ANGEL by Jason Calacanis

May 11 2020

Two things I find interesting: How businesses succeed and how other people make money.
This book concerns angel investing, the early stage of raising cash for startups.

In the fashion of previous business book summaries, I will keep this to the point, for easy perusing.


Founding Rounds for Businesses (rarely all observed):

  • Sweat Equity = founders work or free
  • Bootstrapping = money found outside of investors (e.g. clients willing to finance product)
  • Friends & Family
  • Self-funding
  • Incubator Funding = 5-10% seed funding (25k-150k)
  • Seed/Angel Funding = usually after 23 rounds above
  • Bridge Round/Seed Plus = angel money runs out before the company qualifies for Series A
  • Series A = usually done by professional venture capital firm
  • Series B-F & Mezzanine Rounds = usually far removed from angel investing

For Whom Angel Investing Is:

Angel investing is done for businesses less than three years old, with no traction, which are looking for product or market fit. That is, when direct investing. Syndicate investing will be discussed below.

If a business has achieved sufficient monetization, it is either bought by a bigger company or it goes public. Both of these outcomes, which are giving investors a return on their money, are known as exit.

Other potential outcomes are so called acquihires, in which a company is acquired specifically to hire it’s talent, and unicorn companies which manage to get a value of 1 billion USD.

Angel Skills:

  1. Money(have it)
  2. Time(give it)
  3. Network(connect them)
  4. Expertise (teach them)
  5. People Skills(read them)

Angel How-To’s:

Pro rata means continued investing in subsequent round so one may maintain one’s original percentage in a company. It is advised to insist on** pro rata rights** in contracts with companies.

Relocate to Silicon Valley or Sweden.

Your time is valuable.

Angel Syndicates are groups of investors willing to pool together under a leader, to invest together. They is a carry, or carried interest, and it is the share of profits that go to the syndicate lead.

New Angels should do 10 small syndicate investments first before direct investing. This may get you a return, or if nothing else, a reputation.

On how to choose an investment while using a syndicate:

  1. Lead has at least 5 years investing experience and one unicorn investment.
  2. Situated in Silicon Valley.
  3. At least 2 founders.
  4. Product or service is already in the market.
  5. Either 6 months of continuous user growth or 6 months of revenue.
  6. Notable Investors.
  7. Post-funding, 18 months runway.

On building ‘social currency’ with other angels:

  • Create spreadsheet of all co-investors in ten startups invested in (~600 investors)
  • Add LinkedIn, Syndicate, Twitter & Facebook URLs
  • Connect with each on all platforms
  • Make Twitter list titled “co_investors” and add all investors, fav, retweet & reply to fellow investors’ tweets 1-2 times daily

Don’t fall for artificial deadlines and scarcity.

How to meet a founder:

  • 1h minimum + 30 minutes
  • Full attention
  • “Let me turn off my phone”
  • Pen & paper
  • Conference room > Coffee Shop
  • Asking for more detail shows beforehand shows that you are focused on things that matter
  • Never say Yes or No during a pitch
  • Go for big ideas & strong founders
  • Businesses made from bits > businesses made from atoms
  • It is easier to know what won’t work

How to judge a founder:

  • Question why a founder doesn’t want to do certain jobs
  • Question why they think they will have “balance” in their life

Write deal memos.

Insist on monthly updates.

Bad founders are revealed in year 2.

Feature Death March” - the belief that just adding two or three more features will surely help to make a company big.

If the press calls, tell the founder and avoid answering the journalist.

Some angels bet on founders, some on problems, some on delight and some on markets. Decide.


  1. Only Silicon Valley
  2. Always Meet
  3. Due Diligence
  4. Write on Paper
  5. Demand monthly updates

Useful Quotes:

“When you first start investing, you should meet with as many people as possible but invest in as few deals as possible.”

“Your challenge isn’t writing checks, it’s convincing the right founders to cash them.”

“Avoid the liars. Embrace the delusional.”