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"Angel" hosted by Jason Calacanis - Audio on Smash Notes

"Angel" hosted by Jason Calacanis - Audio podcast.

December 28, 2019

In this series, Jason Calacanis interviews angels & VCs about their investment strategies and pulls back the curtain on how early-stage startups get funded.



Episodes with Smash Notes

0:01 Jason thanks the sponsors, guests, listeners & the team for Angel Season 4! 4:38 Jason intros Menlo Ventures' Shawn Carolan 7:26 Thoughts on the market's reaction to COVID-19, when will it get back to normal? 11:51 What advice is Shawn giving to his portfolio founders? 19:07 How has the job of a VC changed with the influx of hundreds of new funds, and what impact has the large amount of dry powder done to the industry? How has Shawn adjusted his approach in response to this? 26:07 Why paying a high price on valuation for dialed in startups (like Shawn did for Uber's Series B) is still a great bet 34:13 Shawn on passing in investing on Mahalo & Jason 36:20 What was it like having a "Force of Nature" portfolio founder like Travis Kalanick, who would destroy any obstacle in his path? What are some great founder attributes? 51:24 Shawn takes us through his Siri investment 57:55 Shawn takes us through his Roku investment 1:02:25 With the influx of Seed & Series A startups, how has Shawn adjusted how he meets founders? 1:05:00 Shawn takes us through his JUMP Bikes investment, are micro-mobility unit economics broken? 1:07:43 What will the outcomes of COVID-19 be in the startup community? 1:28:05 Shawn asks Jason how to best utilize his domain expertise to create high-quality content for Menlo Ventures

0:51 Jason gives some thoughts on quarantine & intros GGV's Jeff Richards 5:11 What will this crisis look like on the other side? Benefits of having a levelheaded approach 11:38 What has Jeff seen from his seasoned portfolio founders who went through the 2008 crisis? 16:21 What advice does Jeff give to first-time founders in his portfolio? 22:22 Investor panic & differences in opinion between independent & investor board members 25:50 What could inexperienced board advice be in a time like this? 30:45 What is GGV's typical check size, how many startups do they invest in per year, and how are their funds divvied up between early-stage & growth 33:26 Chances that current deals could be renegotiated? How can founders price themselves properly? 38:05 Jeff explains liquidation preferences 42:52 How should companies approach taking venture debt in a time like this? What is Jeff's criteria for taking venture debt? 51:11 If things are going poorly, what are some things founders can do to right the ship? Examples of great pivots that saved companies 57:58 What is Airbnb's roadmap from here on out? 1:02:12 Why Jeff doesn't get enamored with IPO valuations & why he is long tech 1:08:18 Thoughts on Zoom, anti-trust laws & more

0:52 Jason intros Greylock's Sarah Guo 3:37 How did Sarah wind up at Greylock? 5:45 Sarah explains Greylock's "Zero to One" thesis & typical term commitment of a VC 11:53 How does Sarah measure her personal performance and her portfolio's performance? What are her biggest strengths as an investor? 16:12 How does she sharpen her decision-making skills? 17:53 Ranking her investment criteria: People, Markets & Product 20:26 Balancing intensity & life outside of work, the commitment of early-stage startups 27:26 Work-life balance & how the venture landscape changed over time 35:36 Greylock's structured & what was Sarah's first investment & how did it play into her investment thesis? 43:38 Sarah's investments in work-enabling software 48:00 Sarah recommends Dylan Field of Figma join the show - episode dropping Friday! 49:22 Identifying subtle flashes of brilliance in early products 58:28 Female founders being held to a higher standard 1:02:35 Anti-portfolio: Zoom 1:10:06 Sarah turns off her virtual background and reveals her location

