Here are the upcoming dates for our Angel University courses:
April 23: Boston, MA
April 24: New York City (supported by EquityZen)
April 26: Columbus, OH (hosted by WillowWorks)
April 29: Miami, FL
June 17: Sydney, Australia
July 15: San Francisco
The Angel University curriculum is designed for everyone, from angels who haven’t done a deal yet to seasoned angels who have done over 100. We cover five key topics: sourcing deals, evaluating startups, negotiating deals, portfolio and bankroll management, and post-deal efforts. It’s a ton of fun.
I didn’t put any thought into the order of the list, since I wrote it in a stream of consciousness style, but I made sure to include factors that people don’t have any control over, such as, what time and the country they were born in because, obviously, if you were born in North Korea today or were Irish (like my ancestors) at the turn of the 19th century, you probably had zero to little chance of changing your station in life.
Right now I’m very interested in bringing up the topic of wealth, success and achievement in America because a vocal minority of youngsters (I’m old now!)
There is a lot of misconception around the moniker “lifestyle business,” with many founders thinking it’s an insult, which is understandable since said moniker usually comes from an investor with a pile of money and who is giving a “hard no” to a founder who just spent the time to pitch them — in rejection, comes reaction.
When people in Silicon Valley call a startup a lifestyle business, they are actually implying that it’s a GREAT lifestyle for the founders, perhaps with a certainty of pulling out a million or two in profits a year, as opposed to the 5-10% chance of waiting a decade to have a greater return.
VCs tend to be impressed with these lifestyle businesses and their advice is given because it’s in everyone’s best interest — it’s certainly not to diminish founders.
All day long I ask people what they want to happen in the future and what their plan is to make that vision materialize, and the bold and true of heart answer these questions without pause. They have studied their market, talking to customers and doing competitive intelligence on incumbents. They have timelines they’ve built, tests they want to run and a plan B and C in case they run out, or get offered a bucketload, of money.
This is one of the hardest questions for me to answer because conflicts are so situational, often personal and if they are hard to resolve they are often complex with multiple resolution paths.
Before we talk about the conflict at hand, we need to look at the founders themselves and ask, are these emotionally mature founders who are self-aware? Most of the founders I work with are highly-driven, highly-skilled, persuasive and passionate individuals, but often they are young and emotionally inexperienced. Sometimes they are older but not very self-aware.
If you can’t find a co-founder for your startup, you’ve disqualified yourself as a fundable entrepreneur, because who in their right mind would back someone who can’t convince just once talented person to join them on a crazy journey?
Finding a co-founder isn’t easy, but it’s not the hardest thing you’ll do as a founder, and recruiting for your startup is going to be a lifelong practice.
It. Never. Ends.
I’m 30 years into my career in technology and I’m still spending a significant portion of my time building my teams.
Rich people are sitting on large hoards of zombie capital, be it bonds, index funds or cash, that sit passively in the cloud, allowing the rich to stay rich, beating inflation and sometimes a bit better.
Sure, some of these bonds and index funds are backing interesting projects, but the truth is, this capital doesn’t change the world in the way startups do. I’m trying to inspire 10,000 rich people to become half- to full-time angel investors, moving a small percentage of their zombie capital, on an individual basis, into startups.
Yesterday I had Anthony Pompliano on my podcast to discuss crypto. He runs a crypto fund, and we’ve had a great time debating ICO scams, Bitcoin Zero and token-based equity on Twitter for the past couple of months.
He was a fantastic guest, and despite our Twitter debates, it turns out that we agree on about 90% of what’s happening in crypto right now.
The big question I tried to figure out on the podcast, and that I’ve been trying to figure out personally as an investor is, will a killer use case and $100b startup come out of the crypto and ICO crater of 2018 — which saw most ICOs and imaginary digital currencies lose 90-99% of their value.
Last night I watched the schadenfreudeful documentary FYRE on Netflix, which chronicles a sociopathic grifter named Billy McFarland and his greedy celebrity partner Ja Rule, as they bilk investors and music-festival-going Instagrammers out of their money.
