Stories · Investing
A friend asks you to invest
Your college friend Jay quit his job to open a neighborhood bar and wants you to write a $20k angel check for 5%. He showed you a business plan that pays back in 18 months. That $20k is a third of your savings. Tonight you're having dinner to talk it over.
Who you're talking to
Jay, your college friend, now a founder.
(fills your glass) Come on, drink first! You've seen the plan. Pretty good, right?
Questions to start with
- “How much have you put in yourself?”
- “How did you get 18 months to pay back?”
- “What will the $20k mainly go to?”
Jay won't volunteer everything. Some of what matters only comes out if you ask the right follow-up questions.
Questioning habits this story trains
- Ask about the downside they skipped. For example: “What's the worst that could happen?”
- Get the story behind a number. For example: “From what to what? Compared with what?”
- Ask where the evidence comes from. For example: “How many cases like that? Who says so?”
- Don't let pressure or friendship push you. For example: “What happens if I answer in two days?”
The decision
When you've heard enough, you give Jay your answer face to face. The choices include:
- Invest $20k on his terms
- Invest $5–10k and join as his finance adviser, reviewing the books monthly
- Invest nothing, but help him rebuild the financial model and cost control for free
- Just say no
Then you read what happened a year later, see how sound your decision was, and get notes on the key moments of your conversation with a better way to say each.
Rehearse this conversation for free. New accounts get 2 free rounds. One round takes under 10 minutes.
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