The $20 Million Mistake

In The Last Arrow, Erwin McManus shares the story of Mark Floyd, a businessman who convinced investors to place $20 million dollars in an investment that ultimately failed. Instead of crawling into a cave as many of us would feel compelled to do, Floyd not only faced his investors and gave them the bad news, but he had the audacity to ask them for more money for a different venture he believed as a “can’t miss”. Surprisingly, they said yes. McManus’ account is below:

What caught my attention was his telling the story of when he lost $20 million of his investors’ money…Mark had a business idea. He was sure it was a can’t-miss idea, and he was so compelling and persuasive that he found investors who believed in both his idea and his ability to execute that idea. They trusted him with their money and he lost it all. What would you do in a situation like that? Me?

I might just set myself on fire or play my violin like Nero as I watched Rome burn all around me. Mark did the unexpected. He went back to those investors and faced them. That, by itself, took an immense amount of integrity and courage. He faced them and told them that he had lost all their money, but he had a way forward…This, of course, would require them to give him more money.

He had a different idea—a better idea, an idea that couldn’t miss. All they would need to do is trust him and his idea, and he would not only return to them all the money that was lost, but they would also reap the benefits of this new endeavor…

The second idea was DSL (digital subscriber line), which has something to do with fiber optics, communication systems, techy stuff. I don’t even pretend to fully understand DSL; I just know that the modern world has been revolutionized by it. Not only did those investors regain the millions they lost, but they walked away with unimaginable wealth.