Nassim Nicholas Taleb spoke about his book, Antifragile, to the RSA (Royal Society for the Encouragement of the Arts, Manufactures and Commerce) in Britain. He summarized the core ideas in his book in a little over six minutes and spent another 12 or so minutes talking with a couple of young Britishers. One is Rohan Silva, senior policy adviser to Prime Minister David Cameron, and the other is Fraser Nelson, editor of The Spectator magazine and columnist for the Daily Telegraph.
Silva spoke of tax breaks for “angel” investors. These are people who provide money for start-up businesses, similar to the “angels” for Broadway shows, usually in return for a share of the stock. They come in at an earlier stage of the business than venture capitalists, and they almost always risk their own money, unlike the administers of venture capital funds. Since most angel investors are doomed to lose their money, it is right that the few who are successful should get rich. If you’re going to give tax breaks to investors, they’re the ones who should get them.
Equity investing fits Taleb’s ideas of optionality and “skin in the game.” An equity investor risks his or her money, but only the amount invested. The potential gains have no fixed limit, but the equity investor only gains if the business gains. This is different from a leveraged buyout, in which a company is loaded with debt and the financier gains even if the business fails.
I find Nassim Nicholas Taleb’s ideas always interesting, mostly plausible and valuable not because he provides the key to every problem, which nobody can, but because he sees things that other people don’t notice.
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