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Angel: How to Invest in Technology Startups—Timeless Advice from an Angel Investor Who Turned $100,000 into $100,000,000
One of Silicon Valley’s most successful angel investors shares his rules for investing in startups. There are two ways to make money in create something valuable—or invest in the people that are creating valuable things. Over the past twenty-five years, Jason Calacanis has made a fortune investing in creators, spotting and helping build and fund a number of successful technology startups—investments that have earned him tens of millions of dollars. Now, in this enlightening guide that is sure to become the bible for twenty-first century investors, Calacanis takes potential angels step-by-step through his proven method of creating massive startups. As Calacanis makes clear, you can get rich—even if you came from humble beginnings (his dad was a bartender, his mom a nurse), didn’t go to the right schools, and weren’t a top student. The trick is learning how angel investors think. Calacanis takes you inside the minds of these successful moneymen, helping you understand how they prioritize and make the decisions that have resulted in phenomenal profits. He guides you step by step through the process, revealing how leading investors evaluate new ventures, calculating the risks and rewards, and explains how the best startups leverage relationships with angel investors for the best results. Whether you’re an aspiring investor or a budding entrepreneur, Angel will inspire and educate you on all the ins of outs. Buckle up for a wild ride into the world of angel investing!
288 pages, Hardcover
Published July 18, 2017
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Displaying 1 - 30 of 283 reviews
July 28, 2017
I doubted this book would be particularly useful to me, as I do this stuff for a living and have done 50+ early stage investments. Not so - while this book is aimed at a mass market and some of the info is quite basic, its filled with absolute gold for folks already doing this professionally. And having read everything else out there on VC investing, I can say this book is by far the best. Highly recommended.
September 3, 2017
Hard won lessons without promotional self-delusion
Honestly, I thought there was a good chance that this might well be a self-congratulatory business memoir that would be a thinly veiled promotional effort for the author's next venture. Despite these misgivings, I was so eager to compare my own angel investing experience with someone else's that I impulsively purchased the book. --and then I couldn't put it down.
This book seemed to be written for novice angel investors, but it actually would fit all investors. The author's suggestion to reread the book after a few years of investing and again a few years after that is very valid. As an experienced angel investor, I probably fit into that readership who should be on their second read, and as such I took away more from this book than any other book on the subject. It's remarkable to find a book that is this accessible on so many levels. Plus, it's a delight to read and thoroughly enjoyable--even or especially when cautionary examples hit too close to personal experience.
Honestly, I thought there was a good chance that this might well be a self-congratulatory business memoir that would be a thinly veiled promotional effort for the author's next venture. Despite these misgivings, I was so eager to compare my own angel investing experience with someone else's that I impulsively purchased the book. --and then I couldn't put it down.
This book seemed to be written for novice angel investors, but it actually would fit all investors. The author's suggestion to reread the book after a few years of investing and again a few years after that is very valid. As an experienced angel investor, I probably fit into that readership who should be on their second read, and as such I took away more from this book than any other book on the subject. It's remarkable to find a book that is this accessible on so many levels. Plus, it's a delight to read and thoroughly enjoyable--even or especially when cautionary examples hit too close to personal experience.
July 20, 2017
I got the audiobook and this one came at the perfect time since I've recently made investments in 4 startups and plan on making many more over the course of my career.
Jason Calacanis is known in the Bay to be one of the top investors angel or otherwise and also a very entertaining guy you'll see often on CNBC and the like. He's a Brooklyn dude, so he's known for his bluntness which comes across amazingly in the audiobook version. If you have any interest in understanding how startups get funded, want to be an angel yourself, or are thinking about starting a company and want to understand how angels think, this is a VERY practical crash course on WHY it's important and HOW to get involved and do it.
Calacanis says it best early that he felt like the book should have been written before, but it hadn't yet. After reading this, I felt the same way. This book is up there with The Hard Thing About Hard Things in terms of best business books out there IMO.
Don't expect management advice like every other business book out there. This book is about how companies get off the ground with typically first money in and the impact that can have on you as an investor or the world at large by funding the innovation occurring in the world.
Jason Calacanis is known in the Bay to be one of the top investors angel or otherwise and also a very entertaining guy you'll see often on CNBC and the like. He's a Brooklyn dude, so he's known for his bluntness which comes across amazingly in the audiobook version. If you have any interest in understanding how startups get funded, want to be an angel yourself, or are thinking about starting a company and want to understand how angels think, this is a VERY practical crash course on WHY it's important and HOW to get involved and do it.
