The Business On: Michael Moe, founder, GSV Capital
Wednesday 29 June 2011
Who's he, and what's GSV?
Mr Moe is an American research analyst turned investment writer turned fund manager, with quite a following on America's West Coast. He founded GSV earlier this year to invest in hot private companies.
You mean he is one of those blowing the new tech bubble?
That is one way of looking at it. GSV has echoes of the dot.com boom of a decade ago, when publicly quoted investment vehicles sprung up to allow ordinary investors access to frothy start-ups. And then there is what happened on Monday this week ...
Monday this week?
Mr Moe said he had put $6.6m (£4.1m) of GSV's money into shares of Facebook – a "one-of-a-kind business which has created enormous network effects", he called it. He might as well have just called out: "Stampede."
Investors decided buying GSV shares was the equivalent of getting in early on Facebook's flotation next year, and GSV shares soared 42 per cent. GSV's market value went up $14m, which implies those investors believe Facebook could triple in value.
Maybe it will
Maybe it will. Mr Moe has certainly spotted bargains before. He madehis name when, in 1992, he predicted that a humble coffee chain called Starbucks was going to become a global superstar. And he didn't even drink coffee.
What's the secret?
No secret. In fact, it is boilerplate investment theory. Look for the "Four Ps": people, product, potential and predictability. If these sound "corny and unsophisticated", he says, "they are". But apply them properly and, as per the title of his book, you could be Finding the Next Starbucks.
Um, the largest social network is hardly an undiscovered gem
That is, indeed, one way of looking at it. If Facebook is the new Starbucks, I'm a skinny latte.
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