VC:VC Is cycling a 10-bagger?

How is Venture Cycling like Venture Capital investing? With this post I am starting an occassional series comparing the two activities, called my VC:VC (Venture Cycling:Venture Capital) series.

First a little introduction. I have a particular view of Venture Capital, based on a fairly narrow angle of view on our industry. I work at Sigma Partners, which is a boutique firm investing in early stage technology companies. Although I have previously been a co-founder or executive with several VC-funded startups, what you read here is really colored by how we do things at Sigma.

You have probably heard that when VC's invest in 10 companies we expect one or two to be big hits, one or two to fail entirely, and the rest to fall in the spectrum in between. The numbers vary (all VC's tell you their numbers are better than the average). When a VC talks about a big hit you might hear them calling it a 10-bagger (a phrase apparently coined by Peter Lynch, of Fidelity Maggellan fame). A 10-bagger means that for every $1 of investment made, the VC fund receives $10 back when they sell their stake (either selling the company to someone else, or after an IPO). 10-baggers are pretty rare; 50-baggers are mythical, even though a few were spotted during the bubble.

Obviously this is perfectly analagous to cycling, and clearly I have a 10-bagger on my hands. Read on...

So far I have invested a certain amount of money into a bike and a bunch of accessories. I have no plans to buy 10 bikes, and even if I did, I would not expect one or two of them to make me lots of money, let alone become a 10-bagger. I have made one follow-on investment, in the Garmin Edge 305 which is a multi function device for cyclists (GPS to track my routes and a heart monitor so I can see if I am in the right cardio-training zone). This follow-on investment is unlikely to be my last. However, that still does not make it more likely to be a 10-bagger.

The returns on my investment might be considered a 10-bagger from other angles however.

First my health: I am in good health, and plan to stay that way. My father, Alec Brian Dale (z"l), died at age 42 of a sudden heart-attack, so heart-health is on my mind. Those who are tuned in to this will understand my joy at now being 43 (last year was not the most relaxed of my life). My cholesterol numbers are good, my blood pressure is great, my weight is tolerable, my stress levels are pretty manageable, and I exercise on that bl**dy (I'm a Brit, don't you know) Nordic Track machine throughout the year. However, I have been aware that I could be exercising more, and this venture cycling is what is getting me going.

Obviously, it is not just the fact I own a bike that has me riding it ... I have also committed to riding in the Hazon bike rides. That means training up to do 120 miles over two days later this summer, and if I can manage it, the 250-300 miles of the Israel ride next spring. I am guessing the latter means lots of spinning classes over the winter. However, if I maintain the increased level of exercise I have undertaken since purchasing this bike, then I do feel I will have a 10-bagger on my hands. I will surely be stronger, have more stamina, and may yet fit in those 35" waist shorts again.

This gets me to the second way I may have a 10-bagger on my hands. Over the years I hope to raise more money for charity than just 10 times the investment in the bike and its sundries. As you know I am starting with the Hazon 2006 New York Bike ride. I will be ramping up my fundraising for this in the next couple of weeks. If you want to help out, please go right ahead.

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