Calacanis says it best early that he felt like the book should have been written before, but it hadn't yet. After reading this, I felt the same way. This book is up there with The Hard Thing About Hard Things in terms of best business books out there IMO.
Don't expect management advice like every other business book out there. This book is about how companies get off the ground with typically first money in and the impact that can have on you as an investor or the world at large by funding the innovation occurring in the world.
August 4, 2021
While the author has disturbing delusions of grandeur this book is packed with specific, useful information that I wished I had solidified before making my first investments. Should be mandatory reading before handing your money over to startups.
July 26, 2017
The book is a pretty accurate account of how the Startup world works and how you can still be a part of it even if you are not a founder – be an Angel Investor then. Like any other investment vehicle which has unlimited upside and limited downside – it can be risky.
Jason clearly spells out that if you cannot handle losing all your angel investments do not read the book.
He explains about how you should sift through hundreds of startup ideas and founders to find the right one to fund. Like any other investment vehicle promising amazing upside, you need to do a lot of work here as well. Meet the founders, understand the business, why the idea will succeed now and why it didn’t in the past. Join syndicates and see up close how experienced Angel Investors invest in Startups.
Chapter-7 outlines in detail about a Startup lifecycle – how the funding rounds progress. From Self-Funding/Bootstrapping to Seed/Angel Funding to Bridge Round to Series A to Series B/C/D/E/F.
Now the book can put you off as it is in your face, loud, huckster-like. The author is pretty blunt and he doesn’t seem to miss an opportunity to remind you of his successful investments in Uber, AirBnB.
The main thing I don’t like about is that it is directed towards someone who has a net-worth of $10mn and the author clearly says that you should be fine with losing 2~2.5% of the net-worth. Also, with a caveat that you can always earn that back from the stock market at 3~4% returns. But what about lesser (rich) mortals? They would not even get a seat at the table if they were to invest 2~2.5% of their net-worth and investing more brings other existential risks.
However, the author has been candid which is refreshing. The book has some noteworthy one liners.
The key thing from the book for me is this - We have been conditioned by the society, friends and parents to be helpless, so we spend our free time lying on the couch, watching TV, sliding into depression. We’re just another monthly subscription and random ad clicker for the corporate world. We could better use our time to learn any skill which would make us more able, more worthy.
Jason clearly spells out that if you cannot handle losing all your angel investments do not read the book.
He explains about how you should sift through hundreds of startup ideas and founders to find the right one to fund. Like any other investment vehicle promising amazing upside, you need to do a lot of work here as well. Meet the founders, understand the business, why the idea will succeed now and why it didn’t in the past. Join syndicates and see up close how experienced Angel Investors invest in Startups.
Chapter-7 outlines in detail about a Startup lifecycle – how the funding rounds progress. From Self-Funding/Bootstrapping to Seed/Angel Funding to Bridge Round to Series A to Series B/C/D/E/F.
Now the book can put you off as it is in your face, loud, huckster-like. The author is pretty blunt and he doesn’t seem to miss an opportunity to remind you of his successful investments in Uber, AirBnB.
The main thing I don’t like about is that it is directed towards someone who has a net-worth of $10mn and the author clearly says that you should be fine with losing 2~2.5% of the net-worth. Also, with a caveat that you can always earn that back from the stock market at 3~4% returns. But what about lesser (rich) mortals? They would not even get a seat at the table if they were to invest 2~2.5% of their net-worth and investing more brings other existential risks.
However, the author has been candid which is refreshing. The book has some noteworthy one liners.
The key thing from the book for me is this - We have been conditioned by the society, friends and parents to be helpless, so we spend our free time lying on the couch, watching TV, sliding into depression. We’re just another monthly subscription and random ad clicker for the corporate world. We could better use our time to learn any skill which would make us more able, more worthy.
August 1, 2017
Jason invited us to present at one of his conferences. He's very welcoming and it's great that he supports fledgling entrepreneurs as much as he can. Having been in Silicon Valley the last two years as an entrepreneur and investor, it's a solid book that covers the important points of fundraising. What I'm apprehensive about is the Valley's overzealous nature that has created so much uncertainty in the market, where billionaires are buying bunkers to prepare for end times. Technology is outpacing people's ability to educate themselves to keep up. I always question the ethics behind many investors and entrepreneurs trying to "make the world a better place" through VC backed tech. But I think that's why Jason writes the book - to empower others to invest in what they think will improve the world for the better. We could use more diversity in the investing pool. At the end of the day, no one really knows, but it's probably better that it's not just old white men making the investment decisions.
