You don’t always need to be a professional investor to get the best investment returns — just keeping an eye out for opportunities can also do the trick.
Ed Bogus, a musician from San Francisco, had become an early investor in PayPal because he’d played chess with co-founder Peter Thiel, and was impressed by his skills and tenacity in the game. As per Jimmy Soni, the author of The Founders, Bogus had become an investor in Confinity, which later became PayPal.
Bogus said that in his early years, when Peter Thiel was finding his feet in Silicon Valley and looking to build a company, he was also playing competitive chess. Thiel was a serious chess player, and has had a peak rating of 2,199, while the grandmaster norm is not too far away at 2,500. Ed Bogus also played chess, and he and Thiel would often square off at chess tournaments in Palo Alto.
Bogus was impressed with how Thiel played chess, describing his playing style as “merciless”. The two had become acquaintances, and one day Thiel showed up at Bogus’s house. He was looking for friends and family investment into his company. Before Thiel had even fully explained what he was doing, Bogus stopped him, immediately wrote a check, and gave him the money.
“Peter was so ruthless, so merciless in his style of play that I knew that anything he did, he would make it successful,” Bogus later said. “That’s why I did it. It’s one of the best investments I’ve ever made in my life, because I got in early on this company that later became PayPal,” he added.
Peter Thiel’s chess skills are well-known in the valley. Not only was Thiel extremely good at chess, he was also extremely serious about it. In the early days of PayPal, Thiel with other co-founders like David Sacks often played chess games, and Thiel was notoriously hard to beat. Hikaru Nakamura, the current world number 2, has said that Thiel is likely the best chess player from the tech world. And not only did his tenacity at the chess board earn him an early angel cheque when he was starting out, but it also helped Ed Bogus gain make a killing by observing Thiel’s playing style, and betting that it would serve him well in the business world.