How to pick winners in times of uncertainty

By: Peter Adams Monday April 16, 2018 0 comments Tags: Peter Adams, Rockies Venture Club

Adams_INvesting_headerNEWBy Peter Adams

Executive Director

Rockies Venture Club

If you’ve read ANYTHING about cryptocurrencies and ICOs (Initial Coin/Token Offerings), you’ve read opinions from people who believe that the value of these coins will go up 100 times and others who believe that they will all crash to zero because there is “nothing there.” 

If you believe either of these groups, you’ll be in big trouble if you’re an entrepreneur or angel/venture capital investor in this space. Some cryptocurrencies will indeed go to zero and others will likely rise by 100X, but out of thousands of deals, how would you know how to pick the right ones?

It’s not just cryptocurrencies that have a lot of uncertainty today. We’re seeing unprecedented change in blockchain, artificial intelligence, Internet of Things, self-driving cars and more. 

These trends are all going to become a big part of our future, but which companies are the ones we should invest in?

Experience can be a guide in helping decipher the trends in fast breaking industries. The cryptocurrency ICO market reminds me a lot of all the dot.com startups in the 1990’s who were going public without having much more than a URL like etoys.com, socks.com, pets.com, etc.

What happened during the .com boom? 

Lots of companies got funded quickly and at valuations that didn’t make sense. It kind of looks like the ICO boom now. 

When companies get too much money too quickly, they tend to accelerate their failure rate because they haven’t figured out their product-market-fit or how to scale up quickly. 

We’ll certainly see some of that in the current ICO boom, but, just like in the .com boom, we’ll also see some VERY BIG winners. Google and Amazon looked crazy in the 1990s but now they are today’s biggest companies. 

We will see the same thing with blockchain, cryptocurrencies, AI, IoT, intelligent cars and more.

The people who predict wholesale failure or wholesale success are bound to be wrong. The people who are diligent in digging into who the winners and losers will be with a futurist attitude will succeed. 

Investors who think like the hockey player Wayne Gretzky who famously said: “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”

Peter Adams

About the Author: Peter Adams

Peter Adams is co-author of Venture Capital for Dummies (John Wiley & Sons. 2013) and serves as the Executive Director of the Rockies Venture Club, America’s oldest angel investing group.  RVC is a non-profit organization furthering economic development in Colorado whose companies raised over $23 million in the past year.  RVC’s connects investors and entrepreneurs through conferences (Angel Capital Summit and Colorado Capital Conference), networking events, angel investing educational offerings and facilitation of Colorado’s largest angel investor groups.  Peter is the founder of the Biz Girls CEO Development Program for high school age girls and is an Adjunct Professor in the Colorado State University EMBA program. Peter holds a BA Degree from Colorado College, PhD/ABD from University of Colorado and an MBA from Regis University.