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  • Jason Calacanis 22:07:50 on 2020-07-09 Permalink
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    Microschools are the future–how do we start one? 


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    vacant white painted classroom with chairs, tables , and map on the wall

    It’s becoming very clear to me that school isn’t going to be the starting, or be the same, this September, as many of us hoped it would.

    As nimble as educators were to move to remote education, something is lost when we put our kids in front of a webcam as opposed to a group of their peers.

    Given this, our family has decided to start a microschool in the Bay Area starting this fall. We expect somewhere between one to five students, and we are starting the search for an teacher who wants to be apart of the microschool revolution/evolution.

    If you’re teachers with five years of experience or more and you want to come on this adventure, we set up a quick application form.

    The post Microschools are the future–how do we start one? appeared first on Jason Calacanis.

     
  • Jason Calacanis 22:07:50 on 2020-07-09 Permalink
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    Microschools are the future–how do we start one? 


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    vacant white painted classroom with chairs, tables , and map on the wall

    It’s becoming very clear to me that school isn’t going to be the starting, or be the same, this September, as many of us hoped it would.

    As nimble as educators were to move to remote education, something is lost when we put our kids in front of a webcam as opposed to a group of their peers.

    Given this, our family has decided to start a microschool in the Bay Area starting this fall. We expect somewhere between one to five students, and we are starting the search for an teacher who wants to be apart of the microschool revolution/evolution.

    If you’re teachers with five years of experience or more and you want to come on this adventure, we set up a quick application form.

    The post Microschools are the future–how do we start one? appeared first on Jason Calacanis.

     
  • Jason Calacanis 17:06:42 on 2020-03-27 Permalink
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    Now is the best time to be an angel investor (let me show you how) 


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    I’ve been getting a lot of questions about the impact the coronavirus will have on startups and angel investors, so I thought I would tackle the issue head-on in this essay. 

    [ Click to Tweet (can edit before sending): https://ctt.ac/NBz9K ]

    Giant disclaimer up top that (obviously) everyone’s safety and well-being is the most important thing right now. Full stop. However, everyone knows that the second and third-order effects of this pandemic will be the economy.

    The economy means people’s jobs, and people’s jobs are how they provide food, shelter, medicine, education, and safety for their families. 

    We lose jobs and some people will lose their safety, be it in the form of housing, food or medicine — let alone the mental health crisis that can come from being unable to provide for yourself and family.

    With that disclaimer out of the way, I want to talk about investing in startups, which is what drives the economy through job creation. I’m sure some snowflakes out there will try and cancel me for talking about investing in startups right now, but those same snowflakes will attempt to cancel me on their iPhone while on Twitter and getting their food delivered from DoorDash (aka startups backed by angel investors).  

    In this quick essay, I want to explain why I believe that NOW is the best time to start angel investing. I encourage you to do so intelligently, slowly and with a strategy, which I will also talk about here. 

    Background: The most important thing I’ve learned about investing in startups over the past decade is that your results will vary radically depending on when you started investing. I was very lucky to have started angel investing in 2008 during the Great Recession as a Scout for Sequoia Capital. 

    At that time the valuations for startups like Uber and Thumbtack were $10m — combined! 

    For the past couple of years, startups run by founders who aren’t qualified enough to make a cup of coffee for Travis and Marco were demanding $15m valuations for copycat ideas with anemic performance. 

    A hot market filled with easy money makes everyone think they should start a company — which is completely reasonable. 

    I believe that we’re headed back to 2008-2010 valuations this year and it’s going to be fantastic for angel investors who are brave enough to place bets. 

    Nothing is guaranteed, and you can insert a bunch of financial disclaimers here, but candidly I’m planning on being more active in the next 12 months than I have been in my 10-year history as an angel investor. 

    If you’re rich and bored, or maybe even retired and regretting it, I would like to make the case for you to become a half-time or full-time angel investor. 

    Now, I don’t think you should invest 100% of your capital in startups this year.

    However, I think rich people (aka accredited investors who have capital available) who become full-time angel investors this year should build an intelligent plan to deploy a fraction (1-10%) of their net worth. 

    Essentially, the amount they can afford to lose. 