0:53 Jason intros Bessemer's David Cowan 1:54 David explains how he got his start in Venture capital in 1992 4:22 What does Bessemer look for in a potential investor today? How has VC hiring and demographics have changed over time? 8:10 David gives an anecdote about understanding "sunk cost" 14:12 David explains how and why Bessemer started owning their anti-portfolio 16:03 Stories on passing on Facebook, Tesla, Google, PayPal, Napster & Youtube 19:13 What made Youtube standout from Napster from a regulatory perspective 24:05 David describes hearing the Twitch pitch for the first time 26:00 Consumer vs. Enterprise investing 29:42 Sales-driven culture 33:31 When is the right time to sell a company? 41:15 Anti-tech backlash... is it justified? 47:38 Who is the best Founder & CEO David has ever worked with? 52:10 Meeting Wade Foster and investing in Zapier 55:29 Are growth & product people making the best VCs today? 58:53 Thoughts on Quantum Computing 1:02:19 How is David investing in Robotics? 1:09:58 Jason ends the show by showing the trailer to David's Silicon Valley mockumentary "Bubbleproof"

0:53 Jason intros Nicole Quinn 1:59 Nicole & Jason describe their separate Calm investments, will it be the first mental health IPO? 8:00 Calm's I.C.E. celebrity engagement method & how it got them LeBron James 8:54 Investing in Sophia Amoruso & Girlboss: what is it about "Force of Nature" product people that attracts Nicole to invest? 16:03 Investing in Gwyneth Paltrow & Goop: what is Goop's business? What are the most profitable parts of their business? 19:42 Investing in Rothy's, and the inverse correlation between the success of e-commerce companies and how much they've raised 24:34 The magic moment of having shares transfer from private to public when a company IPOs 26:53 Changing her risk-averse mindset going from Wall Street to Venture Capital 33:28 Nicole's current investment interests, why voice assistants are crucial for retention 38:16 Investing in Lady Gaga & HAUS Labs: driving business via new product "drops", understanding how engaged a celebrity is in their business, celebrities as an acquisition channel 45:03 Dealing with Goop product blowback, the Netflix series & understanding the science behind it 50:12 Investing in Cameo & CEO Steven Galanis: celebrity selfie videos as a platform 54:44 What types of Founders does Nicole invest in? 56:54 How is Nicole's portfolio split up by stage?

0:51 Jason intros Bain Capital's Ajay Agarwal

3:17 Are we experiencing late-stage capitalism? Is capitalism broken?

8:22 Why is upward mobility stalling?

15:29 What is it about founders & startups that made him dedicate his life's work to?

18:46 What piece of knowledge got him in startups? Ajay describes gross margin & incremental costs

23:03 Two insights on why enterprise software is the best business

30:11 Mitt Romney at Bain Capital & issues with cultural appropriation

36:44 Ajay's early days at Trilogy Software, how software sales were different in the 1990s

42:23 Companies going from sales-driven culture to product-driven

46:52 Ajay describes one of his best investments: FourKites

49:13 Ajay describes the biggest miss of his anti-portfolio: Pinterest, and why some firms care about stage and some are stage-agnostic

54:57 Has Bain ever participated in every round of a companies life-cycle?

58:15 Effects of the SoftBank Vision Fund on venture capital as a whole

0:50 Jason intros Benchmark's Sarah Tavel 1:20 Aside from Slack, what other companies grew like consumer-facing but charge like enterprise? 3:19 How was Sarah recruited to Benchmark? How is Benchmark different from other major VC firms? 12:04 Limited upside of talking to the press in 2020 17:30 Growing up in NYC and going to Harvard 21:30 Jason on becoming a "Don't touch the thermostat" dad 23:58 How did the offer from Peter Fenton go down? What drew Sarah to Benchmark? 28:36 Sarah's thoughts on disrupting VC as a woman from the inside & from the outside 37:30 How going from operating to investing is trading stress for anxiety 40:51 Jason and Sarah discuss their most personal & significant investments: Calm & Pinterest 47:26 How Pinterest's business model was a mold of Facebook and Google 49:45 Jason tells regulators how to stop Google 58:14 Investing in Chainalysis & Crypto infrastructure 1:12:44 Are the best companies polarizing? 1:16:30 Investing in Hipcamp 1:29:43 Marc Andreessen asks Sarah a question

