I just finished reading and listening to Angel: How to Invest in Technology Startups, a book by Jason Calacanis. I first mentioned Jason on this blog back in 2009, when I wrote "starting is easy; finishing is hard." Fast forward 8 years.
First, let me say, this is a great book. I'm now going back, highlighting sections, and ready to put what I have read to work. I also recommend downloading the Audible version. It's read by Jason and has some extras at the end (not in the physical book).
So many other books are all hype, promising everyone that they can do anything. They promise you fame and fortune, resulting in readers changing their profiles to read "Hustler, Grinder, and Lifestyle Coach". I love that Jason didn't say everyone can be an angel investor.
Actually, he did but there were some clear caveats. If you want to be an effective angel investor, you'll need a combination of things and Jason details what they are (see chapter 4).
Though you might not meet all of Jason's criteria to be an effective angel investor, I still think you should read (and listen to) this book if you're a founder or thinking of getting into angel investing.
- Jason was specific about what you need to do, to be an effective angel investor. Right away, you'll realize if you can or can not do this. Sorry to all of those precious snowflakes out there who think they can do anything. If you don't have the money or stomach for high risk, you can't do this.
- At $1000-$2500 for each of your first 10 investments, if you don't have the money, you can't afford to be an angel investor.
- If you can't deploy even greater amounts of money, in the event one of your startups gets a Series A from a known venture capital firm, you'll get diluted. (do a search on Pro Rata)
- If you're unwilling to move to Silicon Valley, your deal flow may be limited. (I like my home in Maryland)
- You have less than a 1% chance of being successful. (The truth hurts)
I just exchanged Twitter DM's with Jason. He wanted to note that he did talk about being an angel with no money (advisor shares!). I want to make sure I properly represent the book so I'm adding this blog post edit. Also, I plan to write other blog posts about the book.
- Jason was specific about what you need to do, to be an effective angel investor. Right away, you'll realize if you can or can not do this. Note I'm listing this as both a Pro and a Con.
- He describes probably the safest path you can take if you're going to get into angel investing. Granted, you still have less than a 1% chance of being successful.
- Jason speaks and writes from the heart. He sounds like a kid from Brooklyn. He actually reads the Audible version of his book. I've been listening to him since the beginning of his This Week in Startups (TWIST) podcast. It was good to hear his voice and not some voice actor.
- He has an impressive track record in angel investing so he's not like these knuckleheads you see out there trying to be "lifestyle advisors".
- "You only have to be right once" ~Mark Cuban
Now, it's time to put in the work.
Disclaimer: I was in no way compensated for the writing of this review.