March 23, 2018
I'm sure this book has very valuable information for someone...but when the author flat out states that you HAVE to live in Silicon Valley in order to make this advice work, he loses most of his audience. That's my only real problem with the book - why market it to the general public, stating that it's for anyone, including the mom in the grocery store, the just-graduated student, etc - when you explicitly state that they have to be located in the Bay Area? If the book was titled "Angel: How to Invest in Technology Startups IN THE BAY AREA," I wouldn't have wasted my time reading the first fourth of the book. DNF.
July 22, 2017
Favorite book (so far) in 2017. Massive highlights! Loved this book. Very actionable and motivating.
December 7, 2022
I enjoyed the book as It has a practical outlook and seems effective in not wanting to waste the readers time but the author made one two many analogies to star wars for my liking lol.
August 14, 2023
first book I read on angel investing. I'm looking to raise. it is useful. general. I wish there were examples of actually dying due diligence and analyzing deals and founders. there are some practical anecdotes
August 14, 2017
I stumbled across Jason's story via a podcast article on Forbes.com. Jason is the kind of guy you would love to have in your corner he lives on the edge of the future of business and technology. He's an inspirational because he's willing to take more swing for the fences hits. Angel is forward thinking and will stretch your understanding about where the world is going. A plus!
Nuggets of Truth:
The American Dream still exists it's just not a widely distributed
The job apocalypse is coming
Sequioa Capital
No gamble no future
If you think small you'll be small
Capital Efficient
I'm in the fuck you money zone
If you think poor you stay poor
Helpful present and considerate
What does revenue look like in terms of revenue and my return?
Be hyper present
Unpack that further
Let's talk about something more company specific
Product market fit
Go to market strategy
Get my investments more attention
That doesn't fit my investment thesis
MMR: Monthy Re-curing Revenue
ARR: Annual Re-curing Revenue
Key Metrics
The big wins come late in the process
Starting is easy finishing is hard
My equity is likely to grow
We have more blind spots then we do clear vision
Execute at the highest level
Put aside massive doubts in logic
Is your startup a vitamin or a painkiller
As I codify my playbook
I need a large multiplier on future investing
One investment goes supernova
Soak in what you learned
We are arguing the merits of the deal
Give some candid advice
Start originating deal flow
Repeat ability
What keeps you up at night? What makes you sleep like a baby?
A wider swath of deals
Growth is prioritized over all else
Grand vision
Large outcomes
I'm a little jaded in terms of my perspective
Nuggets of Truth:
The American Dream still exists it's just not a widely distributed
The job apocalypse is coming
Sequioa Capital
No gamble no future
If you think small you'll be small
Capital Efficient
I'm in the fuck you money zone
If you think poor you stay poor
Helpful present and considerate
What does revenue look like in terms of revenue and my return?
Be hyper present
Unpack that further
Let's talk about something more company specific
Product market fit
Go to market strategy
Get my investments more attention
That doesn't fit my investment thesis
MMR: Monthy Re-curing Revenue
ARR: Annual Re-curing Revenue
Key Metrics
The big wins come late in the process
Starting is easy finishing is hard
My equity is likely to grow
We have more blind spots then we do clear vision
Execute at the highest level
Put aside massive doubts in logic
Is your startup a vitamin or a painkiller
As I codify my playbook
I need a large multiplier on future investing
One investment goes supernova
Soak in what you learned
We are arguing the merits of the deal
Give some candid advice
Start originating deal flow
Repeat ability
What keeps you up at night? What makes you sleep like a baby?
A wider swath of deals
Growth is prioritized over all else
Grand vision
Large outcomes
I'm a little jaded in terms of my perspective
September 7, 2017
I am a big fan of Jason Calacanis. I've subscribed to his podcast "This Week in StartUps with Jason Calacanis". His interviews are superb. He's such a straight shooter and is a joy to listen to.
I listen to the audiobook, which is read by Jason himself. (I think all audiobooks should be read by authors).
If you've been a long-time follower of Jason's podcast, the materials in the books won't seem new as he has mentioned here and there in his blogposts and podcasts. However, the book is the comprehensive and covers all topics in one-guide.
