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Apr 23, 2017 · 28m · top-founders

638: Alternative Investment Ideas, His Book Deal Included 10% Royalty, $100k Advance from Entrepreneur Patrick McGinnis

Patrick McGinnis · 15m spoken Nathan Latka · 9m spoken
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In this episode of The Top Podcast, host Nathan Latka interviews investor and author Patrick McGinnis to discuss the principles behind The 10% Entrepreneur, strategies for building a diversified angel portfolio, and the economics of traditional book publishing.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 38.6% of the talking time here. How this is scored →

Nathan as informed peer 3.9 Guest teaching 3.4 Guest disagreement 1.1 Nathan pushing back 2.0
05100:0010:0020:001:14–4:29 · Nathan as informed peer 4/10 Introducing Patrick McGinnis and Episode Preview Nathan introduces Patrick and probes his post-AIG background, clarifying how his advisory firm differs from his side investments. Patrick cooperatively lays out his transition from Wall Street to angel investing and his initial deal with Real Influence.4:29–8:44 · Nathan as informed peer 7/10 Startup Portfolio Successes: Ipsy, Bluesmart, and Afiniti Nathan showcases strong domain knowledge by citing public funding records and timeline dates for Ipsy's seed round and subsequent Series A and B rounds to benchmark Patrick's investment timeline. Patrick confirms the details and shares details on other investments like Bluesmart and Afiniti.8:44–11:01 · Nathan as informed peer 3/10 Essential Angel Investing Rules and Common Traps Patrick gives an educational masterclass on angel investing pitfalls, detailing three major rules: investing strictly within domain expertise, avoiding discounted 'mates rates' for friends, and resisting herd mentality when elite VC firms are in a round.11:01–16:12 · Nathan as informed peer 5/10 The Origins and Writing of The 10% Entrepreneur Nathan presses Patrick on book publishing economics, questioning why Patrick chose traditional publishing over self-publishing and challenging how royalties are tracked given delayed reporting. Patrick explains the global reach benefits and shares his $100k advance.16:13–18:56 · Nathan as informed peer 4/10 Book Marketing Tactics and Offshore Operations Patrick details practical marketing strategies for selling 50k books, including top-tier podcast appearances, international media hits on CNN en Español, and utilizing an offshore team in Venezuela for social and database management.18:56–21:13 · Nathan as informed peer 4/10 Balancing Consulting Income and Commercial Real Estate Deals Nathan asks how Patrick supports himself while angel returns mature, prompting Patrick to describe his consulting income and a $10M-$20M commercial real estate sale-leaseback transaction executed alongside a specialized partner.21:15–23:21 · Nathan as informed peer 0/10 Sponsor Highlights: Klipfolio Analytics and FreshBooks Accounting Solo host segment featuring sponsor reads for Klipfolio dashboards and FreshBooks accounting software.23:22–26:23 · Nathan as informed peer 4/10 The Famous Five Questions with Patrick McGinnis Nathan runs through the Famous Five rapid-fire questions covering favorite business books, political opinions on Sheryl Sandberg, Quip, and sleep habits before delivering a comprehensive closing summary of the episode.1:14–4:29 · Guest teaching 3/10 Introducing Patrick McGinnis and Episode Preview Nathan introduces Patrick and probes his post-AIG background, clarifying how his advisory firm differs from his side investments. Patrick cooperatively lays out his transition from Wall Street to angel investing and his initial deal with Real Influence.4:29–8:44 · Guest teaching 3/10 Startup Portfolio Successes: Ipsy, Bluesmart, and Afiniti Nathan showcases strong domain knowledge by citing public funding records and timeline dates for Ipsy's seed round and subsequent