    In my book ANGEL I explain a way to do this intelligently that goes like this: 

    1. You want to make 30+ investments so you have a chance at an outlier. 
    2. You want to only invest in startups that have products in market and revenue already — and there are thousands of them. 
    3. You want to make very small bets when you start and then go 2-10x on the winners. 
    4. You want to make those 30+ investments over a three-year period. 

    Here’s some basic math on the plan I recommend.

    1. You have a net worth of $10m. 
    2. You allocate $450,000 for angel investing. 
    3. You invest $10,000 into each of the 30 startups ($300,000). 
    4. You invest the final $150,000 into your top five startups ($30,000 each).

    In this model, $200,000 of your $450,000 invested will go into the top five startups. 

    You can assume in this hypothetical model that you will get $0 from the 25 you didn’t follow on with, and then if one of the other five pays off 25x on the initial investment ($10,000 * 25x = $250,000) and 10x on the second investment ($30,000 * 10 = $300,000) you are in the black already. 

    This is not guaranteed, obviously, but if you talk to folks in Silicon Valley with over 30 angel investments you hear stories of outlier investments and power laws often.

    In this example, if you lose it all, you lost 4.5% of your net worth, which is not fun but is survivable (heck, if you’re in the markets right now you’ve probably experienced “losing” 20% of your net worth in a week or two). 

    You can strategize various scenarios for angel investing based on your time frame, goals, chip stack, age, dedication level and risk profile.  We discuss all of this in the Angel.University course. 

    Just two examples from our investments:

    1. Calm is valued at 153x for us.
    2. Uber, an outlier of all outliers, is 2,000 to 4,000x+ (depending on when/if you sold).

    If you want to learn how to become an angel investor, come to a virtual edition of Angel.University which we will host on April 7th. 

    We have 100 slots for accredited investors, apply here: http://angel.university 

    We are asking for a suggested donation of $100 per person for Angel.University: 100% of which will be donated to coronavirus-related causes like https://feedingamerica.org and https://covid19responsefund.org 

    In short, based on my experience, the next six to 12 months could be the best time to start angel investing since the Great Recession. 

    I could be wrong, this crisis could last a couple of years or as short as three months, but I know that angel investing is an amazing vocation if you’re passionate about entrepreneurship, technology, and innovation. 

    Early-stage startups will be on sale as capital markets constrict and funding sources slow their pace of investing and lower their slug sizes.

    Fortunes are made in the down market and collected in the upmarket. Let’s get to work. 

    All the best, Jason

    The post Now is the best time to be an angel investor (let me show you how) appeared first on Jason Calacanis.

     
  • Jason Calacanis 00:23:21 on 2019-10-21 Permalink
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    How to Say “No”: Five Templates to Turn Down Opportunities Gracefully 


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    Kevin Rose and Tim Ferris did an episode of The Random Show [https://overcast.fm/+RxHE2lD-I] where Tim Ferris confessed that he had cancelled his next book and refunded the advance. The book he said “no” to was about “how to say no,” which is ironic and something that any super router like Tim or Kevin has to deal with at an acute level.

    [ Click to Tweet (can edit before sending): https://ctt.ac/7dEea ]

    For kind folks who get famous, saying no is a non-stop burden, but saying no isn’t just critical for the mental health of famous authors or podcasters, it’s something that founders have to be ruthless about because the startups that succeed are, universally, the ones that scale a single product and business model (Google:Search, Uber:Rides, Facebook:Social Network, etc.) — at least in their first five to ten years. 

    As an investor in over 200 startups, I’m constantly having founders text me their new, crazy ideas — after having just invested in their last one. Sometimes it’s great to pivot, hard or softly, into a new product, but saying no to distractions and new ideas is often how you have a big breakout success.

    Here are the templates I use. Feel free to share and remix them. 

    The “Not Right Now” List

    In your own company, people will come to you with a ton of ideas, strategies and tactics, which are three very distinct things. Once in a while some folks will even want to change or edit your mission (the highest level structure in your startup). 

    When they do, a great response is the sh@#$t sandwich structure: “Great idea. Let’s put it on the ‘not right now’ list so we don’t forget it — since it’s so good!”