Some key take-aways off my heads:
[1] you have to be in Silicon Valley to do well in angel investing;
[2] you must have one of 4 things: money, time, network, expertise
[3] invest in the founders, don't try (hard) to analyse the business/idea
[4] Jason practiced playing poker (without reading his cards) to read people. That's how he developed his people's judgement.
[5] use the angel syndicates to start off
[6] get founders to send monthly updates (crucial)
There are many more tips but I do not write them all down as I am not planning to do any angel investing. I do not meet the first few criteria to do well.
I listen to the audiobook, which is read by Jason himself. (I think all audiobooks should be read by authors).
If you've been a long-time follower of Jason's podcast, the materials in the books won't seem new as he has mentioned here and there in his blogposts and podcasts. However, the book is the comprehensive and covers all topics in one-guide.
Some key take-aways off my heads:
[1] you have to be in Silicon Valley to do well in angel investing;
[2] you must have one of 4 things: money, time, network, expertise
[3] invest in the founders, don't try (hard) to analyse the business/idea
[4] Jason practiced playing poker (without reading his cards) to read people. That's how he developed his people's judgement.
[5] use the angel syndicates to start off
[6] get founders to send monthly updates (crucial)
There are many more tips but I do not write them all down as I am not planning to do any angel investing. I do not meet the first few criteria to do well.
August 30, 2017
Jason Calacanis offers a playbook for the mysterious world of the generation's kingmakers - angel investing. Though the tips are quite tactical (and thus at times feel out of reach), there are big takeaways for future angels, current investors, and even corporate climbers.
1. The rules to the game have changed. Investing in those that are changing the word is the only surefire way to guarantee outsized returns, and that means focusing on disruptive innovation.
2. Location, location, location. There is something special going on in SF and it is truly the eye of the storm. Surround yourself with the best and the brightest and take advantage of it.
3. Karma is your friend. This is something that the Valley really adopted before the rest of the country. Figure out how you can help those around you (while still setting reasonable boundaries), and the universe will have a funny way of paying you back tenfold (or 50x, or 100x!)
Finally, it's always great to hear things straight from the horses mouth. I loved Jason's performance. Only downside? He could've integrated his tack-on angel interviews better. They felt like research that was included as an afterthought, and offering a better, more consistent voiceover would've helped.
1. The rules to the game have changed. Investing in those that are changing the word is the only surefire way to guarantee outsized returns, and that means focusing on disruptive innovation.
2. Location, location, location. There is something special going on in SF and it is truly the eye of the storm. Surround yourself with the best and the brightest and take advantage of it.
3. Karma is your friend. This is something that the Valley really adopted before the rest of the country. Figure out how you can help those around you (while still setting reasonable boundaries), and the universe will have a funny way of paying you back tenfold (or 50x, or 100x!)
Finally, it's always great to hear things straight from the horses mouth. I loved Jason's performance. Only downside? He could've integrated his tack-on angel interviews better. They felt like research that was included as an afterthought, and offering a better, more consistent voiceover would've helped.
August 20, 2021
In typical Jason Calacanis style - slightly arrogant, yet genuine - he lays out very clearly how to go about putting your first chips on the poker table: How to start betting on startups as an angel investor.
I found it insightful as a founder/operator myself to gain a better perspective of how difficult the job is of an angel investor - what it is they are looking for in a 100x startup and after investing, how to protect their interests.
A direct takeaway I have is to start keeping a list of startups around me and value / qualify them on their potential. Then in a year's time or so, I check back in and evaluate the accuracy of my business antennae.
I found it insightful as a founder/operator myself to gain a better perspective of how difficult the job is of an angel investor - what it is they are looking for in a 100x startup and after investing, how to protect their interests.
A direct takeaway I have is to start keeping a list of startups around me and value / qualify them on their potential. Then in a year's time or so, I check back in and evaluate the accuracy of my business antennae.
December 17, 2023
This is a book about angel investing from one of the best angel investors there are. I enjoyed it and it had some really specific advice that I found helpful, but as the book went on it got a little bit repetitive. Being a good angel investor obviously takes some luck but i had a few takeaways about how to become more proficient at it: network a ton, have a passion for startups that includes going through some rough periods with them, and have some money you don’t mind losing. Very simple! Now i can go become a billionaire!
August 19, 2017
A great read, a very educational and insightful view of the angel and startup world told by someone who has experienced and lived through it all. Not only is the book highly informative, it is a great business biography of Jason's life. As a startup founder I found great value to learn what it's like on the other side and will hopefully use that knowledge to help me grow my startup www.Welcome.AI and be better prepared when the time comes to meet with angels.
