One of the world’s most prominent angel investors
You don’t have to rub shoulders with the leading tech entrepreneurs of our time to have Instagram and Twitter handles as snappy as @jason, but it likely wouldn’t hurt the cause.
The man behind the tweets is Jason Calacanis, a serial entrepreneur and angel investor who made a name for himself when he struck Silicon Valley gold–or unicorn glitter, rather–for being one of the first people to invest in Uber.
He’s invested in over 150 companies throughout his angel investment career, of which Thumbtack, Desktop Metal, and Robinhood also went on to claim unicorn fame–and that’s excluding the many that are on the cusp of billion-dollar valuations.
Calacanis has had a few successful exits himself, notably with tech magazine Silicon Alley Reporter and Weblogs, Inc., which was bought by America Online, Inc. for US$25 million in 2005.
While most people in his position would be slowing down, Calacanis seems to have opted instead to do it all, recently authoring the bestseller Angel: How to Invest in Technology Startups and launching his own syndicate. What unites his many projects is his intent to bring more talent and capital into tech as a way to encourage innovation.
Being the straight-talker he is, Calacanis was as vocal about his love for Peking duck as he was about his investment thesis. Jumpstart had the opportunity to speak to him before his fireside chat at the WHub Startup Impact Summit, which took place in Hong Kong on the last day of the 2019 StartupmeupHK Festival on January 25.
You’ve talked about how beginning your career as a journalist helped you to succeed as an angel investor. Can you tell us more?
When you’re a journalist, you ask a lot of questions and try to figure out what the truth is. When you’re an investor, you also ask a lot of questions to try to figure out the truth. It’s the same job; one, you get the glory of being on the masthead, and the other, you get the glory of having a large bank balance.
One of your objectives for Founder University [founder.university] is moving racial minorities, women, and other under-represented groups upstream. Are you sensing a shift in tech when it comes to embracing these groups?
Diversity in tech was anemic ten years ago. When I started angel investing, we would obviously see a lot of white guys. Then we started to see an overrepresentation of East Asians and Indians in terms of the percentage relative to the population. Still, Latin Americans, African Americans, women, and other groups were underrepresented.
What’s interesting is that in the last four or five years, we’ve seen a massive change in the number of women founders, but a modest change in the number of Latin and African American founders. In the venture capital world, it’s still changing very slowly, but it’s changing.
I like to focus on solving problems rather than placing blame. Arguing with people rarely results in change. If these founders are underrepresented or under-appreciated or undervalued, we should just create opportunities for them, which is why we started Founder University. It’s a free course. We do two a year for female founders and two for underrepresented founders.
Do you think you have to compromise certain things about yourself to make it in Silicon Valley, or is it more about changing the game?
One of the things about Silicon Valley is if you have high performance, you will rise. But it will be harder for certain people. I didn’t go to MIT. I didn’t go to Stanford. I had a knowledge of technology, but I wasn’t a developer, so it was a little harder for me. Then there’s a whole group of people who it’s even harder for.
Everybody has some degree of difficulty becoming successful in life, but I don’t think you have to check your morals at the door. In fact, I’ve become more outspoken. I’m known for being outspoken. I’ve criticized Facebook for a decade, and it hasn’t affected my business. I like a good fight. Sometimes that wins me a lot of fans, and sometimes I lose fans, but I’m always candid and honest.
I try to be helpful to the founders I invest in and the ones I don’t invest in. That’s why we do all these free conferences, free education, the podcast, the books–all that’s designed to help people rise up. I want to see people go from being poor to middle class, middle class to being upper middle class, upper middle class to being rich, rich to being ultra wealthy. I like to see that change. I like capitalism.
We’re seeing more firms raise megafunds to face off with the Vision Fund. Do you think growth-stage funds will change things for investors like yourself?
What these growth stage funds do is they’ve kind of inserted themselves where initial public offerings (IPO) used to happen. Companies used to IPO when they were a five, ten billion dollar company. Now, these funds come in and give the company a billion or ten billion dollars like Masayoshi Son. It keeps the company private a bit longer, so they can quietly grow their market share and expand around the globe.
If anybody loses out, it’s the public markets. Investors don’t get the appreciation they used to–that’s why we’re seeing more people trying to dip down and invest in these private companies. But more capital is a good thing.
Once in a while, you’ll see somebody do something stupid with the capital or lose money on every transaction, which they try to make up with volume. That’s never a good idea.
What do you make of the brewing competition between Silicon Valley and China? What will determine the winner?
I don’t think there’s much of a competition. American companies have taken the globe, and Chinese companies haven’t left China. Until a Chinese company is used by 100 million Americans every day, you lost. Sorry, China. I think American companies have more ambition and have better founders. China is a much bigger market, so those companies are naturally going to be bigger.
In terms of AI, it’s going to be a race, but I think capitalism still wins. Until China has a more capitalistic society that has more democracy, it’s going to be very hard. We’ve made a mistake in America by not letting more people into the country with this Donald Trump experiment we’re currently doing. But that’s going to end very soon, and we’ll go back to some level of normalcy.
Are you bracing for what’s to come with regards to the uncertain global economic and political climate?
You know, I’ve been through three major crashes in my life: the stock market crash in the 80s, the dot-com bust, and the financial crisis. When the market goes down, it’s a great time to invest in companies. You just need to understand what market you’re in.
We’re in a hot market right now; it’s a bit frothy. It’s not a bubble exactly, so you should be selling shares right now. You should be investing in companies, but doing it wisely. I invested in Uber in a down market, and people invested in Google, YouTube, and Facebook in a down market. I always say: fortunes are built in a down market and collected in an upmarket.
What has been an especially memorable experience touring your book and what other projects are you working on?
Japan was amazing. I love the people of Japan and Tokyo as a city. I am over the moon and pinching myself that the book’s been translated into Japanese and Chinese, and maybe another six languages.
I’m trying to inspire 10,000 rich people to invest in startups, maybe $500,000 each. These are people who can afford to lose it. If I do that, we could be talking about billions of dollars being invested. That’s my goal. I want to see rich people take this money that’s just in bonds and treasuries, and putting it in innovation.
We have a website called [jasonssyndicate.com] that we’re about to launch. You can sign up now. We have 2,900 members; we had 1,200 members in our AngelList syndicate before we left to start our own. We’re already the largest syndicate in the world, but we’re hoping to go from 2,900 to 10,000.
Min is Jumpstart’s Editor in Chief.