After investing in more than 200 startups, Adam Spector is investing less in startups.
Not because he had a terrible track record.
The opposite.
One investment did so well that selling just a third of the position paid back an entire fund.
He's gotten access to companies like Anthropic, Ramp, SpaceX and Anduril.
And after seeing how this game actually works, he's putting less money into it.
I wanted to know why.
One investment can change everything
Early-stage investing is a weird game.
Adam told me about one fund where they made somewhere between 50 and 80 investments.
One of those companies eventually gave them an opportunity to sell part of their position.
They sold a third.
That one sale returned enough money to pay back the entire fund.
They still owned the other two-thirds of the company, plus every other investment in the portfolio.
That's the outcome everyone is looking for in venture.
You can be wrong over and over again and one investment can make up for all of it.
But Adam has seen the other side too.
He invested in Relativity Space early. The company grew substantially and they eventually had an opportunity to sell around 20% of their position.
Then things changed.
The company was acquired and the value of the remaining equity fell dramatically.
Same investment.
Two very different outcomes depending on when you got liquidity.
That's part of what makes this type of investing so difficult.
You can have a company doing incredibly well on paper and still have no idea when you're actually going to get your money back.
Sometimes you barely hear from the company at all.
So Adam is changing his allocation
Historically, Adam estimates he had around 15% of his portfolio allocated to early-stage investments.
Now he's moving toward 5% or less.
I found that interesting.
Here's someone who has spent almost 16 years in San Francisco, built four companies and invested in more than 200 startups.
He has access.
He knows founders.
He's been successful doing it.
And his conclusion isn't that he should do more.
It's that he probably needs less.
Part of his reasoning is pretty simple.
If investing in startups isn't your actual job, how confident should you really be that you have an edge?
A founder sits across from you and tells you why their company is going to be huge.
They're smart.
They're convincing.
And they probably believe every word they're saying.
But you're still being pitched.
Adam thinks being an entrepreneur himself helped him. He could sit across from another founder and have a conversation as an operator rather than just listen to a pitch.
But even with that advantage, he's moving more of his money toward later-stage companies and public markets.
The boring option has started looking better.
I understand why
There's something that happens the longer you invest.
The huge potential return gets a little less exciting.
And all the stuff attached to that return starts mattering more.
How long is my money locked up?
When do I actually get paid?
How much of this outcome do I really understand?
What else could I do with the money?
Early on, it's easy to look at something that could return 50x and ask why you'd ever settle for 10%.
After you've done it for a while, getting a solid return, having liquidity and being able to sleep at night starts looking pretty good.
Adam basically said the same thing.
He's increasingly comfortable putting money into public markets, letting it compound and accepting that he doesn't need to find the next massive company.
It's less exciting.
That might be the point.
Then the conversation flipped
This was probably my favorite part.
Adam spent years training himself to save and invest as much as possible.
He grew up pretty frugal.
He still looks for coupon codes.
He told me he genuinely enjoys watching his net worth go up.
I get it.
There's something satisfying about watching the number compound.
But Adam has reached a point where he's trying to teach himself something completely different.
How to spend more money.
Not on more stuff.
He actually said buying more stuff can create more stress for him.
He wants to spend on things that either give him time back or make his life better.
He has a washer and dryer at home.
He still pays a laundromat to do his laundry.
Why?
They do it faster and better. It comes back folded. And he doesn't have to spend his time doing it.
His family started paying for a meal service because figuring out dinner every night was creating stress.
He'll pay for childcare when it frees up time he can use somewhere else.
And he's trying to spend more money on trips with friends.
None of these things are going to meaningfully change his net worth.
They might meaningfully change his life.
I think that's an important distinction.
At some point, you have to decide what the money is for
We spend a lot of time talking about how to make more money.
Then how to invest it.
Then how to compound it.
Then how to avoid losing it.
Those are all important.
But you can get so good at watching the number go up that you forget why you wanted the number in the first place.
I think Adam is wrestling with both sides of the same problem.
On the investing side, he's realizing he doesn't need to chase the maximum possible return.
On the spending side, he's realizing he doesn't need to save the maximum possible dollar.
In both cases, the question is the same:
Adam talked about being content with his life.
He gets to spend time with his kids.
He works from home.
He works on things he finds interesting.
He sleeps at night.
Could he take bigger swings?
Probably.
Could those swings make him much richer?
Maybe.
But they'd come with something attached.
More stress. More risk. Less time. Less flexibility.
And he's decided some of those trades aren't worth making.
I relate to that a lot.
There are things I could do differently in my own life or business that might increase my upside.
There are also things I'm perfectly happy giving up some upside for.
That's not a spreadsheet decision.
It's knowing yourself.
And I think that's where money gets a lot more interesting.
Making more of it is one problem.
Figuring out what you actually want it to do for your life is another.
My conversation with Adam Spector
We went much deeper than this.
We talked about why Adam thinks he shut down his first company too early, what he learned from investing in 200+ startups, how he thinks about early-stage versus later-stage investing, why being a great operator doesn't automatically make you a great investor, and why he's now actively trying to spend more money.
But the idea I kept coming back to was pretty simple:
You don't have to maximize everything.
Not your returns.
Not your net worth.
Not your business.
The point is figuring out which things are actually worth maximizing for you.
Watch my full conversation with Adam Spector here.
- Sam Silverman
Silverman Capital
