FAILURE STORIES EP. 07 CHRIS SACCA

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Chris Sacca is as an extremely successful venture capitalist, with stakes in Instagram, Kickstarter, Uber, Twitter, and dozens of other prominent start-ups like Stripe, Lookout and WordPress. He’s widely known from being ranked third on Forbes annual Midas List of tech’s 100 top investors as well as being a recurrent quest on Shark Tank. What is not so familiar is how his incredible journey started. Investing his student loans, making tones of money, losing a lot more and ending up with 4 million in debt.

 

Student loans

Although Chris succeeded in school his entire life, he had no idea what should be the purpose of his life. He studied advanced mathematics and was on the honor roll for 12 straight marking periods.  By 11th grade he felt burned out and wanted to pursue a college degree where there would be no math.  Chris took the natural step of going to law school. He quickly realized that going to classes is entirely optional and he can use that time start his own company thanks to government money from his student loan checks.

 

Hot hand

The company quickly folded and Chris used the money that was left to hit the stock market.  He invested in several of the hottest tech stocks of the decade. Not only he was successfully investing his student loans, but he leveraged the gaps he found in the terms and conditions of day trading platforms. Chris turned tens of thousands of dollars for his student loans into $12 million by 2000.

 

Bubble burst

At that point, being still a very young and inexperienced investor Chris never thought of cashing out some of his virtual money. Instead, with very little diversification, he continued to double down. You can probably guess what happened next. When the stock market crashed several of Chris’ stocks quickly plummeted and very quickly he found his paper net worth had fallen to $2 million. Feeling disappointed and overwhelmed he decided to take a break, clear his mind and walk away from the stock market for several weeks.

 

Debt

While he was travelling to Austria the leftovers of his portfolio dived even harder. An informal remark by Bill Clinton and Tony Blair about joint policy in the notion of patents around genetic technology, when viral in the news.  As the companies from this industry were the core of Chris’s portfolio, there were not much left this time. Playing this dangerous game and not giving himself the extent of the margin in his investments, Chris immediately wind up $4 million in debt with no means of paying it back.

 

Adult sites

Still keeping his nerves, he refused to declare bankruptcy and negotiated a workout plan with his creditors which reduced his total debt to $2.125 million. Over the course of next five years Chris completed law school, and got his hustle on. He worked for one of Silicon Valley law firm, but got fired after 13 months. Next step was opening up his own consultancy. This journey took him through writing terms and conditions for online adult sites and a variety of other less than impressive tasks. Remarkably, he managed to pay down the two-plus million dollars in debt at some point in 2005.

 

Angel

For the next four years Chris worked at Google. After that started his first angel investments in PhotoBucket and Twitter, for which he is much better known. What few realize, however is that his success today very nearly didn’t happen. It was his tenacity and refusal to quit, even when reckless at times, that paved his road to becoming one of the most respected and successful angels in Silicon Valley.

 

How?

Chris didn't study business or engineering, doesn't know how to program a computer or worked at a big venture firm. So how did he pulled it off? He does it by buddying up with well-chosen founders and very often serves as a mentor. It seems like he could take on everything but Chris only takes those ventures and endeavours in which he can be an asset.  On top of that neither massive debt, lay off, nor anything else is able to stop him.

chris