The movie is a commentary on the power of social media models like Kylie Jenner, combined with a criminal disguising himself as a visionary founder.
FYRE has flashes of the familiar startup and entrepreneurial struggle, with insane deadlines and a cash crunch being resolved with a combination of brilliant, world-class marketing and bold fundraising driven by RFID bracelets being loaded with cash and angel investors pouring money into an event that the founder knows is a multilayered fraud.
I spent 10 years living in Los Angeles, traveling up to the Bay Area every other week, sometimes weekly, to do angel investing.
During that time I learned that SFO is a complete disaster, with Karl the Fog creating all kinds of trouble. Also, I was frequently missing flights with insanely unpredictable traffic patterns in L.A. and the Bay.
When I made a little cheddar, I started treating myself to the fully refundable Southwest Premier tickets, you know the ones, that let you board first and take the aisle seat in row two. The coveted seat that lets you put your bag under the seat in front of you which in turn lets you bolt past the row one customers who are fumbling for their overhead luggage.
The basic premise: share revenue with publishers, Instagrammers/influencers, App developers and anyone else creating content on the platform, just like YouTube, Airbnb, Apple and Google’s App Stores and countless other partnership platforms do.
Right on cue, Facebook does the most misguided, heavy-handed and unsustainable version of sharing the wealth, by sharing $100m a year — .3% of their yearly revenue — in a series of grants.
The cynical take is that these kinds of one-time payoffs, to highly influential media organizations, are designed to silence and tamper criticism — they’re buying off influential people for a pittance.
The most gracious take is that Facebook feels bad for being such a horrible partner to the press and democracy.
Facebook’s self-inflicted wounds come from their founder’s obsession with growth, which at its core was based on three extraordinary tactics: removing friction, staying focused on global growth and stealing other people’s ideas.
If Zuckerberg had not set the tone of “move fast and break things,” the company would have been more thoughtful about their growth, and if they didn’t steal other people innovations so systematically — from Friendster to FriendFeed to Twitter to Snapchat — they would never have dominated the planet.
Of course, that obsession with speed and copying has resulted in — as Zuck himself instructed — the breaking of things, including our privacy and our democracy.
Here is how carry works, briefly: if the Fund invests $2m on behalf of investors and turns it into $22M (11x, cash on cash) the gain would be $20M. The carry would be 20-30% of that gain, depending on the deal with LPs (limited partners), which means $4-6M in gain.
The number one job of a venture capitalist is to stay a venture capitalist.
This might sound cynical but, as a VC, if you don’t return enough money to your LPs (limited partners, a VC’s investors) you will not be able to raise your next fund. If you don’t raise your next fund, you’re not collecting management fees to pay yourself and your team, and you don’t have a chip stack to play in “the big game.”
Once again, the press is here to remind poor, unsuspecting founders that venture capital can — GASP! — result in your startup trying to grow too fast. From today’s New York Times comes the link-baiting title: “More Start-Ups Have an Unfamiliar Message for Venture Capitalists: Get Lost:”
The V.C. business model, on which much of the modern tech industry was built, is simple: Start-ups raise piles of money from investors, and then use the cash to grow aggressively — faster than the competition, faster than regulators, faster than most normal businesses would consider sane. Larger and larger rounds of funding follow. The end goal is to sell or go public, producing astonishing returns for early investors. The setup has spawned household names like Facebook, Google and Uber, as well as hundreds of other so-called unicorn companies valued at more than $1 billion.
Today I’m recommending another person I think fits my three criteria, which are, as a refresher:
They’re successful in their field, but not the most successful
The have strong opinions and like to mix it up, but they know how to listen
They don’t care what people think of them, but they want people to tune in
Preet Bharara was the former Attorney General for the Southern District of New York, was fired by Trump and is part of the composite that Brian Koppelman used for the brilliant and sharp-elbowed AG played by Paul Giamatti in the extraordinary “Billions”.