Book Review: Angel: How to Invest in Technology Startups by Jason Calacanis

How to Invest in Technology Startups – Advice from an Angel Investor Who Turned $100,000 into $100,000,000

This new book from Hall of Fame angel investor Jason Calacanis is another inspirational underdog story. Brooklyn-bred Calacanis was not someone destined for the world of angel investing. Calacanis grew up in the working-class Bay Ridge area of Brooklyn to a family of humble circumstances. As a C-student and psychology major while studying at Fordham University, nothing about Calacanis’ upbringing intimated the rocket ship success he would eventually come to realize during his working years after college.Getting his first taste of success with his dot com era publication, the Silicon Alley Reporter, which documented New York’s emerging tech scene. Calacanis then founded Weblogs which was eventually bought out by AOL for $30 million after only 18 months in operation. Calacanis then began his career as an Angel investor. The lessons learned from his trials and tribulations during this part of his life.My favorite thing about this book is how applicable many of the lessons are to broader areas of life. Whether you’re a single mom, college student, budding entrepreneur, or a serious investor, Calacanis’ logical framework for evaluating deals and sizing up individuals have broader applications for people in general who are interested in finding ways to optimize their time for maximum value.Even better, Angel gives those who feel intimidated by the big money world of venture capital investing an accessible game plan for getting their start. Calacanis’ advice really makes understanding and even becoming personally involved in angel investing attainable to broader groups of people.As a cryptocurrency investor, I found many of the conceptual metrics in the angel investing world directly applicable to my goals in cryptocurrency investing. The lingo was 1:1 in many instances, with Calacanis habitually throwing out terms familiar to avid crypto investors like “10x” or “100x” when discussing ROI on an investment. Personally, I like his application of “deal memos” which I plan to use when evaluating projects to invest in. The way a deal memo works in sum is you write down the things you like about a project as well as the things you don’t like, and then you revisit that memo at some point in the future to see what you may have gotten right and wrong. The goal of this activity is to document your lessons learned and identify patterns that you can use to inform your criterion for evaluating future deals.I also like how Calacanis advocated syndicates through platforms like Angel List as a way of giving smaller investors access to deals by big investors like Calacanis. This reminds of pools that cryptocurrency investors form to gain access to presales, which often have high minimum investment amounts like $50,000 or more. Additionally, diversifying an amount of capital, say $10,000, in equal increments, say $1,000, across multiple investments (10 in this case), is useful for the cryptocurrency investor. You only need one of these to do a 20x or 100x to cover for any of the duds. Participating in many deals and allocating a smaller amount of capital to each one is better than allocating larger amounts of capital in fewer deals as a general matter.A polarizing figure due to his brash Brooklyn-style abrasiveness, Calacanis is certainly not the kind of individual that will appeal to everyone. For me, I see him as a champion of the little guy who is honest about his insecurities (i.e. not having been born into money) and is even ready to acknowledge the advantages he’s had being born who he was during this time in history. In that regard, he is correct. Many of us take for granted the freedoms and opportunities we enjoy that are unavailable to the clear majority of the world’s people today, and utterly impossible for anyone who lived in previous generations because of the technological progress made since. I highly recommend this book to anyone who wants to have an accessible and fundamental understanding of investing in startups, particularly from a relatable underdog for most readers. Calacanis even shares industry terminology which I have used in conversations with VCs and angels since reading the book. The book is substantive enough with insights that you can credibly court people from this world and seem like a knowledgeable insider, especially if you’re applying the concepts while simultaneously investing. I’ve found that having read this book while actively investing in cryptocurrencies and meeting with project teams added much value to my efforts and compounded my understanding of the concepts.