I Made My Daughters Venture Capitalists

In most of my blogs, I share how I spoke with my daughters to help them learn something new about money. I then hope they take action based on what they've learned.

This week was different.

I put them in a position where they had to make a major financial decision themselves. The chance to become Venture Capitalists.

I wanted to share this with you because I believe kids learn far more from making a decision than from being told about one.

The Deal

I offered them the chance to invest some of their own savings in my new children's book, Frankie Fortune, in exchange for a 10% share of its future profits once it's released.

The amount they would need to invest would be quite large, equivalent to around 25% of their current savings.

After I made the offer, it occurred to me: Had I just encouraged them to break one of the biggest investing rules I teach?

[Note: I made sure they knew accepting the deal was entirely their choice. No pressure, no pitch. If they said no, that was completely fine with me. This was about giving them the experience, not talking them into a deal.]

A Golden Rule of Investing

One of the most important lessons in investing is diversification.

If you put all your money into a single company, you're taking on unnecessary risk. Most people are far better off spreading their investments across hundreds or even thousands of companies through low-cost index funds.

That's exactly what I do with my daughters' savings. Their money is invested in the stock market and spread across thousands of companies to keep their risk low.

👉 Read more: How. to teach your kids about the stock market

This deal meant they'd be heavily concentrated in a single investment: my book.

If the book doesn't do well, they might never get all their money back. If it does well, they could make far more than they put in.

A new source of income

But there's another kind of diversification at play here too: income sources.

I explained to my daughters that most people rely on a single source of income, their job.

One potential advantage of the deal would mean they would have three different forms of income: pocket money, returns from their savings/investments, and income from book sales. (My eldest has her own book coming out later this year which would be another new source!)

Stocks vs. Venture Capitalists

I explained that this was different from ordinary stock market investing. They'd be acting more like venture capitalists, investors who back companies just starting out rather than well established companies.

Stock Investor	Venture Capitalist
Invests in established companies	Invests in new businesses
Diversifies broadly	Accepts higher risk
Little influence over success	Can actively help the business succeed

I was upfront that I'd never actually been a venture capitalist myself. I've only ever invested through the stock market and in my own company, Blue Tree Savings Ltd.

(I know this deal isn't technically venture capital - it's really them investing in royalties. But it was too good an opportunity to pass up for teaching them about a different kind of investment.)

Managing the Risk

The best part of this whole experiment was that both of my daughters, completely independently, started asking questions. Good ones.

My youngest was suspicious. She wanted to know if this was another "Scammy Sam", a character I've used before to teach them how to spot a scam. I reassured her this wasn't one of those.

My eldest actually asked AI for its thoughts on the deal, and what questions she should ask me back.

Between them, they wanted to know:

• How much would they get from each copy sold?

• How many copies would need to sell before they got their money back?

• How many copies of Grandpa's Fortune Fables (my first book) did I sell?

• How much would they still have left in savings after the deal?

  
  

I told them I'd never offer a deal that put all their savings on the line, that would be too risky even for me to ask of them. I answered everything as honestly as I could.

And, naturally, the question that mattered most to both of them: had their sister already agreed?

Negotiations

What impressed me even more than the questions was that they both tried to negotiate.

One wanted a bigger share of the profits for the same investment. The other wanted the same share for less money.

I held my ground, I wasn't moving unless they were willing to give something up too.

That's when they came up with something amazing:

We earn 50% of the profits on the books we sell directly.

I loved it. It turned them from passive investors into active ones, exactly what a lot of real venture capitalists do. I said yes immediately to that amendment to the deal.

What I really like about this amendment is that it will encourage them practice their sales skills. I believe this can be very valuable as they grow up.

👉 Read more: How to teach your kids to sell

Deal Accepted

After a proper back-and-forth, both girls accepted the deal. We logged it on their money-tracking spreadsheets and made the transfer.

I was nervous about offering this deal in the first place. But I think it's going to be one of the more valuable money lessons they'll have this year, not because I explained anything new, but because they lived through the decision themselves.

Fingers crossed the book does well. Otherwise, they may never trust me again. 🙂

---

📒 NEW BOOK ... now available

Frankie Fortune: The Boy Who Believed The Internet

It follows a kid on a mission to get rich… by copying what he sees on the internet. As you can imagine, it doesn’t quite go to plan. Along the way, your kids will learn powerful money lessons through Frankie’s misadventures.

👉 Learn more here

---

Try This With Your Own Kids

You don't need a book launch to do this. Any real opportunity, with real money and a real chance of losing it, works. A lemonade stand. A small resale project. Buying into a sibling's business idea.

A few ways to turn it into a genuine experience rather than just a lesson:

• Let them ask you the hard questions first. Before they commit, have them ask: How could I lose money on this? How could I make more than I put in? What's left if it all goes wrong? If they can answer those three, they understand risk better than most adults.

  
  

• Let the amount sting a little. If there's nothing meaningful at stake, there's nothing meaningful to learn. It doesn't need to be large, it just needs to matter to them.

  
  

• Let them see it through. Whatever happens, profit, loss, or somewhere in between, let them feel the outcome. That's the part that makes it real.

  
  

I'm a strong believer that we learn through experiences, good and bad, so the more experiences kids have, the better placed they will be when they are adults.

👉 What to read next ...

• How. to teach your kids about the stock market

• How to teach your kids to sell

• Grandpa's Fortune Fables: stories that teach kids more about money than most adults know

Thanks for reading!

Will

P.S., If you have already read Grandpa’s Fortune Fables, it would mean a lot if you could leave an online review. It really does help the book reach more families.