Silicon Valley angel investor Jason Calacanis has some advice for the millennial generation: Get your name on a cap table.
In a keynote talk Tuesday night that was a headliner event for Startup Week San Diego, Calacanis observed that it doesn’t feel like the millennial generation is doing as well financially as their parents’ generation. He warned the multi-generational audience that artificial intelligence is going to wipe out a huge swath of the kind of high-paying, white-collar jobs that Baby Boomers once strived for—jobs like business executives and radiologists.
“Now people graduate from college with $200,000 of debt,” Calacanis said. Homes that once cost twice as much as an average white-collar salary in Los Angeles or San Francisco are now beyond the reach of many. “If your average income today is $150,000, your house is $1.5 million,” he said.
The solution that Calacanis offered is along the lines of the course he charted for himself. Born in Brooklyn in 1970, Calacanis started a media company in New York that published print and online newsletters and magazines, including the Silicon Alley Reporter. He organized conferences for Internet startups in the Bay Area, New York, Los Angeles. He sold his second venture, Weblogs, to America Online for $25 million in 2005. He parlayed his proceeds from that deal into his angel investments. He started the podcast This Week in Startups, created the Launch conference, and became a Silicon Valley “super angel” who counts five unicorns among his 125 investments.
He told the Startup Week crowd to follow a similar path as a startup founder, funder, developer, or adviser. “Getting your name on that cap table—that’s the thing that creates wealth,” he said.
Calacanis is not an “aw shucks” kind of guy. As he told the San Diego audience, “I’ve set a goal of being the greatest angel investor of all time. Somebody told me today, ‘God, you’re so conceited.’” Pause. “It’s just marketing.”
It may well be just marketing. But Calacanis shows no hesitation in taking full advantage of his own marketing. His keynote talk was billed as an onstage conversation with James Heller, the founder and CEO of Wrapify, an advertising technology startup backed by Calacanis. But their dialog was really more of a monologue, as Heller had little opportunity to say much of anything beyond, “To be a San Diego startup, you have to be scrappy and you have to go where the money is.”
Calacanis, on the other hand, talked at length about his insights and best deals, and his forthcoming book, “Angel: How to Invest in Technology Startups—Timeless Advice from an Angel Investor Who Turned $100,000 into $100,000,000.”
“The book is as much about how wealth is created in the 21st Century as it is about angel investing,” Calacanis said. “The book is about how the world is changing.”
For Calacanis, the book also serves as a means to an end. Out of every 25,000 people who may read his book (to be published next month), Calacanis said maybe 10 will become angel investors that he will be able to work with in future investment deals. So the deal flow would be better for him. “Angel investing is a collaborative sport,” he said. “The more angels the better.”
For prospective angel investors, Calacanis highlighted Chapter 6 in his book, which asks the question: Do You Need to be in Silicon Valley to be an Angel Investor? His one-word answer (which he said is the entire chapter) is “Yes.”
For the San Diego audience, he explained, “Innovation can come from anywhere, but when you’re investing as an angel investor, your exposure to companies in Silicon Valley is maybe 10,000 times the number you’d see in San Diego, and maybe 1,000 times the number in Los Angeles.”
For the entrepreneurs in the audience, Calacanis said he looks for startup founders with passion, hustle, and craftsmanship—the ability to craft a great product. He said he asks himself, “Does the founder have a passion for what they’re doing, and are they really good at doing things?”
As an angel investor, Calacanis said he’s not interested in entrepreneurs who want to pitch an idea. He wants to see what they’ve made. “I’ve seen people raise $250,000, and give $100,000 or $150,000 to a Web developer, and give another $100,000 to a designer, and $50,000 to a PR person, and then they come back for more money.”
Some other Calacanis quotes:
—“I’m always looking for the right founder,” he said. “I don’t need to know if a company is going to succeed. I just need to know if the founder is going to succeed.”
—“It’s kind of disturbing to see the number of people who want the reward without really putting the work into it,” Calacanis said. “They’re tourists. They’re faux entrepreneurs.”
—“The greatest skill you can have today is the ability to acquire new skills. To be able to add merit badges, to learn constantly, and to hustle. To say, ‘I don’t know how to do something’ is not an excuse in 2017. Look at all the videos on YouTube. You can learn anything on YouTube.”
—“When you’re an angel investor, I think you develop this ability to detect bullshit…”
—“Startups are like awkward teen-agers. Investors don’t expect perfection… But lying or misconstruing the facts is really dangerous.”
