E749: James Altucher & Jason talk “Angel”: investor & founder guidebook to new wealth creation

TL;DR

Jason Calacanis says angel investing starts with recognizing talented people and separating personal opinions about a product from its potential to succeed. After passing on Zynga, Tesla, and Twitter, decisions he describes as mistakes worth $25 million and $50 million, he changed his approach and asked to invest when Travis Kalanick showed him UberCab. Read on for the specific experiences and founder qualities behind that shift.

Transcript

this weekend startups is brought to you by Squarespace start building your website today at squarespace.com enter offer coat twist at checkout to get 10% off your first purchase and shipstation.com try ship station free for 30 days and get an additional month free using promo code twist today's episode was film live at the Squarespace NYC headquart... Read More

Key Insights

• 😇 Building a strong network is crucial for success in angel investing and technology startups.
• ❓ The author's personal journey highlights the importance of separating personal beliefs from the potential success of a startup.
• 🛩️ Aspiring angel investors can start small by investing small amounts in a diverse portfolio to gain experience and learn from successes and failures.
• 😇 Networking is an essential component of angel investing, and providing value to others without expecting immediate returns can lead to long-term success.

Questions & Answers

Q: What is Jason Calacanis’s book Angel about?

Angel is presented as a guide to investing in technology startups. Its subtitle describes it as timeless advice from an angel investor who turned $100,000 into $100 million.

Q: Why did Jason Calacanis change his mind about investing in startups?

He had initially believed that he should invest only in himself, but successful friends repeatedly asked him for advice about their companies. After seeing the value of opportunities he had rejected, he changed his approach to backing talented people in his network.

Q: Why did Jason Calacanis decline to invest in Zynga?

He believed poker played with virtual chips lacked the risk that makes betting meaningful. He told Mark the idea would fail, then later described that decision as a $25 million mistake.

Q: Why did Jason Calacanis miss the opportunity to invest in Twitter?

After Evan Williams demonstrated Twitter through text messages to 40404, Calacanis thought the service reduced blogging to sentence fragments and could become a cacophony of people unable to write paragraphs. He later called passing on it a $50 million mistake.

Q: What opportunity did Jason Calacanis miss with Elon Musk’s car company?

Elon Musk spoke with Calacanis when the car company was close to running out of money and trading at about one dollar per share. Calacanis offered advice but did not consider angel investing in it at the time.

Q: What lesson did Jason Calacanis learn from missing major startup investments?

He learned to separate his personal opinion about a product from his ability to identify smart, capable people. That shift let him focus more on the founders he knew and trusted than on whether he personally liked each idea.

Q: How did Jason Calacanis respond when Travis Kalanick showed him UberCab?

When Travis Kalanick offered to show him UberCab, Calacanis immediately asked whether he could invest. He agreed to see the product, but his first reaction reflected how much his investment thinking had changed.

Q: How did Jason Calacanis’s journalism background help his investing approach?

Through the Silicon Alley Reporter, he covered technology companies and knew many people in the New York startup community. He later connected that journalistic network-building experience with his ability to recognize smart people doing strong work.

Summary & Key Takeaways

• The book discusses the author's personal journey from journalist to angel investor, offering timeless advice and insights.

• It emphasizes the importance of building a strong network and networking techniques for both investors and founders.

• The author shares stories of missed investment opportunities, highlighting the need to separate personal beliefs from the potential success of a startup.