August 28, 2017
This book lays out step by step how you too can get a piece of the action... and you don't need to be rich to get started.
OR read this book as an entrepreneur to understand how your potential investors think.
Seriously, read this book.
Jason here is at his finest. He lays bare his history, how he became successful as an investor, and shares his insights and mistakes so you don't have to make them too.
OR read this book as an entrepreneur to understand how your potential investors think.
Seriously, read this book.
Jason here is at his finest. He lays bare his history, how he became successful as an investor, and shares his insights and mistakes so you don't have to make them too.
January 28, 2018
Concentrated startup hustle circa. 2011-2017. Jason does the work and shares a familiar truth that you have to be willing to hustle hard, with very little thanks for a decade to get the best deals/earn the trust. Moreover he shares an actionable step by step minimum investment path. It's both as simple and as hard as the truth of 'Angel'. Do the work.
May 21, 2018
Entertaining and insightful. Very silicon valley-centric though and even some wrong facts when it comes to the world outside US. Still a very good read, lots of interesting stories from the business world.
November 13, 2020
Good Storytelling from the perspective of angels and a individual investors. Been listening to Jason’s podcasts for a while, did not agree everything he said, but appreciate his energy, honestly and sharing. This is a good introductory guide for readers who are interested in the startup world.
July 23, 2017
I found this both entertaining and informative and listened to it on Audible. Jason narrated it himself which I believe to be a strong reason as to why I enjoyed it so much, as his personality excels in this format. I doubt I would have enjoyed it quite as much in a written format, however, I am certain I would have still given it at least 4 stars due to the topics covered in the book. My recommendation though would be to listen to it, especially if you are a fan of This Week in Startups and/or you like/can tolerate Jason's style.
July 27, 2017
Jason really helped me step up my angel investing game. I've invested in 20 companies over the past 2 years and 3 along side Jason. Very excited to read this book!
July 28, 2017
a must read for every first-time founder
March 19, 2019
Really useful, funny and insightful. Recommend!
April 10, 2021
Nice introduction to angel investing and offers motivating insight on how to start in a syndicate for as little as $10,000. Time to get in Angelist 😂
December 26, 2021
Insightful - will be re-reading the physical soon for further notes. A must read for both budding investors and startup founders
December 27, 2022
Calacanis has had one significant investment, which he quite literally got lucky on. This book is just a bozo narcissist talking about how small his member is basically
November 16, 2020
"Fooled by Randomness"
August 2, 2021
Angel is is written by Jason Calacanis, an angel investor with 25+ years of experience. It is a comprehensive book and a great primer on how to become a successful angel without necessarily having a lot of funds to start with.
My learning notes turned out to be pretty comprehensive:
- Angels offer one of the following to startups: money, time (jam with founders on important issues), network (make meaningful introductions), expertise (give actionable advice the saves time/money).
- You should enjoy talking to and having coffee with the range of personalities. Best founders are wild cards, stubborn and unmanageable, pursuing their vision on the expense of other people's feelings.
- Advises to move to Silicon Valley and take vacations to the place you really want to live in, as the networks rooting for you in Silicon Valley are 100x than anywhere else. (This has changed since the book came out in 2017, I think - CHECK TIME).
- Watch out for founders who don't want to work without an investment (indicator for what they do when running out of money). Some people are just good at finding product fit with investors.
- There is little reason nowadays to invest without having a product ready, as getting products to market has dropped from a few million to $20-250k.
- More prolific angel investors like Jason can ask for and keep pro-rata rights (right to invest in subsequent rounds to maintain their ownership %) because he has the "weight" to not bring further companies to the VCs who overwrite his pro-rata rights.
- Advice to a wannabe broke angel: provide your skill, network or reputation to the company in return for shares. Jason advised seven startups each over 2 years in marketing, three of them made him a total of $700k.
- "You're just another subscription and a monthly ad clicker for corporate America. It's time to unplug from The Matrix... If I had known before I would have put angel investor and computer specialist on my business card, and ask everyone around to introduce me to young companies and beg them to let me consult in IT issues"
- Recommends new angels do 10 syndicate investments before direct Investings. Can invest with zero due diligence, beside the current work, with spending just $25,000 over 10 deals of $2500, being on cap tables and learning a ton all the while.
