Today is my last day at Canaan Partners. I have spent nearly five years at Canaan and in preparation for this moment, I looked inwardly at what has driven my decisions to date. The intent of this post is less of a look forward, but more of a look back…like way back.
My parents are Iranian immigrants. My mom, born in Tehran, came to the US in September, 1978 and my dad, born in Shiraz, came to the US in March, 1975. My parents were family friends in Iran and came to the US, along with siblings, to receive an education from a US college. At the time, my grandparents, who lived in Iran, financially supported my parents by sending money to their accounts for tuition, food, gas, utility bills, etc.
The Iranian Revolution began in 1978 and finalized in 1979. Over that period, the pro-Western absolute monarchy (Pahlavi dynasty) was replaced with an anti-Western theocracy (Islamic republic under the rule of Ayatollah Khomeini). In 1978, the US began placing significant economic sanctions on Iran, which only intensified in November, 1979 with the hostage crisis.
One of the specific consequences of those imposed sanctions was that Iranians living or studying in the US had access to Iranian funds frozen. Remember that allowance sent to my parents each month? Frozen. So here are my parents, two individuals who can barely speak the local language with no access to money. My dad and his friends bought a lawnmower and started soliciting individuals to mow their lawns, while my mom grabbed a job at a nursing home. Soon cafeteria meals transitioned to Persian-inspired ramen.
When my parents tell me these stories, they reflect on them fondly, but in that moment, I can’t imagine the pit in their stomachs. The financial stress was only intensified by media-driven racism towards Iranian immigrants.
Throughout my childhood, my family was frugal. We rarely took vacations or spent money on luxuries. I am fortunate that we always had food on our plates and shelter over our heads. But even more fortunate for the never-ending stream of love and support from my parents. However, at some point, I must’ve developed some emotional trauma with money. At age 4 or 5, I can remember running errands with my mom and tallying everything she spent money on over the entire course of the day, reciting the sum when we returned home as if I were her accountant. I didn’t do this to practice my math skills. I did this because I thought we were going to run out of money.
That emotional trauma has come at a much more significant cost - a bad case of loss aversion, the tendency to prioritize avoiding losses over earning gains. Some studies show that losses are twice as powerful, psychologically, as gains. Logically, this makes no sense. The most basic probability class will tell you a 50/50 shot of winning or losing $100 nets an expected return of $0. But when you grow up thinking you don’t have any money, losses become ten times as powerful, psychologically.
Loss aversion was something that I struggled with for my entire youth. It goes without saying that it is not a desirable skill for a venture capitalist. Fortunately, through consistent practice and execution over the last decade, I have unwound the majority of that trauma. Frameworks like the ones I’ve written about before are integral to my investment process. They help me replace emotion with logic.
I’ve always wanted to do something entrepreneurial. It is a challenge to build something of value and compete at the highest level of the game. In my opinion, nothing is more rewarding. However, doing that means leaving a safe, comfortable, cushy, and predictable salary - something 1993 mini-accountant Hootie would certainly not approve.
So here I am, standing face-to-face with the loss aversion final boss, losing a steady salary for the opportunity of building something from the ground up.
What am I doing next? Well, I can't say much, butmy family's experience also helped shape that decision. More details revealed in part 2.
1. Special thanks to Jared Newman and John Necef for editing.