    Bread: “great idea” and “so we don’t forget it — since it’s so good”

    Sh@#4t: Obviously, we’re not doing this right now. We need to stay focused. 

    Defining Your Zone

    People will want to engage you and your business to solve their problems. This is only natural, so it’s important to frame for people what you do and don’t do. In my life as a publisher I would tell folks who “wanted to get lunch” or “discuss how we might collaborate” with a simple email template:

    “Bob,

    Thanks for reaching out, really appreciate you thinking of us! There are three ways to get involved in Silicon Alley Reporter magazine:

    1. Subscribe here: URL
    2. Advertise in the publication: meet Jane, cced, who runs advertising.
    3. Be featured: We don’t take pitches from PR folks, but send updates on your business to the tip line here.

    Don’t have time for lunch right now as I’m on deadline for the next issue, but happy to answer any other questions you might have over email. 

    Best,
    Jason 
    Editor & CEO, Silicon Alley Reporter” 

    For my role as an investor, I have a similar email.

    “Jane,

    Thanks for reaching out! Please meet Jacqui Deegan, cced, the Managing Director of the LAUNCH Accelerator (launchaccelerator.co), which is where we engage with founders at the early stage.

    Frequently asked questions here: https://launchaccelerator.co/faq

    If you could send us your deck, traction (revenue by month since inception in a chart or table) as well as your funding history, that would be very helpful.

    Best,
    Jason” 

    Some folks will of course say, “I’m not interested in coming to your accelerator, but would you have lunch with me and give me $1m in seed funding for my idea?” or “We are past the accelerator stage and have $10,000 a month in revenue.” 

    To which I will explain: 

    “Jane,

    You’re a bit too early for us, but do keep us up to date by sending your monthly updates to investors to updates@launch.co

    Our syndicate (http://thesyndicate.com) reviews seed-stage/Series A/Series B companies with $50,000+ a month in revenue, doubling every six months or less. Ashley is the MD of the Syndicate and can answer any questions.

    Best,
    Jason” 

    Now, we will obviously invest in some startups that are pre-launch (i.e., Superhuman) or have very modest traction (Calm.com had $10,000 in total revenue when we invested, I think), but having some basic sorting guidelines frees us from wasting the founder’s time. We will review their product and deck before responding so if something looks wildly interesting we’ll take a deeper dive, but when things aren’t a fit for us, we will still make it really simple for incoming founders to engage with us.

    Blank “On Deadline” Reply

    We’re all working against some deadline, so being able to have a standard “on deadline” response is important for requests. I’ve used one that encourages any follow-up questions over email, and another one that puts a hard no on it.

    “Thanks for reaching out. I’m on deadline for my next book and don’t have time to meet, but I’m happy to try and answer any questions you have over email. 

    Best,
    Jason”

    And… 

    “Thanks for reaching out. I’m on deadline for my next book until April 15th 2020, and I won’t have time to meet or review this opportunity. Thanks for thinking of me. 

    Best,
    Jason“

    The “I Don’t Do” BLANK 

    Knowing what you don’t do is critical. I often, for example, get asked to fund movies, restaurants, albums and non-profits. I have a simple response for that, too: 

    “Thanks so much. While I do enjoy films/restaurants/music immensely — I do not invest in them! 

    Best,
    Jason”

    Use Superhuman Snippets 

    I do all of this with Superhuman Snippets, which lets me reply and cc folks automatically when using these templates. Superhuman doesn’t let me share the templates with team members or label the emails yet, but those two features will be killer when they do arrive. 

    Giving a quick “no” is compassionate to other folks because it lets them move on quickly. Also, taking the time to build your own “I don’t do… BLANK“ list is critical if you want to achieve greatness — which is often defined equally by what you don’t do as what you love doing.

    Once again, listen to the podcast with Tim and Kevin here: https://overcast.fm/+RxHE2lD-I

    The post How to Say “No”: Five Templates to Turn Down Opportunities Gracefully appeared first on Jason Calacanis.

     
  • Jason Calacanis 03:42:06 on 2019-09-09 Permalink
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    The Pegasus Startup: Flying Over VCs on the Wings of Profits 


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    The unicorn movement in Silicon Valley has been a great run, with startups plowing mountains of willing capital into audacious products that are changing the world.