- Look for these in syndicates: syndicate lead has been investing at least 5 years and has one notable unicorn investment, startup that is based in Silicon Valley, startup that has at least two founders, startup that has a product or service that is already in the market, I start up that has either 6 months of continuous user growth or 6 months of revenue, startup that has notable investors.
- Founders love hearing from investors, even those that have put in just $2,500. You should see angel investing as a competition where you're trying to provide more value than any other angel
- For every investment you consider, write a deal memo about what the risks are and what you think has to go right for the startup to return your investment. For every startup you pass, make notes detailing exactly why. You will learn looking back how bad you are at this, and see how you improve.
- Visit the office of each syndicate start-up. You should only invest if you would buy stock in the founders themselves.
- To build your angel network: create a list of all investors in your 10 syndicates. Send a message to each of these potentially 600 investors on the four platforms (email, Twitter, LinkedIn and Facebook). Make a private Twitter list of co-investors and open it once a day to learn how other investors present themselves to the world. Reply and retweet, have a coffee with anyone who would, identifying what value they and convey what value you would bring to start-ups. The meeting should be your peak professional self, like an addition, because he would want to know that you are worth their founders' time. Tell people that they can email you blind about founders are investors without needing a permission. People want to meet with people who are fascinated by the vision so when asking for an introduction to founders communicate what you think their vision is important and how you can perhaps contribute to it.
- When evaluating deals: mark each company as okay/good/great and in one sentence why you will invest or not invest. Every 6 months add another column to the spreadsheet for how each company is doing, specifically if they have raised more money or have gone out of business
- Pitch meetings: Allocate 3 hours for each startup meeting: 1h before each startup meeting for prep, 1h for meeting (leave 30 minutes free after for extra time), 1h for post-mortem. Research includes who are the founders, what the product is, who the competitors are, what the market is like, and who else investing in the company. Most investors don't do enough research or try out the product.
- When getting an email, he asks how many people they have, how much money they have raised, how long they have been in the business, how they acquire customers, why are they in the business.
- 10 one-hour meetings per week is a good for professional angels, 5 if part-time. Be promiscuous with meetings but prude when writing checks.
- At the meeting, you want to ask short concise questions and listen to the answers and write them on paper just like Colombo that detective.
- Investor wants to know four things: why has this founder chosen this business, how committed is this founder, what are the founders chances in succeeding in this business and in life, what does winning look like in terms of revenue and investors return.
- The first 30 minutes of the meeting is spent on these 4 questions, which show deep empathy for the founder and also enable them to let their guard down:1. What are you working on? 2. Why are you doing this? 3. Why now? Why now is the most important question you can ask because there are people trying the same ideas over and over again. Google what's the 12th search engine, Facebook was the 10th social network, iPad was the 20th tablet. It's about who gets there first when the market is ready. What's your unfair advantage?
- The second 30 minutes of the meeting is about tactical details such as go to market strategy, what kind of team they have and competitive landscape, nuances of business models. Ask quick 12 tactical questions: tell me about the competition, how do you make money, how much do you charge customers, how much does your average customer spend, tell me top three reasons why this business might fail.
- Founders should not be at an event that do not result in new customers, investors, or employees.
- When Jason sees the founder or a company, he sends them short three questions asking for: revenue by quarter, how long have you been in business, I've seen a number of businesses in the sector fail why will it work this time? @jason
- If they're reaching out to you before the product, it means they did not have the capacity to convince others to build the product with them over the weekend, and it's not a good sign. You need to focus on startups that have everything including traction that just need extra funds to finish their mission. You want to work with the people doing it, not with the people thinking of doing it if you fund them.
- Investors can meet companies at incubators but they should invest in them 6 to 12 months *after* graduation because by then a lot more has become clear. For all these companies, Jason asks to be sent the monthly updates: seeing a person execute their plan over time is the best way to see if to invest.
- Put a coffee with a founder on calendar 100 days from now and a follow-up call in one year from now (at 20 minutes so founder won't feel it's too much.) Then if it still looks good, Jason asks "is there any way you can extend the round or carve someone else back. I really want to help and make this company success for everyone involved."
- Advice to founders: Be honest with investors so they can help, they're your biggest fans. Just like executive producers are in movies wishing they were directors or actors or screenwriters, angels want to be part of something. Investments pay off in 7 years on average, but 80-90% of investments will fail and mostly in the first couple of years. If you want to make investors feel special ask how their portfolio is doing. If you are the successful company, treat your investors as well as you can; it feels like your most successful child finding time to come and see you. Celebrate your investors so they can take the money and invest it into the next round of founders.
