Friday, March 29, 2013

Most Entertaining Investor Interview Ever: Chris Sacca by Jason Calacanis

Chris Sacca of Lowercase Capital is an investor in several well known US consumer web, mobile, and wireless technology startups like Twitter, Kickstarter, Uber, etc. A lawyer by education, he earlier worked at Google.

Personal story

Amazing story of how he lost millions in leveraged trading and how he clawed his way back.

"Fake it till you make it": Highly entertaining story about how, when he was out of job, he created a fake management consulting company, The Salinger Group, and handed out its card at various networking forums (including TiE). He even offered to let his friends who were also out of jobs to use the company's name!

On Entrepreneurs 

Truly Disruptive Entrepreneurs: Failure is not part of the options for them. They never doubt the outcome. They just think "the world will be a better place if this product gets built".

If I'm the one asking the entrepreneur how can this be bigger, then I worry  

Merits of working in a small company

While whoever is nearest to the door becomes the receptionist, the learning curve is so steep that very quickly, you might even be standing in for the CFO.

Working at Google

At Google, you could show up in other people's meetings - if you are being useful, no one asks why you are here.

Interesting story of how he had to buy up data center capacity across the world without alerting competitors like Microsoft - so that they don't realize how quickly Google was growing.  

On Raising a fund

It's tougher than raising money for a company since in the case of a company, the investors are betting on a combination of the person, product and market. On the other hand, in the case of a fund (especially a solo fund - i.e., being managed by one person), they are betting just on the person.  

On Investing

Managing your own psychology is 100% of investing

 Dealflow for best performing deals: Being genuinely helpful is the best way to get the best dealflow. Spend more time networking ("breaking bread") with entrepreneurs, other investors and advisors than by speaking at major events like TechCrunch, etc.

Is increasingly excited to invest in companies that are at the intersection of content and technology. "The costs are decreasing and the audience is increasing." 

Misalignment of interest between early stage and later investors

"It's all fun and games until you get to Series B (second round of funding)."

When an investor comes in at Series B, he wants a binary outcome; ie he wants the company to "go for broke".

This creates political infighting: entrepreneur verses angels versus early VC investors ve later investors


On Exits 

The founders of Kickstarter make all investors commit to stay invested for 20 years. "No one is looking to exit"  

On Twitter

Facebook is who you used to know; Twitter is who you want to know


Simple is hard to make & hard to charge for