    [ Click to Tweet (can edit before sending): https://ctt.ac/eWeJG ]

    Airbnb, Uber and Slack have revolutionized travel, transportation and work forever. It took tens of billions of capital, but I predict each of these companies will become worth 10x their current market caps in the next decade or two.

    However, a new species has taken flight in Silicon Valley, and we’ve been lucky enough to have invested in four of the six we’ve encountered. This new species is called a Pegasus.

    A Pegasus startup is one that is so profitable that it is able to use its profits to soar so high, that it skips multiple rounds of funding.

    Unicorns are Still Fine

    Now don’t get me wrong, unicorns are just fine. Any company that can hit $100m in revenue and a billion dollar valuation is a great bet for early investors and employees.

    If the dead money in bonds and bank accounts want to get to work making huge bets, I’m all for it. Folks betting $5-$10b to get a startup to 100 million addicted paying customers are making a wise bet.

    It’s a fine use of capital if those 100 million users return $5 a month in profits for years to come (see Facebook, Google, Amazon, etc), and if they inspire hundreds of millions of more users to try the product.

    I get that deploying billions of dollars makes most civilians confused, and it sure terrifies the old guard and public markets at times, but anyone familiar with high-stakes poker and investing with a decade-long time horizon — like I and other startup investors — is unfazed.

    So Why the Pegasus?

    I don’t know exactly why we’ve seen four exceptional startups in our portfolio take this route, Dyn.com, Calm.com, Superhuman and Fitbod, but as the kids say, “I’m here for it.”

    We put $378,000 into Calm.com back in April 2014 and we own around 5% of the company (after selling a small percentage of our position in “idiot insurance”). Calm had $10,000 a month in revenue when we invested and have reported revenue of $7m in 2016, $20m in 2017, $80m in 2018 and an estimate of $150m in 2019.

    What people don’t know is what happened between 2014 and 2018, which is that the founders put their heads down and didn’t raise any significant capital. They just poured profits into their growth, team and product — and it worked.

    Their first round with venture investors was at ~$250m valuation and the second was at $1b.

    No Seed Extension, No Series A, No Series B … straight to what most would consider a Series C financing.

    Dyn.com, My First Pegasus

    Back in 2012 I was contacted by Kyle York of Dyn.com in New Hampshire to join their board. They were fans of the podcast and wanted marketing support from a hustler, so they pinged me (Kyle wrote a blog post about it: https://dyn.com/blog/true-board-story-the-email-that-landed-jason-calacanis/).

    I did a double take when they told me they were ramping from $4m to $35m in revenue, with a massive profit margin, but had not yet raised a round of funding. I joined the board and in 2016 they sold to Oracle.

    Again, the skipped multiple, dilutive rounds of funding.

    The team had built a simple product, charged a fair price, were frugal as f@#$k — and poured every penny back into the product.

    Since the company was in New Hampshire, it was outside of the venture-industrial complex, and it grew wings and soared to massive heights because, well, it had to.

    I never thought I would ever see another company like that again, but I have.

    Superhuman is a bit quiet about its fundraising and revenue performance, but since you’ve likely heard about the magic of the product and only read about its last round of financing with my pal David Ulevitch at a16z, you can be sure it took the Pegasus route.

    Fitbod came to our accelerator with $3,000 a month of revenue, and we’ve invested $399,000 into it over two investments, putting us at around ~7% ownership … but they haven’t raised since!

    At LAUNCH Festival Sydney, they disclosed they had hit $800k+ a month in revenue — and they haven’t raised a penny since.

    My pal Brian Alvey, who coached me on the book [ https://www.angelthebook.com/] and edited this piece with me, reminded me that Kickstarter raised a $10m round back in 2009 and has never raised from VCs again — perhaps making it the first Peagsus (anyone else got examples?).

    [ Oh yeah, follow Brian on the Twitter, he’s the got the best quips: http://twitter.com/brianalvey ]

    How to Be a Pegasus

    It’s fairly simple if you want to be a Pegasus, I can describe it in five tight bullet points:

    1. Have a modestly paid, small team that produces an extraordinary product (easy!).
    2. Charge from day one and pour those profits into growth.
    3. Focus on four things: team, product, customer feedback and growth.
    4. Triple revenue year-over-year.
    5. Ignore any ovation from an investor who doesn’t have the twitter handle @jason

    It’s really that simple.