- Monthly updates creates a discipline in founders to keep an ongoing dialogue with investors. Add key metrics for the business, what you consider wins and losses since the last email, requests for current investors, cash balance, burn rate and runway.
- Jason spends 80 to 90% of his weekly time by trying to help the startups. When he walks into a broken company, he does it like a fixer or a plumber, just asking what is wrong
- CEO has to deal with all the problems that smart people on your team cannot solve, it's an assault on all sides and you have nobody to talk to. The CEO's job is to smooth out the emotional roller coaster, never letting your team experience the highest and lows you are feeling. Angel investors job is to be there for the CEO when they are struggling making sure they are heard and that you are on their side.
- Angels usually quit when they hit a huge win. No matter how your returns do, from these 30 investments you can take the knowledge and connections and join a VC firm. If there is success in the portfolio, you could perhaps take a board seat and help build the company to a billion. With 2 to 5 times return, you would have the credibility to raise their own fund. If you hit 5 to 100 times return, soak in the lottery of life and the randomness of it all because your bets probably weren't that different but you got lucky. Almost all investors have the same profile if you take out their top investment and the exact same if you take out top three.
My learning notes turned out to be pretty comprehensive:
- Angels offer one of the following to startups: money, time (jam with founders on important issues), network (make meaningful introductions), expertise (give actionable advice the saves time/money).
- You should enjoy talking to and having coffee with the range of personalities. Best founders are wild cards, stubborn and unmanageable, pursuing their vision on the expense of other people's feelings.
- Advises to move to Silicon Valley and take vacations to the place you really want to live in, as the networks rooting for you in Silicon Valley are 100x than anywhere else. (This has changed since the book came out in 2017, I think - CHECK TIME).
- Watch out for founders who don't want to work without an investment (indicator for what they do when running out of money). Some people are just good at finding product fit with investors.
- There is little reason nowadays to invest without having a product ready, as getting products to market has dropped from a few million to $20-250k.
- More prolific angel investors like Jason can ask for and keep pro-rata rights (right to invest in subsequent rounds to maintain their ownership %) because he has the "weight" to not bring further companies to the VCs who overwrite his pro-rata rights.
- Advice to a wannabe broke angel: provide your skill, network or reputation to the company in return for shares. Jason advised seven startups each over 2 years in marketing, three of them made him a total of $700k.
- "You're just another subscription and a monthly ad clicker for corporate America. It's time to unplug from The Matrix... If I had known before I would have put angel investor and computer specialist on my business card, and ask everyone around to introduce me to young companies and beg them to let me consult in IT issues"
- Recommends new angels do 10 syndicate investments before direct Investings. Can invest with zero due diligence, beside the current work, with spending just $25,000 over 10 deals of $2500, being on cap tables and learning a ton all the while.
- Look for these in syndicates: syndicate lead has been investing at least 5 years and has one notable unicorn investment, startup that is based in Silicon Valley, startup that has at least two founders, startup that has a product or service that is already in the market, I start up that has either 6 months of continuous user growth or 6 months of revenue, startup that has notable investors.
- Founders love hearing from investors, even those that have put in just $2,500. You should see angel investing as a competition where you're trying to provide more value than any other angel
- For every investment you consider, write a deal memo about what the risks are and what you think has to go right for the startup to return your investment. For every startup you pass, make notes detailing exactly why. You will learn looking back how bad you are at this, and see how you improve.
- Visit the office of each syndicate start-up. You should only invest if you would buy stock in the founders themselves.
- To build your angel network: create a list of all investors in your 10 syndicates. Send a message to each of these potentially 600 investors on the four platforms (email, Twitter, LinkedIn and Facebook). Make a private Twitter list of co-investors and open it once a day to learn how other investors present themselves to the world. Reply and retweet, have a coffee with anyone who would, identifying what value they and convey what value you would bring to start-ups. The meeting should be your peak professional self, like an addition, because he would want to know that you are worth their founders' time. Tell people that they can email you blind about founders are investors without needing a permission. People want to meet with people who are fascinated by the vision so when asking for an introduction to founders communicate what you think their vision is important and how you can perhaps contribute to it.
