he did, which is go find another idea that's housing related, that is more capital efficient, build and sell that company. And then use that credibility to go raise a lot of capital out of the gate for a capital intensive o…”