0:50 Jason intros CRV's George Zachary 2:20 Passing on Google at MDV and coming to peace with the anti-portfolio 5:51 Differences between leadership & management, where Steve Jobs, Larry & Sergey fell on that scale 10:27 Why 1990's VC was sales & marketing-driven instead of product-driven as it is now 12:52 What shifted the philosophy to product-driven businesses? 18:00 Meeting Elon Musk in the 1990's and backing Zip2 21:59 What were Seed investors like in the '90s? Origins of Sand Hill Road 25:48 Elon pitching Zip2 to a conglomerate of venture firms & selling Zip2 for cash 28:07 How VCs can be conceptually right and wrong in the outcome, how X.com merged with Confinity and became PayPal 33:27 Why is it harder to 3x the massive venture funds? How is age a limiting factor in VC? 40:28 "It doesn't make a difference what you pass on. It only takes 1 company to make your career." Positive & negative feedback cycles in VC. 42:54 Battling through multiple portfolio companies dying at once 44:15 What was George's biggest investment hit, both economically & personal fulfillment? 52:37 George describes his recent health scares and how they shifted his investment focus 1:04:06 Reasons the life-expectancy in the US has gone sideways in recent years 1:07:39 Potential health-tech advancements in the near future 1:21:58 Thoughts on CRISPR & "designer babies" 1:30:27 Cell-based fish & meat 1:37:32 Potential coronavirus repercussions - what's real and what's not? 1:55:13 Jason calls for eliminating handshakes

0:50 Jason intros Coatue Management's Dan Rose 1:52 Dan takes Jason through getting his internship at Amazon in 1999 and meeting Jeff Bezos 6:55 What was Amazon's core business in 1999? What was it like incubating the Kindle in the mid-2000s? 10:04 How did Bezos grow as a leader and businessman during Dan's tenure at Amazon? 18:21 How does Bezos' ability to turn Amazon around in the eyes of public investors relate to Uber, Lyft and other large & unprofitable companies? How does Bezos inspire so much loyalty? 23:27 What was Amazon's company culture during Dan's tenure? How was AWS developed? 26:08 How did Dan wind up at Facebook as employee ~130? What did he see in a young Mark Zuckerberg? 32:13 Who created the original Facebook News Feed? 35:34 How did they get the ad-network to work at scale? 42:50 Where do Elon, Bezos & Zuckerberg rank in the Pantheon of Entrepreneurs? 44:06 How did the billion-dollar acquisition offer from Yahoo! fall apart? 46:42 Why launching open registration led to the billion-dollar investment by Microsoft 48:30 Insights on the Instagram deal 51:00 How Facebook bounced back from the stock dropping from $31 to $17 shortly after IPO & how Dan's experience at Amazon helped him rally the troops? 58:44 Zuckerberg's response to mistakes 1:03:01 How did Dan wind up at Coatue Management leading a $700M early-stage fund? 1:08:01 What is Coatue's strategy around data science? 1:11:20 Dan had over 100 Angel investments before joining Coatue 1:13:18 What is Coatue's new fund strategy? 1:16:09 How does Dan think of diligence in regards to early-stage companies? 1:20:25 What does Dan want to see in an ideal founder?

0:01 Jason intros Season 4 of Angel & Index Ventures' Sarah Cannon 3:22 How did working for the Obama administration lead Sarah into Venture Capital? 4:56 Picking a fight with Larry Summers as an intern 15:42 Choosing Harvard's MBA program over Stanford's 18:26 Getting into VC 20:27 Working at CapitalG 24:09 How was the foundation of Index built by Danny Rimer and what is Sarah's role? 31:42 What does Index focus on during a Series A and what is a partner meeting like at Index? 36:31 Thoughts on gig economy work and is there a better way to categorize freelancers and full-time workers in the gig economy? 44:54 Sarah's proposed solution for categorizing gig economy workers 46:36 Jason's thoughts on politicians evolving their views over time 50:15 Ideas to increase upward mobility in America 1:00:35 What was Sarah's first investment? How did it work out? 1:08:42 Founders getting distracted after raising large rounds of funding 1:11:05 Thoughts on emerging international startup markets like India & Australia 1:13:19 Is France an underrated startup market? 1:17:42 What is Sarah most passionate about investing in?

Samantha Wong, Partner at Blackbird Ventures (Canva, Culture Amp), shares insights on the growth of Australia's startup ecosystem, valuations outside of SV & benefits for investors, focusing on deep tech & "science nonfiction," backing founders with an unstoppable force, & how immigration laws impact entrepreneurship