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  • Jason Calacanis 06:19:47 on 2021-03-26 Permalink
    Tags: Angel Investing, ,   

    Paul Judge on helping lead SoftBank’s $100M Opportunity Fund, the future of VC & more | This Week in Startups Blog 


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    Top Insights


    • Investing over zoom expands the top of the funnel and lowers the barrier to entry for all founders
      • Investors can take 2-5x more meetings with founders from anywhere in the world
    • Paul’s thesis: Investing in overlooked founders will likely generate outsized returns
      • The American Southeast and Midwest include 44% of the US population but only receive 14% of VC funding
      • Despite this, 36% of last year’s Inc. 5000 reside in these regions with a median growth rate of 161% year-over-year
    • The “either or” debate between making existing firms invest in underrepresented founders from their main funds OR raising “opportunity” funds that are specifically focused on underrepresented founders isn’t helpful, both are necessary to make VC funding more equitable
    • Jay-Z had the best Q1 2021 of any entrepreneur or investor
      • Tidal was acquired by Square for $297M, he sold 50% of Ace of Spades to LVMH for ~$300M, launched $10M cannabis-focused fund to back black founders, Oatly filed for IPO

    Intro


    • Paul Judge, Ph.D. is Managing Partner of Panoramic Ventures, a VC fund that invests in “underserved geographies and overlooked founders” prioritizing the American Southeast and Midwest. Paul is also Co-Founder & Executive Chairman of Pindrop, an information security company that provides risk scoring for phone calls to detect fraud and authenticate callers). Pindrop’s most recent valuation was $900m in 2018.
    • Paul also serves on the investment committee for SoftBank’s $100m+ Opportunity Growth Fund to invest in Black, Latinx and Native American founders
    • Paul is based in Atlanta, but has become a Miami regular.
    • Atlanta’s startup scene is heating up:
      • Airbnb just located it’s East Coast engineering team there
      • Local Unicorns: Calendly ($3B), Greenlight ($1.2B, consumer fintech), Rubicon ($1B, recycling technology), SalesLoft ($1B, sales software)
      • Strong talent pipeline from Georgia Tech

    The virtual-first investing paradigm shift


    “I see more companies than I would have seen otherwise, the top of funnel is wider. From the entrepreneur’s standpoint, it’s easier to get a meeting with an investor than it was traditionally. That means a whole new generation of entrepreneurs that wouldn’t have had access, now have more access to venture capital funds & angel investors.”

    Paul Judge
    • Paul has made 25 investments in 2020, all over Zoom. He has met 2 founders in person, but only after investing.
    • Being an active investor in 2020 required going virtual. Most investors never considered this a viable method prior to the pandemic. Both Paul & Jason discovered that virtual investing offered a new set of benefits:
      1. Investors can take 2-5x more meetings because intro meeting times went from 2-3 hours to 20-30 minutes. How?
        • Commutes and pleasantries are eliminated, and everyone gets down to business ASAP.
        • Conversations now start with hard numbers. Entrepreneurs have become more direct in their approach, making the information needed to diligence an investment up-front in their first email.
      2. Investors now have much greater access to founders outside their city. Travel and cost of living in the Bay Area are high and are no longer an obstacle for founders.
        • By taking more meetings from broader geography, investors are able to reduce their bias.
        • With more meeting slots available, it’s easier to take a chance on a founder you wouldn’t have met with pre-COVID.
      3. Virtually, the pattern-matching necessary to be a great VC becomes more about assessing the founder based on their performance, rather than by charisma or presentation skills.

    How Paul Judge invests


    • Paul’s Techsquare Labs was focused on backing top talent (students & professors) from local universities like Georgia Tech, funding founders at the pre-seed and seed stages.
    • He is now expanding to be involved at Series A & B both at SoftBank and Panoramic Ventures, which just launched a $300M fund.
    • Paul knew 2/4 other members of the Softbank Opportunity fund’s investment committee from being a part of the 2016 class of Aspen Institute’s Henry Crown Fellow Program.
    • Panoramic’s thesis: investing in overlooked founders will generate outsized returns.
      • The American Southeast and Midwest receive only 14% of VC funding even though they include 44% of the country’s population.
      • 36% of last year’s Inc. 5000 reside in these regions with a median growth rate of 161% year-over-year.

