Shownotes
BIO: Shaye Heffernan has a Ph.D. in Economics and has done several IPOs that have surpassed a market cap of a billion dollars.
STORY: Shayne lent his friend of 20 years $6 million in the agreement that he’d get a stake in his friend’s business. That business failed, so Shayne never got his money back nor made anything from the friend’s company.
LEARNING: Lending money to friends is a terrible idea. Have very clear agreements when lending money.
“Keep your friends as friends and your business as a business. Don’t try to mix those up.”
Shayne Heffernan
Guest profile
Shaye Heffernan has a Ph.D. in Economics and has done several IPOs that have surpassed a market cap of a billion dollars.
Worst investment ever
Shayne’s friend of 20 years came to him in Hong Kong in tears wanting $6 million to save his business. The friend was also being thrown out of his house within the next 48 hours. Shayne felt sorry for his friend, so he lent him $6 million. The agreement was that he’d get his money back and some returns once the friend rebuilt his business.
Shayne didn’t do any due diligence, and the agreement was written quickly without thought. He just transferred the money to his friend immediately.
Shayne’s friend built his next venture, which got listed and went through the roof. Shayne was celebrating as the company had a valuation of about $10 billion. So his friend’s stake was worth about $6 billion. Shayne thought he would be rich! He called his friend to follow up on the agreement. His friend said that this was a second venture, the first one (which he insisted was the one they agreed on) had failed. So Shayne didn’t get his $6 million back or make any money from his friend’s business, which he saved.
Lessons learned
- Urgent deadlines are an enormous red flag.
- Lending money to friends is a terrible idea.
- Have very clear agreements when lending money.
- Take your time before coming to someone’s financial rescue and see what happens.
- Keep your friends as friends and your business as a business. Don’t mix the two.
- Everyone you owe money to is your problem.
Andrew’s takeaways
- Don’t be a hero. You can’t save the world.
- Your obligation is only to your family and your business partners and to protect your wealth for yourself.
Actionable advice
Learn to be patient and get over yourself in terms of your ego.
Shayne’s recommended resources
Shayne recommends reading I Am Right, You Are Wrong. The book will help you learn how to look beyond the argument, and the powerful emotional rhetoric, get to the facts, and see what’s right and wrong.
No.1 goal for the next 12 months
Shayne’s goal for the next 12 months is to teach his sons how to run a trading desk.
Parting words
“Just be careful.”
Shayne Heffernan
[spp-transcript]
Connect with Shayne Heffernan
Andrew’s books
Andrew’s online programs
Connect with Andrew Stotz:
