Chris Sacca of Lowercase Capital - TWiST #291

TL;DR

Chris Sacca went from being in debt to becoming a successful investor, starting with his investment in Twitter. He emphasizes the importance of being helpful and building strong relationships in the startup world.

Transcript

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Key Insights

• 😇 Sacca's success as an angel investor can be attributed to his ability to add value and build strong relationships with founders.
• 😇 Managing one's own psychology is crucial in entrepreneurship and angel investing, as it involves taking risks, dealing with uncertainty, and building relationships.
• 🤵 There is still room for improvement in the venture capital industry, particularly in terms of aligning interests between investors and founders.

Questions & Answers

Q: How did Chris Sacca start his journey as an angel investor?

Sacca started his journey by rebranding himself and offering consulting services to startups. He leveraged his expertise and network to add value to these companies, which eventually led to angel investments.

Q: How did Sacca become involved with Twitter and Uber?

Sacca initially invested in Twitter because of his belief in the potential of the company and his relationship with Evan Williams. He also invested in Uber after being impressed by the vision and drive of the founders, Garrett Camp and Travis Kalanick.

Q: How does Sacca view the current state of venture capital?

Sacca believes that although venture capital has improved in certain aspects, there is still room for growth. He acknowledges the divergence of interests between angel investors and venture capitalists and the challenges that come with it.

Q: How does Sacca approach investing and building relationships in the startup world?

Sacca emphasizes the importance of being helpful to founders and building strong relationships. He believes that reputation and trust are crucial in the startup ecosystem.

Summary

In this episode, Jason Calacanis sits down with Chris Sacca, an investor and entrepreneur. They discuss the qualities and characteristics of successful founders, the challenges of the startup ecosystem, and Sacca's personal journey through financial struggles. Sacca also shares his experiences investing in companies like Instagram, Twitter, and Uber.

Questions & Answers

Q: How did Chris Sacca become an investor in Twitter?

Sacca explains that he became an investor in Twitter because he was a product user and had a personal connection with Evan Williams, one of the founders. Williams called Sacca and offered him a chance to invest, and Sacca agreed. However, at the time, Sacca didn't have the funds to invest but still considered it a great opportunity.

Q: What qualities does Sacca look for in a founder?

Sacca believes that successful founders have a different gene that sets them apart from others. They have a disregard for failure and don't see it as a possibility. They have a relentless pursuit of their vision and are incredibly fearless, scaling and acting at an unreasonably fast pace. Sacca mentions examples of successful founders, such as Evan Williams and Kevin Systrom, who possess these qualities.

Q: How did Sacca work his way out of debt after losing millions of dollars?

Sacca explains that he sought employment and got a job as a lawyer at Fenwick and West. He also attended networking events in Silicon Valley and rebranded himself as a business consultant, creating the Salinger Group. He hustled, handed out business cards, and built a network of clients who hired him as a consultant and offered him equity in their companies. Sacca shows the impact of branding and presenting himself in a new light to turn his financial situation around.

Q: How did Sacca become an investor in Instagram?

Sacca met Kevin Systrom, the founder of Instagram, and was immediately impressed by his vision and confidence in the company's potential. Despite doubts about the photo space being oversaturated, Sacca couldn't resist getting involved. He saw Systrom's determination and certainty and believed in the billion-dollar potential of the company.

Q: What challenges does the current startup ecosystem face?

Sacca discusses several challenges in today's startup ecosystem. He believes that too many mediocre founders are now calling themselves entrepreneurs, and this dilutes the talent and quality in the industry. There is also a surplus of funding available, leading to the funding of many subpar companies. Sacca emphasizes the importance of finding truly disruptive founders who have the right mindset and skills to build successful companies.

Q: How has Sacca changed his approach as an investor over time?

Sacca explains that earlier in his career, he focused on building a personal brand and being out in the public eye. However, he realized that this approach wasn't actually serving his companies or investors. He shifted his focus to building strong relationships with other investors and entrepreneurs, as well as being genuinely helpful. Sacca believes that being helpful and adding value to a company goes much further than just being in the press.

Q: How did Sacca become an investor in Uber?

Sacca was introduced to Travis Kalanick, the founder of Uber, and was immediately struck by his speed and relentlessness. Kalanick presented him with an expansion plan that made Sacca nervous but also excited about the potential scale of the company. Sacca believed in Kalanick's ability to execute on his vision, and that ultimately led to his investment in Uber.

Q: How did Sacca navigate the challenges of being an investor during the dot-com bubble?

Sacca explains that he made a significant amount of money during the dot-com bubble but lost it all due to a trading problem. He was left with millions of dollars in debt but didn't want to declare bankruptcy. He worked his way out by finding employment, attending networking events, and rebranding himself as a business consultant. Sacca hustled and built a reputation, which eventually led to clients hiring him and paying off his debt.

Q: How did Sacca become an investor in other successful companies?

Sacca became an investor in various companies by creating connections and relationships. He attended events, shared his business card, and presented himself as someone who could add value to companies. Sacca's reputation as a helpful and knowledgeable investor allowed him to invest in companies like Instagram, Twitter, and others.

Q: How does Sacca differentiate successful founders from others?

Sacca believes that successful founders possess a different gene that enables them to have a disregard for failure and a fearlessness to tackle challenges. They have a relentless pursuit of their vision and can see the bigger potential in their ideas. Successful founders also surround themselves with the right people to execute their plans. Sacca mentions examples like Evan Williams, Kevin Systrom, and Travis Kalanick as founders who have these qualities.

Q: What is Sacca's perspective on the abundance of funding in the startup ecosystem?

Sacca acknowledges that there is currently an excess of funding available, which leads to mediocre companies and founders getting funded. He believes that this skews the distribution of talent in the startup landscape. Sacca emphasizes the need for a quality filter and finding the truly disruptive founders who can create innovative and impactful companies.

Takeaways

In this episode, Sacca provides valuable insights into the qualities and characteristics of successful founders. He highlights the importance of a fearless and relentless mindset, as well as the ability to see the bigger potential in their ideas. Sacca also discusses the challenges of the startup ecosystem, such as funding excess and the dilution of talent. Overall, the key takeaway is the importance of building strong relationships and adding value to companies as an investor.

Summary & Key Takeaways

• Chris Sacca started as an attorney but lost a lot of money in the stock market. He then rebranded himself and started working as a consultant, which eventually led to becoming an angel investor.

• He invested in companies like Twitter and Uber, leveraging his expertise and network to add value to these startups.

• Sacca believes that managing one's own psychology is crucial in entrepreneurship and angel investing, as it involves taking risks, dealing with uncertainty, and building relationships.