    How to make investing more equitable


    “Black founders are not just solving black problems, they are solving some of the most meaningful problems that exist.”

    Paul Judge
    • The “either or” debate between making existing firms invest in underrepresented founders out of their main funds OR raising “opportunity” funds that are specifically focused on underrepresented founders isn’t helpful, we need both to make venture capital more equitable.
    • VC firms typically don’t change their partners often (turnover typically occurs with a new fund every 3-7 years), so adding new diverse partners to existing firms is a slow process.
      • The industry needs to evolve in this way, while also meeting fiduciary responsibility to limited partners who invested in the fund.
    • Purpose-built investment vehicles like SoftBank’s Opportunity Fund have a clear mission and can make an impact right away.
      • Another benefit is creating an ecosystem where some of the top underrepresented entrepreneurs can support & inspire each other.

    Jay-Z’s groundbreaking Q1 2021


    “I was just talking with somebody about who had the best quarter, Chamath or some other venture capitalist and I was was like, ‘No, I think Jay Z had the best, he just sold half Ace of Spades to LVMH.'”

    Jason

    “I love that love Jay-Z’s going after industries that have traditionally been unfair to the people that have been creating value. The music industry is traditionally unfair to the creators, so he did Tidal. In food and beverage, the Crystal CEO got shot himself in the foot, so [Jay-Z] went after that. Then if you look at the cannabis industry, I mean, it’s not exactly tech, but it’s creating tens of billions of dollars of value. It’s one of the most valuable crops that this country’s ever seen. But if you look at everyone that’s going public, there’s no diversity, but we all know this country was built on the backs of blacks tending to crops.”

    Paul Judge

    Companies Paul Shouted Out


    The post Paul Judge on helping lead SoftBank’s $100M Opportunity Fund, the future of VC & more | This Week in Startups Blog appeared first on Jason Calacanis.

     
  • Jason Calacanis 15:00:23 on 2019-01-03 Permalink
    Tags: Angel Investing, , , , , , ,   

    As an angel investor should I invest in a founder working on two projects (or working half time on one)? 


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    Peter Thiel (in crown), playing multiple Paypal employees at chess — including Sacks (the only winner) and Roelof Botha (to right of Sacks).

    Just got asked this question on Quora.

    If it’s Elon Musk or Jack Dorsey, sure, go ahead and invest in them.

    If it’s anyone else, it’s likely not going to work out well as an investment.

    [ Click to Tweet (can edit before sending): https://ctt.ac/c1U8m ]

    There are some serial founders who specialize in starting and handing off startups to exceptional managers; Sky Dayton (who founded Boingo Wireless, EarthLink and other startups) comes to mind, but these individuals are rare.

    You need to ask yourself as an angel investor the following two questions when looking at a founder with “founder ADD”:

    1. Has this person managed multiple projects before and how did that work out? I’m going to assume they haven’t done this before or you wouldn’t be asking the question.
    2. Does this person really believe in this startup, product, team and market, and if they do, why are they distracting themselves with other projects?! Perhaps they are hedging their bets.

    The second question is the important one here. Perhaps the person started the project, needs to spend time with a sick family member, and they have an exceptional President and management team. In that case, I would evaluate the performance of the team and the likelihood that the President can take over as CEO.

    Bottom line: startups are absurdly hard. Running two at the same time is like winning two chess matches at once. Anyone can play two games of chess at the same time, but very few will win both. This is an imperfect analogy, of course, because startups are not “win/lose,” they are more like “win small/win medium/win big/win gigantic/lose.” Even if the person wins both games, perhaps they will just win modestly —- which will suck for you as an angel investor.

     
  • Jason Calacanis 15:00:23 on 2019-01-03 Permalink
    Tags: Angel Investing, , , , , , ,   

    As an angel investor should I invest in a founder working on two projects (or working half time on one)? 


    Warning: preg_match_all(): Compilation failed: invalid range in character class at offset 7 in /homepages/23/d339537987/htdocs/ec/wp-content/themes/p2/inc/mentions.php on line 77
    Peter Thiel (in crown), playing multiple Paypal employees at chess — including Sacks (the only winner) and Roelof Botha (to right of Sacks).

    Just got asked this question on Quora.

    If it’s Elon Musk or Jack Dorsey, sure, go ahead and invest in them.

