I’m a full-time angel, plus I’m a procrastinator and an information consumer. So, I spend a LOT of time on the cruising the net, and find a lot of great content. But a video from Foundation, Kevin Rose‘s new venture, was so insightful and full of entertaining stories that I had to stop in my tracks and immediately zip off this post saying just how great it is. ”Create Value Before Asking for Value Back” is a theme brought up by superangel Chris Sacca around 15-16 minutes into his interview by Kevin, and it is at the heart of how Chris created his incredible and meteoric rise from nearly bankrupt, unemployed lawyer to Googler to one of the top superangels. Chris relays that “what really built a …business opportunity for me was just being helpful.”
Kevin too has his own story of how he got into Square, Jack Dorsey‘s incredibly hot follow-up to Twitter. Kevin loved the product, but the investment round was spoken for many times in advance–who wouldn’t want to back Jack? Nevertheless, as a fan, Kevin decided to “do a mitzvah” and help Square by producing a slick, professional HD video demonstrating how the product worked when the company had nothing of the sort available. While he was hoping perhaps to get noticed and have good karma come back to him, there were no strings attached to his efforts. Lo and behold, Jack then cleared some room for Kevin to invest in the seed round, and as we now know, those shares’ value has shot up a zillion-fold. Everybody wins. That is a classic example of how not just current angels, but anyone, can add value to a startup, shareholders, themselves and the world. When you look at Kevin’s track record, while Digg and TechTV made him famous, it’s those angel investments at Square, Twitter, Foursquare, Facebook, etc. that sets him apart from us mortal investors. And the Square story is prima facie evidence that you can do very well by doing good.
This meme, which has a dark side corollary as well (“what goes around, comes around”), shows that it is just good business to be decent. It’s very apparent to me that the best deals that I see are the ones not that show up via the angel group circuit, but opportunities that come across my door specifically in return for past friendship or favors, be the source mentees, fellow investors, attorneys, or some other connection. The good karma reward is equally true for folks looking for jobs, investors, or customers (with the last case being proven by the success of Zappos.) Angels–when someone comes to you with a deal that doesn’t work for you, gain some karma points: even if you’re not going to write a check, try to at least respond to the emails, offer some constructive criticism, suggest a lead, or at the least leave the entrepreneur with a smile and encouragement.
Back to Foundat.io/n (Great show, why such pretentious spelling!? I blame del.icio.us): I haven’t seen the 6 other previous shows in the series, but I can’t wait. Kevin, like Jason Calacanis, Sequoia’s Mike Moritz, the brilliant Esther Dyson, and several successful hedge fund managers, started out covering tech or startups as a journalist or analyst well before becoming an investor. It turns out that the combination of networking, sector knowledge, and comparative analysis is pretty much an ideal background for angel investing. Add to this mix the ability to gracefully do favors for others, and you’ve got an ideal recipe for successful early stage investing. And when you, like Chris Sacca, can create value before asking for value back, it turns out you’re on the way to universal love, wealth, and the ability to do good–sounds like heaven to me. Pay it forward.
But first, check out that Foundat.io/n interview with Chris Sacca.