Humility. Self-effacing enlightenment. Frank chatter about the ones that got away. You really don't expect to hear much of that from a venture capital firm. However, that's just the meaty morsel that Bessemer Venture Partners is providing its readers in its brilliant Anti-Portfolio perspective, which offers a glimpse into some lucrative stock market winners that the company had the misfortune to pass on, early in their growth cycles.
How would you like to have missed out on participating in the venture capital financing of FedEx (NYSE:FDX)? Not once, but seven times? Or consider this nugget on Bessemer's David Cowan and his blown chance meeting with Google (NASDAQ:GOOG) founders Sergey Brin and Larry Page:
"Cowan's college friend rented her garage to Sergey and Larry for their first year. In 1999 and 2000, she tried to introduce Cowan to 'these two really smart Stanford students writing a search engine.' Students? A new search engine? In the most important moment ever for Bessemer's anti-portfolio, Cowan asked her, 'How can I get out of this house without going anywhere near your garage?'"
Don't shed any tears for Bessemer. As one of the oldest venture capital firms, it has been successfully banking on stock market winners since 1911. Earlier this month, Bessemer was one of the lucky financiers that made a modest investment of $1 million-$2 million in Skype pay off at least a hundred times over when the communications software specialist agreed to a $2.6 billion deal with eBay (NASDAQ:EBAY).
Yes, the firm had first seen eBay as a "no-brainer pass" when it had the opportunity to buy into the wildly popular auction marketplace before it went public. It then missed out on PayPal's Series A round of financing, four years before eBay would swallow the fast-growing online-payment giant in a $1.5 billion deal. But through Skype, Bessemer finally got to eBay -- and in a major way.
Tapping into your inner anti
We're all a lot like Bessemer. In all candor, we can all reflect on that perfect buying opportunity that we let slip through our fingers. I can certainly belly up to the bar on that one. I've been a Fool since 1995. I saw David Gardner handpick market thumpers such as Iomega, AOL (now part of Time Warner), Amazon.com (NASDAQ:AMZN), and, yes, even eBay for his Rule Breakers real-money portfolio. Heck, I often found myself writing some of the daily recaps for the site, detailing the marvelous news behind these dynamic companies.
I didn't shy away from the Stanford garage. I went in with a sleeping bag, some Fritos, and a Parcheesi board. I was there, alongside David's blockbuster picks, yet I passed on them all.
AOL? Nope. Too many busy signals for me. The stock soared by 2,418%.
Iomega? Zippo. Cobalt blue looks sweet, I thought, but it's only data storage. The portfolio's $5,063 investment in 1995 was cashed out for a sum of $26,407 over the next four years.
Amazon? Passola. Books are too heavy to ship on demand for a profit, I reasoned. The e-tail leader surged 576% higher.
I can laugh about it now, of course, though the opportunity costs were real. I also can retrace my confirmation slips to pinpoint where I sold CMGI (NASDAQ:CMGI) too soon or bought way too many companies too late to make a difference.
Getting it right the last time
I'm not sure why they call it "paying" attention. My experiences have taught me that the only time you really pay any kind of price is when you don't pay attention. So if attention is a currency, let's rob the bank. Let's print more bills. I invest with my eyes and ears wide open these days.
As a member of the Rule Breakers team of analysts, I'm making sure that I don't make the same mistake with the newsletter that I made with David's real-money portfolio through the 1990s. The newsletter presents the same ultimate-growth philosophy. And it provides the same average-busting result, so far. In its first year, the newsletter has seen its average pick more than triple the S&P 500's market return.
That's why I'm proud to have Akamai (NASDAQ:AKAM) in my portfolio these days. I also made out nicely with Intuitive Surgical (NASDAQ:ISRG) earlier this year. They are both trading nicely higher since they were singled out as worthy in Rule Breakers earlier this year. Every month, I'm coming across two mouthwatering recommendations in every issue. But I abide by trading restrictions that prohibit me from champing at the bit right away, while you don't have to. You can go and sign up for a free 30-day trial subscription and kick the tires for yourself.
Either way, take a stand and abolish your anti-portfolio. Learn from your mistakes. Profit from those lessons. It's the best way to show blown opportunities who's boss.
FedEx, Time Warner, Amazon, and eBay are Motley Fool Stock Advisor recommendations.
Longtime Fool contributor Rick Munarriz would rather wax nostalgic about the ones he nailed than the ones that got away, but that's what the anti-portfolio is all about. He does own shares of Akamai. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
