Venture capital is often referred to as an apprenticeship business because so much important learning comes from day-to-day experiences. Yet, as an article published by the Business Development Bank of Canada (BDC) explains, you can shortcut the learning process by learning from experts: “Your learning curve can be shorter—and your results better—if you learn from pros who’ve already mastered key … ... read more
5 Must-Read Investor Books
Warren Buffet is among many prominent investors who credits much of his success to a passion for reading. He’s said that the key to success is to “Read 500 pages…every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”
When it comes to venture capital and private equity, reading can be a powerful portal through which to gain knowledge and critical insights that can be readily applied to enhance your investment acumen. Here are five must-read books to add to your reading list.
1. The Masters of Private Equity and Venture Capital
Contained within the pages of The Masters of Private Equity and Venture Capital is a gold mine of knowledge. To scribe the book, author Robert Finkel, president and founder of Prism Capital, the $190 million Chicago-based PE firm, interviewed several pioneers of private equity and venture capital. The book offers an inside glimpse into ten leading private investors, including the likes of Bill Draper, Steven Lazarus (founder of ARCH Venture Partners), and Pitch Johnson (founder of Asset Management Company). It is jam-packed with key insights that are top-of-mind for all investors, including how to forage into new markets, how to add value to investments, and how to evaluate investments.
Ellen Carnahan, Principle at Machrie Enterprises, is one of many investors who offers rave reviews of the book. She’s said, “I have been a partner in the Venture Capital business my entire career - over twenty years. I have kept a personal list of "lessons learned" from my investment experience; and, I have read many of the books in the category. By far, this is the very best book in all respects.”
2. Lessons from Private Equity Any Company Can Use
All too often, private equity is seen as a highly esoteric industry. Sure, private equity has unique intricacies that do not apply to other businesses. But, by and large, many of the challenges faced by private equity firms are similarly faced by other industries—how to build a high-growth business, how to stay agile, how to mitigate risk, for example. In Lessons from Private Equity Any Company Can Use, Bain chairman Orit Gadiesh and partner Hugh MacArthur outline five disciplines that PE firms can leverage to gain a leg up in the marketplace:
- Define full potential
- Develop the blueprint
- Accelerate performance
- Harness talent
- Make equity sweat
- Foster a result-oriented mindset
It’s an engaging read from start to finish.
3. The Intelligent Investor: The Definitive Book on Value Investing
The Intelligent Investor is a classic and must-read for any investor. Benjamin Graham's value investing philosophy has become the hallmark of strong portfolio management. The Intelligent Investor outlines a diverse amalgamation of investment topics, including value investing, asset allocation, diversification, and risk management. It contains critical lessons that investors simply can’t afford to overlook. While it was published decades ago in 1949, it remains highly relevant. There’s a reason it has sold more than a million copies and has been eulogized by Warren Buffet as "the best book on investing ever written."
4. King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone
King of Capital details what is arguably the greatest untold success story on Wall Street—the journey of Steve Schwarzman, Chairman, CEO and Co-Founder of Blackstone. The book offers a detailed history of private equity. You’ll gain a VIP look into how Blackstone and other private equity firms were able to transform themselves into disciplined investors and build powerhouses that were able to weather the financial crisis as banks and investment bankers assumed risks and drove the economy to peril.
5. Barbarians at the Gate: The Fall of RJR Nabisco
Barbarians at the Gate chronicles the story behind private equity firm Kohlberg Kravis Roberts’ (KKR) landmark $25 billion leveraged buyout (LBO) of RJR Nabisco. A New York Times bestseller, the book offers top-notch investigative recording featuring the flamboyant personality of Ross Johnson, CEO of RJR Nabisco. It offers an unprecedented look at the personality traits of successful private equity investors. There’s a reason that Jon Friedman of MarketWatch has dubbed the book "the best business book ever.” When you’ve finished the book, check out Barbarians at the Gate, the HBO movie inspired by the book.
Reading is one of the most effective ways to gain a leg up in refining your investment philosophies and strategies. What’s especially great about reading is that the cost of entry is relatively low. As Warren Buffet once said, “Everybody can read what I read, it is a level playing field.” What are you waiting for? Add these five books to your reading list and watch as your investment perspectives change and develop.