Dear Startup Investor,
We recommended Trustify in late July.
Back then, it lacked a major investor.
But we liked the company so much, we recommended it anyway.
A few weeks ago, it landed its big fish – Lowercase Capital.
This venture capital (VC) firm is one of the best in the business. Its 2010 fund has already increased in value by an estimated 216 times, according to documents leaked to Fortune earlier this year. It invested in Posterous (bought out), Tello (bought out), Locu (bought out) and Twitter (IPO’d).
But remember this.
While Lowercase Capital was early, our investment recommendation was earlier. By nearly half a year.
So while it got in at a nice price point, we got in at half the price it did.
Trustify’s current raise is being done at a $10 million valuation.
In the previous round – the one in which many of you participated in – its valuation was $5 million.
We’ve already made 2X in less than six months.
The Power of Traction
Trustify has shown unusually strong traction during these past few months.
I’m sure it’s a big reason why Lowercase invested.
We’re not surprised. We saw it coming.
But sometimes things don’t work out.
Not this time, though…
Our timing couldn’t have been better. We were seeing the very first signs of Trustify’s business taking off… and thought it had a good chance of beating short-term expectations.
That is exactly how things played out. But you never know for sure.
So, on the one hand, we deserved the lower price.
On the other hand, we knew when we invested that we had a strong hand.
That’s how early investing works.
You get rewarded more when you see things a little earlier than other investors.
In this case, those “other investors” include Lowercase Capital.
Our reward?
Whatever Lowercase ends up making, we’ll make twice as much.
Invest early and well,
Andy Gordon
Startup Investor Portfolio