    Step five is optionally mandatory, so if you are building a Pegasus I’m here to help, and by help I mean having you on the podcast, keynoting our events and cooking you a 14-hour brisket when you stay in the “Travis Kalanick Suite” at our place when you’re in town.

    Just email me at jason@calacanis.com and let’s put $500,000 into your bank account and then start the process of ignoring all other investors until we hit $10m in revenue.

    The Value of Being a Pegasus

    This is going to be fairly obvious to anyone in the industry, but to state it explicitly for new founders and civilians, there are two major benefits:

    1. For every round of financing you skip, you save 10-20% dilution. If you skip 2-3 rounds of financing this could double your ownership at an exit.
    2. You never have to stop working on your product to do a fundraising tour.

    If you’re an elite founder with an elite team, and you have the ability to focus, I highly recommend this strategy. If you come up against rabid competitors, sure, take the big money and go to war — just try and do it after you hit $5-10m in yearly revenue.

    Epilogue: Beware the Dark Pegasus

    It’s been reported, in a spectacular scoop by my pal Amir at the awesome The Information (not fake news), that a company called Toptal raised $1.5m on a convertible note and then never converted that note into equity because it was a Pegasus with a whisper number of $200m in revenue.

    The founder, Taso Du Val, also allegedly screwed his employees and co-founder out of their equity by never converting his LLC into a C corp and creating stock.

    This is a huge violation of the explicit covenant of startups: “we all lose a decade of our lives trying, or we get fabulously rich together.”

    Toptal is the Dark Pegasus, the worst of all animals … a creature so evil and filled with greed that not only do they want to preserve their cap table, they want to do so by screwing everyone they can — including their own family (aka, investors, employees).

    I spoke with Amir (http://y2u.be/2SyGZfObj2E) about Toptal, as well as with an employee who got screwed out of $2-$10m in my estimate (http://bit.ly/2m2bY0I) and I blew a fuse in the middle of the episode (sorry, I don’t do that often … in public).

    So, welcome to the magical land of startups … filled with packs of Unicorns, which we call a “blessing,” and now a half-dozen Pegasi flying above.

    Best
    @jason

    PS – LAUNCH SCALE, October 7-8 in SF, is free for founders; $500 if you want to come to lunch with me and the team or if you work for a bigger company, law firm, etc. It’s a killer event designed to help founders grow their startups. http://launchscale.net/tickets

    PPS – We are looking for a host city for LAUNCH Festival in 2020 through 2023 (four-year deal). The event has been in Sydney for the last two years and we’ve loved it, and might stay another four years but we agreed to open up the process. It’s $500,000 a year to underwrite the entire event, which has thousands of founders attending for free. We do this at breakeven in order to help founders grow their startups. If you’re interested (Berlin? Tokyo? Spain? Brazil? Rome? Austin? Miami? Nashville?), fill out this form and let’s have coffee. [https://host.launchfestival.com] In Sydney we ended up investing in five startups over two years, so we poured $500,000 back into the ecosystem (win! win!).

    Some great Podcast Episodes you might have missed:

    E967: Jeff from Twilio back on pod for the 3rd time. https://youtu.be/2Q86UjKU4uI
    E962: Finally got Sophia from Girlboss.com on the pod. https://youtu.be/pg0Ifx1TFAw
    E963: My Greek brother from Cameo.com, which is on fire, was on. https://youtu.be/ldxf2QiVlwc
    E939: Unicorn founder Melanie Perkins of Canva.
    https://youtu.be/8TBSg79Gf0M
    E901: SendGrid.com CEO Sameer Dholakia on the podcast after selling to Twilio. https://youtu.be/PcWs4WnWFvU

    Also, I gave a talk at Mark Suster’s Upfront Summit to discuss thesyndicate.com, which has invested $40.8m in 103 deals — including our first deal: Calm.com. https://youtu.be/YQa6vD9KG9Q

    The post The Pegasus Startup: Flying Over VCs on the Wings of Profits appeared first on Jason Calacanis.

     
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