    If it’s anyone else, it’s likely not going to work out well as an investment.

    [ Click to Tweet (can edit before sending): https://ctt.ac/c1U8m ]

    There are some serial founders who specialize in starting and handing off startups to exceptional managers; Sky Dayton (who founded Boingo Wireless, EarthLink and other startups) comes to mind, but these individuals are rare.

    You need to ask yourself as an angel investor the following two questions when looking at a founder with “founder ADD”:

    1. Has this person managed multiple projects before and how did that work out? I’m going to assume they haven’t done this before or you wouldn’t be asking the question.
    2. Does this person really believe in this startup, product, team and market, and if they do, why are they distracting themselves with other projects?! Perhaps they are hedging their bets.

    The second question is the important one here. Perhaps the person started the project, needs to spend time with a sick family member, and they have an exceptional President and management team. In that case, I would evaluate the performance of the team and the likelihood that the President can take over as CEO.

    Bottom line: startups are absurdly hard. Running two at the same time is like winning two chess matches at once. Anyone can play two games of chess at the same time, but very few will win both. This is an imperfect analogy, of course, because startups are not “win/lose,” they are more like “win small/win medium/win big/win gigantic/lose.” Even if the person wins both games, perhaps they will just win modestly —- which will suck for you as an angel investor.

    The post As an angel investor should I invest in a founder working on two projects (or working half time on one)? appeared first on Calacanis.com.

     
  • Jason Calacanis 15:00:13 on 2019-01-01 Permalink
    Tags: Angel Investing, , , , ,   

    How to get an angel investor’s attention? 


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    Don’t say everything

    Got asked this question on Quora. The answer for me, and for most angels, is easy: send a short email with a link to the product or a product video.

    Protip: Do not email your life story or 3,000+ words on why you built your product. This will make you look deranged.

    The goal of your email is to get the investor to a) understand what you’re doing and to b) respond.

    You want to send just the most important thing, which is one of the following things 99% of the time:

    1. your product
    2. your traction
    3. your market
    4. your technology
    5. you

    What you don’t want to do is send an angel EVERYTHING in the first email. Get them on the hook with the best thing (perhaps two things) and try and get them to ask you more questions.

    As an example, Henry from Cafe X sent me a video of the prototype of the Cafe X machine, along with two sentences, while based in Hong Kong. Since then, I’ve invested millions in the company, I’m on the board and they have three locations rocking in San Francisco. Mission accomplished.

    Note: I don’t respond to all my emails, I get around 300–500 per day… but I do open most of them, and I do click on links often.

    PS – I’m going to try and write a blog post every day in 2019 and set them to publish at 7AM… consider this day one of 365.

     
  • Jason Calacanis 15:00:13 on 2019-01-01 Permalink
    Tags: Angel Investing, , , , ,   

    How do you get an angel investor’s attention? 


    Warning: preg_match_all(): Compilation failed: invalid range in character class at offset 7 in /homepages/23/d339537987/htdocs/ec/wp-content/themes/p2/inc/mentions.php on line 77
    Don’t say everything

    Got asked this question on Quora. The answer for me, and for most angels, is easy: send a short email with a link to the product or a product video.

    [ Click to Tweet (can edit before sending): https://ctt.ac/3lcnX  ]

    Protip: Do not email your life story or 3,000+ words on why you built your product. This will make you look deranged.

    The goal of your email is to get the investor to a) understand what you’re doing and to b) respond.

    You want to send just the most important thing, which is one of the following things 99% of the time:

    1. your product
    2. your traction
    3. your market
    4. your technology
    5. you

    What you don’t want to do is send an angel EVERYTHING in the first email. Get them on the hook with the best thing (perhaps two things) and try and get them to ask you more questions.

    As an example, Henry from Cafe X sent me a video of the prototype of the Cafe X machine, along with two sentences, while based in Hong Kong. Since then, I’ve invested millions in the company, I’m on the board and they have three locations rocking in San Francisco. Mission accomplished.

    Note: I don’t respond to all my emails, I get around 300–500 per day… but I do open most of them, and I do click on links often.

    PS – I’m going to try and write a blog post every day in 2019 and set them to publish at 7AM… consider this day one of 365.

    The post How do you get an angel investor’s attention? appeared first on Calacanis.com.

     
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