Series A and B rounds to benchmark Patrick's investment timeline. Patrick confirms the details and shares details on other investments like Bluesmart and Afiniti.8:44–11:01 · Guest teaching 7/10 Essential Angel Investing Rules and Common Traps Patrick gives an educational masterclass on angel investing pitfalls, detailing three major rules: investing strictly within domain expertise, avoiding discounted 'mates rates' for friends, and resisting herd mentality when elite VC firms are in a round.11:01–16:12 · Guest teaching 4/10 The Origins and Writing of The 10% Entrepreneur Nathan presses Patrick on book publishing economics, questioning why Patrick chose traditional publishing over self-publishing and challenging how royalties are tracked given delayed reporting. Patrick explains the global reach benefits and shares his $100k advance.16:13–18:56 · Guest teaching 4/10 Book Marketing Tactics and Offshore Operations Patrick details practical marketing strategies for selling 50k books, including top-tier podcast appearances, international media hits on CNN en Español, and utilizing an offshore team in Venezuela for social and database management.18:56–21:13 · Guest teaching 4/10 Balancing Consulting Income and Commercial Real Estate Deals Nathan asks how Patrick supports himself while angel returns mature, prompting Patrick to describe his consulting income and a $10M-$20M commercial real estate sale-leaseback transaction executed alongside a specialized partner.21:15–23:21 · Guest teaching 0/10 Sponsor Highlights: Klipfolio Analytics and FreshBooks Accounting Solo host segment featuring sponsor reads for Klipfolio dashboards and FreshBooks accounting software.23:22–26:23 · Guest teaching 2/10 The Famous Five Questions with Patrick McGinnis Nathan runs through the Famous Five rapid-fire questions covering favorite business books, political opinions on Sheryl Sandberg, Quip, and sleep habits before delivering a comprehensive closing summary of the episode.1:14–4:29 · Guest disagreement 1/10 Introducing Patrick McGinnis and Episode Preview Nathan introduces Patrick and probes his post-AIG background, clarifying how his advisory firm differs from his side investments. Patrick cooperatively lays out his transition from Wall Street to angel investing and his initial deal with Real Influence.4:29–8:44 · Guest disagreement 1/10 Startup Portfolio Successes: Ipsy, Bluesmart, and Afiniti Nathan showcases strong domain knowledge by citing public funding records and timeline dates for Ipsy's seed round and subsequent Series A and B rounds to benchmark Patrick's investment timeline. Patrick confirms the details and shares details on other investments like Bluesmart and Afiniti.8:44–11:01 · Guest disagreement 2/10 Essential Angel Investing Rules and Common Traps Patrick gives an educational masterclass on angel investing pitfalls, detailing three major rules: investing strictly within domain expertise, avoiding discounted 'mates rates' for friends, and resisting herd mentality when elite VC firms are in a round.11:01–16:12 · Guest disagreement 2/10 The Origins and Writing of The 10% Entrepreneur Nathan presses Patrick on book publishing economics, questioning why Patrick chose traditional publishing over self-publishing and challenging how royalties are tracked given delayed reporting. Patrick explains the global reach benefits and shares his $100k advance.16:13–18:56 · Guest disagreement 1/10 Book Marketing Tactics and Offshore Operations Patrick details practical marketing strategies for selling 50k books, including top-tier podcast appearances, international media hits on CNN en Español, and utilizing an offshore team in Venezuela for social and database management.18:56–21:13 · Guest disagreement 1/10 Balancing Consulting Income and Commercial Real Estate Deals Nathan asks how Patrick supports himself while angel returns mature, prompting Patrick to describe his consulting income and a $10M-$20M