@FinanceYF5: 1/ Invest in people first, then wait for the company to grow. After Cursor was acquired by SpaceX for $60 billion, Ali Partovi wrote a prequel. What he really wanted to say was: Neo bet on the people who would build the company three years before the company even existed.

1/🔥 Bet on the people first, then wait for the company to grow

After Cursor was acquired by SpaceX for $60 billion, Ali Partovi wrote a prequel.

What he really wanted to say was: Neo had already bet on the people who would build the company, three years before the company even existed. 👇 https://t.co/QO1y6BYAy9

1/ Bet on the people first, then wait for the company to grow

After Cursor was acquired by SpaceX for $60 billion, Ali Partovi wrote a prequel.

What he really wanted to say was: Neo had already bet on the people who would build the company, three years before the company even existed.

2/ First impressions: code on paper

In 2019, MIT freshman Michael Truell was doing a pen-and-paper coding challenge in a café, and wrote a clean solution in just a few lines.

Then he turned around and gave Ali a harder problem; Ali starred it and wrote “A+” on the spot.

3/ Neo bets on people

Ali describes Neo as a “people capitalist” — it doesn’t just look at companies and valuations, it looks at people much earlier.

They brought Michael, Aman, and Ben into Neo Scholars first, supporting them with mentors, connections, and bootcamps, until they grew into founders.

4/ The trickiest part was pricing

In spring 2022, inflation and interest rate hikes slammed the VC market into a halt, and Cursor was raising its first round.

Ali wanted to cut the valuation by 30%, but his 23-year-old colleague Stephen Corn warned him: don’t lowball a superstar.

5/ They only cut it by 10% in the end

Michael and Aman showed no signs of wavering. Neo raised its offer, ending up just 10% below their original terms.

Ali later said that was probably the last time Cursor got a haircut from an investor.

6/ The real takeaway from the prequel is people

The real thread: before the company even existed, who had already shown the ability to attract strong people.

The hardest part of early-stage investing is recognizing the person before the consensus forms.

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