- When evaluating deals: mark each company as okay/good/great and in one sentence why you will invest or not invest. Every 6 months add another column to the spreadsheet for how each company is doing, specifically if they have raised more money or have gone out of business
- Pitch meetings: Allocate 3 hours for each startup meeting: 1h before each startup meeting for prep, 1h for meeting (leave 30 minutes free after for extra time), 1h for post-mortem. Research includes who are the founders, what the product is, who the competitors are, what the market is like, and who else investing in the company. Most investors don't do enough research or try out the product.
- When getting an email, he asks how many people they have, how much money they have raised, how long they have been in the business, how they acquire customers, why are they in the business.
- 10 one-hour meetings per week is a good for professional angels, 5 if part-time. Be promiscuous with meetings but prude when writing checks.
- At the meeting, you want to ask short concise questions and listen to the answers and write them on paper just like Colombo that detective.
- Investor wants to know four things: why has this founder chosen this business, how committed is this founder, what are the founders chances in succeeding in this business and in life, what does winning look like in terms of revenue and investors return.
- The first 30 minutes of the meeting is spent on these 4 questions, which show deep empathy for the founder and also enable them to let their guard down:1. What are you working on? 2. Why are you doing this? 3. Why now? Why now is the most important question you can ask because there are people trying the same ideas over and over again. Google what's the 12th search engine, Facebook was the 10th social network, iPad was the 20th tablet. It's about who gets there first when the market is ready. What's your unfair advantage?
- The second 30 minutes of the meeting is about tactical details such as go to market strategy, what kind of team they have and competitive landscape, nuances of business models. Ask quick 12 tactical questions: tell me about the competition, how do you make money, how much do you charge customers, how much does your average customer spend, tell me top three reasons why this business might fail.
- Founders should not be at an event that do not result in new customers, investors, or employees.
- When Jason sees the founder or a company, he sends them short three questions asking for: revenue by quarter, how long have you been in business, I've seen a number of businesses in the sector fail why will it work this time? @jason
- If they're reaching out to you before the product, it means they did not have the capacity to convince others to build the product with them over the weekend, and it's not a good sign. You need to focus on startups that have everything including traction that just need extra funds to finish their mission. You want to work with the people doing it, not with the people thinking of doing it if you fund them.
- Investors can meet companies at incubators but they should invest in them 6 to 12 months *after* graduation because by then a lot more has become clear. For all these companies, Jason asks to be sent the monthly updates: seeing a person execute their plan over time is the best way to see if to invest.
- Put a coffee with a founder on calendar 100 days from now and a follow-up call in one year from now (at 20 minutes so founder won't feel it's too much.) Then if it still looks good, Jason asks "is there any way you can extend the round or carve someone else back. I really want to help and make this company success for everyone involved."
- Advice to founders: Be honest with investors so they can help, they're your biggest fans. Just like executive producers are in movies wishing they were directors or actors or screenwriters, angels want to be part of something. Investments pay off in 7 years on average, but 80-90% of investments will fail and mostly in the first couple of years. If you want to make investors feel special ask how their portfolio is doing. If you are the successful company, treat your investors as well as you can; it feels like your most successful child finding time to come and see you. Celebrate your investors so they can take the money and invest it into the next round of founders.
- Monthly updates creates a discipline in founders to keep an ongoing dialogue with investors. Add key metrics for the business, what you consider wins and losses since the last email, requests for current investors, cash balance, burn rate and runway.
- Jason spends 80 to 90% of his weekly time by trying to help the startups. When he walks into a broken company, he does it like a fixer or a plumber, just asking what is wrong
- CEO has to deal with all the problems that smart people on your team cannot solve, it's an assault on all sides and you have nobody to talk to. The CEO's job is to smooth out the emotional roller coaster, never letting your team experience the highest and lows you are feeling. Angel investors job is to be there for the CEO when they are struggling making sure they are heard and that you are on their side.
- Angels usually quit when they hit a huge win. No matter how your returns do, from these 30 investments you can take the knowledge and connections and join a VC firm. If there is success in the portfolio, you could perhaps take a board seat and help build the company to a billion. With 2 to 5 times return, you would have the credibility to raise their own fund. If you hit 5 to 100 times return, soak in the lottery of life and the randomness of it all because your bets probably weren't that different but you got lucky. Almost all investors have the same profile if you take out their top investment and the exact same if you take out top three.
August 14, 2017
I read and also listened to the Audible format which is narrated by Jason Calacanis himself. It feels like he is mentoring you personally. Clear insights. Some strategy to start and a few good tips. A must-have book on how to approach angel investing.
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