commercial real estate sale-leaseback transaction executed alongside a specialized partner.21:15–23:21 · Guest disagreement 0/10 Sponsor Highlights: Klipfolio Analytics and FreshBooks Accounting Solo host segment featuring sponsor reads for Klipfolio dashboards and FreshBooks accounting software.23:22–26:23 · Guest disagreement 1/10 The Famous Five Questions with Patrick McGinnis Nathan runs through the Famous Five rapid-fire questions covering favorite business books, political opinions on Sheryl Sandberg, Quip, and sleep habits before delivering a comprehensive closing summary of the episode.1:14–4:29 · Nathan pushing back 2/10 Introducing Patrick McGinnis and Episode Preview Nathan introduces Patrick and probes his post-AIG background, clarifying how his advisory firm differs from his side investments. Patrick cooperatively lays out his transition from Wall Street to angel investing and his initial deal with Real Influence.4:29–8:44 · Nathan pushing back 3/10 Startup Portfolio Successes: Ipsy, Bluesmart, and Afiniti Nathan showcases strong domain knowledge by citing public funding records and timeline dates for Ipsy's seed round and subsequent Series A and B rounds to benchmark Patrick's investment timeline. Patrick confirms the details and shares details on other investments like Bluesmart and Afiniti.8:44–11:01 · Nathan pushing back 1/10 Essential Angel Investing Rules and Common Traps Patrick gives an educational masterclass on angel investing pitfalls, detailing three major rules: investing strictly within domain expertise, avoiding discounted 'mates rates' for friends, and resisting herd mentality when elite VC firms are in a round.11:01–16:12 · Nathan pushing back 4/10 The Origins and Writing of The 10% Entrepreneur Nathan presses Patrick on book publishing economics, questioning why Patrick chose traditional publishing over self-publishing and challenging how royalties are tracked given delayed reporting. Patrick explains the global reach benefits and shares his $100k advance.16:13–18:56 · Nathan pushing back 2/10 Book Marketing Tactics and Offshore Operations Patrick details practical marketing strategies for selling 50k books, including top-tier podcast appearances, international media hits on CNN en Español, and utilizing an offshore team in Venezuela for social and database management.18:56–21:13 · Nathan pushing back 3/10 Balancing Consulting Income and Commercial Real Estate Deals Nathan asks how Patrick supports himself while angel returns mature, prompting Patrick to describe his consulting income and a $10M-$20M commercial real estate sale-leaseback transaction executed alongside a specialized partner.21:15–23:21 · Nathan pushing back 0/10 Sponsor Highlights: Klipfolio Analytics and FreshBooks Accounting Solo host segment featuring sponsor reads for Klipfolio dashboards and FreshBooks accounting software.23:22–26:23 · Nathan pushing back 1/10 The Famous Five Questions with Patrick McGinnis Nathan runs through the Famous Five rapid-fire questions covering favorite business books, political opinions on Sheryl Sandberg, Quip, and sleep habits before delivering a comprehensive closing summary of the episode.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 72.7% · guest 27.3%0:00 · Nathan 72.7% · guest 27.3%3:00 · Nathan 22.7% · guest 77.3%3:00 · Nathan 22.7% · guest 77.3%6:00 · Nathan 32.9% · guest 67.1%6:00 · Nathan 32.9% · guest 67.1%9:00 · Nathan 15.9% · guest 84.1%9:00 · Nathan 15.9% · guest 84.1%12:00 · Nathan 20.9% · guest 79.1%12:00 · Nathan 20.9% · guest 79.1%15:00 · Nathan 14% · guest 86%15:00 · Nathan 14% · guest 86%18:00 · Nathan 11.2% · guest 88.8%18:00 · Nathan 11.2% · guest 88.8%21:00 · Nathan 84.9% · guest 15.1%21:00 · Nathan 84.9% · guest 15.1%24:00 · Nathan 74.6% · guest 25.4%24:00 · Nathan 74.6% · guest 25.4%27:00 · Nathan 0% · guest 0%27:00 · Nathan 0% · guest 0%
Sharpest disagreement ▶ 10:15 Dismissing cocktail party vanity in angel investing

