Jason Calacanis does not give the impression of being a financial savior from Silicon Valley, where it is fashionable for the world’s richest men to pretend to feel an embarrassing modesty about their wealth and power.
Calacanis, an entrepreneur and investor who claims to be worth more than $100 million, has no such limitations. He is a rich man who often behaves like a caricature of a rich man: a brazen and conceited New Yorker who boasts about his cars (“I have all the Tesla”), flaunts with false modesty a popular podcast he participates in (he claims it generates about $1 million in annual revenue, “but the main thing is not the money, but building a brand”) and even promotes his own paper coffee cups.
“Have you seen my new cups,” he asked, as a greeting during an interview last month. “I love my cups. They have my slogan: ‘Do The Work.
Calacanis, 46, admits that his personality is not for everyone. “Most people think I’m lucky, some say I’m a fraud, and a handful think I’m a great, bright man: I don’t agree with any… I agree with everyone,” he says in his new book, which was published in July and has the full title of a tongue twister: “Angel: How to Invest in Technology Startups - Timeless Advice From An Angel Investor Who Turned $100,000 into $100,000,000.
The rest of the world is taking in what many in Silicon Valley believe: the technology industry is decimating the wealth and stability of the planet. Investors like Jason Calacanis are betting on investing in new companies to achieve balance.
The rest of the world is assimilating what many in Silicon Valley believe: the technology industry is decimating the wealth and stability of the planet. Investors like Jason Calacanis are betting on investing in new companies to achieve balance.
However, there is something refreshing and enlightening about Calacanis’ honesty when it comes to the fortune he has made through technology. He states plainly what many believe in Silicon Valley, but they are too political to say it - and the rest of the world has realized this lately - that the technology industry is decimating the wealth and stability of the rest of the planet.
Silicon Valley companies - especially the Fearsome Five: Apple, Amazon, Google, Facebook, and Microsoft, all of which hire a chosen and privileged few - seem to be on the verge of systematically gutting a large part of the rest of the economy. And while Silicon Valley technologies could improve our lives enormously, we are learning that they could also destabilize large portions of the social fabric: allowing outside figures to wreak havoc on our choices, promoting distrust and conspiracy theories in the media, generating the highest levels of inequality in history, and cementing a level of corporate control over culture and society not seen since the days of the “robber barons.
People within the technology industry have been discussing these issues since the 2016 presidential election and are currently pushing many initiatives to expand the benefits of their industry. Just this week, a large number of the largest technology companies pledged $300 million for computer science education.
However, Calacanis is showing a much grimmer view of the disruptions the technology industry has caused, and a more radical, but also advantageous, plan to address them. If you are looking to survive the next earthquake, Calacanis warns that you must reassess the plan for your future and learn about Silicon Valley’s behaviors rather than hope to defeat it.
“Most of you are finished,” he says in his book, arguing that a future revolution in robotics and artificial intelligence will eliminate millions of jobs and destroy the methods used to get ahead in the United States. “A few are taking over the world: the powerful and smart ones who know how to create those robots or how to design the software and tablet they are reading this about.
Calacanis is not entirely optimistic about where this change will take us. “According to me, honestly, I think we have a 70% chance of finding out where this change in the tide is heading without starting a total revolution on the streets, as we saw in Greece or Egypt, or anywhere else where unemployment among young adults reaches 20%,” he says in his book.
Warning: one reason Calacanis is willing to diagnose this economic disease is because he is also selling the recipe for curing it.
His book is intended to be a guide to getting into the business of investing in many young companies in the technology industry that are in their early stages, which is known as “angel investing. Calacanis is selling the idea of a kind of populist movement in which to invest: he is looking for doctors, lawyers and other wealthy people, even some from the middle class, to bet on new companies, as he claims it is the best way to prepare financially for technological change.
“I want to inspire 10,000 people to become full-time angel investors,” he says.
The financial advisors I have spoken to are not convinced by Calacanis’ advice. They say his approach is no different than gambling and warn that the potential gains are not worth the risk. Invest in new companies with “fun money” but not the money you have for your future, suggested Spencer Sherman, founder of Abacus Wealth Partners.
Even other investors in the technology industry don’t trust the movement Calacanis is proposing. Hunter Walk, one of the partners of Homebrew, a venture capital fund in its infancy, said it would be better for ordinary investors to invest their money in public industry giants than to bet on small firms. “If you’re not willing to lose all your money, you shouldn’t do it,” Walk advised.
You could say that Calacanis’ attitude is one of impudence, or that it is a scam, a quality he has in abundance. Growing up in a working class Brooklyn family, he says he spent much of his youth wondering, “How would it feel to be rich?
He had his first career opportunity in the 1990s as a reporter, covering the fledgling Internet industry in New York. He later helped found Weblogs, one of the first digital media companies, which he sold in 2005 to AOL for $30 million. Along the way, he has made dozens of connections - he occasionally mentions some of the big names in the industry - and now, as an angel, he uses them for “transaction flow” because he is among the first to gain access to the investments of the best new companies.
In 2009, the venture capital firm Sequoia recruited Calacanis to be one of its “headhunters”, an informal network of entrepreneurs looking for promising companies on behalf of the firm. As part of that program, Calacanis invested $25,000 in a crazy friend’s idea: a cab company that would operate through technology. The friend was Travis Kalanick; the company, Uber. Despite the company’s recent crisis, so far this transaction is one of Calacanis’ greatest victories as an angel, valued at nearly $100 million on paper.
A downside to Calacanis’ advice is that his victories cannot be replicated on a large scale: after all, not everyone can make a fortune from the multi-million dollar ideas of his friends.
Moreover, he is honest about the risks. The book begins with a warning in the form of a disclaimer written in capital letters: “Don’t read this book if you can’t afford to lose money by investing in the riskiest asset class on the planet: new businesses.
But for Calacanis, the risks are worth it. The world seems to have lost its principles: it is changing in ways that none of us can predict anymore.
So shouldn’t he take a big risk? As Calacanis points out: “If you don’t gamble, you have no future”.