Patrick emphatically rejects the vanity and hubris of investors who chase name-brand VC co-investments for cocktail party bragging rights rather than financial returns.

 Hardest push from Nathan ▶ 14:01 Challenging publisher royalty transparency

Nathan directly challenges Patrick on how he can verify his royalty payouts when traditional publishers only provide delayed bi-annual reports without real-time unit data.

 Biggest teaching moment ▶ 9:30 Deconstructing the VC deal-sharing fallacy

Patrick schools listeners on the reality of deal syndication, explaining that top VC firms like Kleiner Perkins only share deals with smaller angels when they are not top tier.

 Nathan holds their own ▶ 6:50 Citing precise historical funding data for Ipsy

Nathan demonstrates high domain preparation and analytical depth by quoting precise historical funding dates and round sizes from 2011 to 2015 to verify Patrick's angel entry point.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Patrick McGinnis and Episode Preview 4312 Nathan introduces Patrick and probes his post-AIG background, clarifying how his advisory firm differs from his side investments. Patrick cooperatively lays out his transition from Wall Street to angel investing and his initial deal with Real Influence.
Startup Portfolio Successes: Ipsy, Bluesmart, and Afiniti 7313 Nathan showcases strong domain knowledge by citing public funding records and timeline dates for Ipsy's seed round and subsequent Series A and B rounds to benchmark Patrick's investment timeline. Patrick confirms the details and shares details on other investments like Bluesmart and Afiniti.
Essential Angel Investing Rules and Common Traps 3721 Patrick gives an educational masterclass on angel investing pitfalls, detailing three major rules: investing strictly within domain expertise, avoiding discounted 'mates rates' for friends, and resisting herd mentality when elite VC firms are in a round.
The Origins and Writing of The 10% Entrepreneur 5424 Nathan presses Patrick on book publishing economics, questioning why Patrick chose traditional publishing over self-publishing and challenging how royalties are tracked given delayed reporting. Patrick explains the global reach benefits and shares his $100k advance.
Book Marketing Tactics and Offshore Operations 4412 Patrick details practical marketing strategies for selling 50k books, including top-tier podcast appearances, international media hits on CNN en Español, and utilizing an offshore team in Venezuela for social and database management.
Balancing Consulting Income and Commercial Real Estate Deals 4413 Nathan asks how Patrick supports himself while angel returns mature, prompting Patrick to describe his consulting income and a $10M-$20M commercial real estate sale-leaseback transaction executed alongside a specialized partner.
Sponsor Highlights: Klipfolio Analytics and FreshBooks Accounting 0000 Solo host segment featuring sponsor reads for Klipfolio dashboards and FreshBooks accounting software.
The Famous Five Questions with Patrick McGinnis 4211 Nathan runs through the Famous Five rapid-fire questions covering favorite business books, political opinions on Sheryl Sandberg, Quip, and sleep habits before delivering a comprehensive closing summary of the episode.

Statements from this episode (10)

Assertion Supported
McGinnis invested in Ipsy at zero customers before it reached 1M+
“I invested when I had no customers, last report, obviously confidential now, but was at over a 150,000 sorry, over a million customers.”
Patrick McGinnis Apr 23, 2017 ▶ 3:54
Disclosure
McGinnis: Ipsy is his top angel investment, followed by Bluesmart and Afiniti
“It is, although I have two that are that are close behind.”
Patrick McGinnis Apr 23, 2017 ▶ 7:52
Insight
McGinnis: Angels investing in friends must insist on strict commercial terms
“Number two, you have to make sure that you, these may be your friends, but you cut a commercial deal and you know, there's no mates rates in these kinds of things. And that it helps to have outside investors when you do these things.”
Patrick McGinnis Apr 23, 2017 ▶ 10:08
Insight
McGinnis: Top VCs only syndicate their lesser deals to outside angels
“And my view is if Kleiner is in this deal, I mean, I I'm honored to look at it. It's really nice, but they probably are showing it to me cause it's not one of their best ones. Because if it were that great, they'd take the whole thing themselves or they'd get,…”
Patrick McGinnis Apr 23, 2017 ▶ 10:27
Disclosure
McGinnis: Half of personal investment portfolio acquired via sweat equity
“So half my portfolio, I've just gotten sweat equity for those things.”
Patrick McGinnis Apr 23, 2017 ▶ 11:59
Assertion Not checkable as stated
McGinnis: Wrote 'The 10% Entrepreneur' in one month
“I did it in a month.”
Patrick McGinnis Apr 23, 2017 ▶ 12:32
Assertion Supported
McGinnis: Traditional book publishers pay authors around 10% royalties
“You get around 10% at a traditional publisher.”
Patrick McGinnis Apr 23, 2017 ▶ 14:01
Disclosure
McGinnis received a $100k advance for 'The 10% Entrepreneur'
“My advance was in the high. Let's see, what was it? It was in somewhere around a hundred K.”
Patrick McGinnis Apr 23, 2017 ▶ 14:49
Disclosure
McGinnis: All Social Media and Database Operations Run Out of Venezuela
“I have a group that does all my social, all my database management. So we have obviously a database we've built with all the usual tricks that everybody does. And I do it all out of Venezuela.”
Patrick McGinnis Apr 23, 2017 ▶ 17:45
Insight
McGinnis: Freelancing Offers Flexibility but Builds Zero Wealth
“Freelancing is great in terms of flexibility, but you build zero wealth.”
Patrick McGinnis Apr 23, 2017 ▶ 19:12
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