Episode Summary
Executive Summary: In this episode of Angel, Jason Calacanis interviews super angel Paul Judge, managing partner of Panoramic Ventures. They discuss the transformative impact of remote investing during the pandemic, the critical need for diversity in venture capital, Paul's role in SoftBank's $100 million Opportunity Fund, and practical advice for founders. The conversation also tackles predatory business coaches targeting underrepresented entrepreneurs and the shifting geography of startup hubs.
Main Topics: Remote Investing and Its Impact (Priority: 5/5): Paul and Jason discuss how the pandemic forced investors to make decisions without in-person meetings, leading to increased efficiency, wider deal flow, and reduced bias. They predict this shift is permanent. Diversity and Inclusion in Venture Capital (Priority: 5/5): The conversation covers the severe underrepresentation of minorities in VC funding, the need for dedicated funds like SoftBank's Opportunity Fund, and the economic case for investing in diverse founders. Paul Judge's Background and Current Funds (Priority: 4/5): Paul shares his journey from cybersecurity entrepreneur to investor, his work with Tech Square Labs and Startup Battle, and his current roles at Panoramic Ventures and the Opportunity Fund investment committee. Advice for First-Time Founders (Priority: 4/5): Paul emphasizes the importance of building a strong team and acquiring early customers before seeking investment. He advises founders to understand the investor's return model and focus on traction. Anti-Portfolio and Learning from Missed Opportunities (Priority: 3/5): Paul recounts missing the Calendly investment despite knowing the founder, highlighting the need to take more meetings and focus on what could go right rather than wrong. Predatory Business Coaches and Jason's Response (Priority: 4/5): Jason exposes fraudulent coaches targeting minorities and announces his plan to offer a $1 course to counter them, emphasizing the need for affordable, legitimate entrepreneurship education. The Future of Startup Hubs (Priority: 3/5): They discuss the decline of San Francisco and the rise of Miami, Austin, and Atlanta as more affordable and attractive locations for startups and investors.
Key Arguments: Remote investing has increased efficiency and reduced bias, allowing investors to see more deals and founders to get meetings more easily. Dedicated funds for underrepresented groups are necessary because traditional VC firms are slow to change; both approaches are needed. Founders should prioritize building a world-class team and getting early customers before pitching investors. Investors should actively seek out diverse founders because they bring unique insights and can generate superior returns. Predatory business coaches exploit aspiring entrepreneurs, especially minorities, by charging high fees for basic information available for free. The pandemic has permanently changed the geography of startups, with talent and capital spreading beyond Silicon Valley.
Data Points: Venture capital to Black founders: 1% - Compared to 13% of US population, highlighting a 10x deficit. SoftBank Opportunity Fund size: $100 million - Dedicated to Black, Latino, and Native American founders. Investments made without meeting founders in person: 20-25 - Paul Judge's experience in the last year during the pandemic. Calendly valuation: $3 billion - Missed investment opportunity for Paul; based in Atlanta. Greenlight valuation: $1.2 billion - Fintech for kids, based in Atlanta. Pendrop investment: $200 million - Cybersecurity company co-founded by Paul; 7-8 top 10 banks as customers. Expanse acquisition price: $600-800 million - Cybersecurity company acquired by Palo Alto Networks.
Pivotal Quotes: "We need a 10x solution, not a 10% solution." — Paul Judge: Discussing the magnitude of the diversity problem in venture capital. "Show me you're doing something and you just need more fuel for the fire." — Paul Judge: Advice to founders on what investors want to see: traction, not just ideas. "I'm going to charge $1... just to make a point." — Jason Calacanis: His plan to offer a low-cost entrepreneurship course to counter predatory coaches.
Implications: The pandemic has permanently democratized access to venture capital, making it more efficient and less biased. Diversity efforts are gaining momentum but require sustained action. Founders must focus on traction. The rise of predatory coaching underscores the need for affordable education. Startup hubs are shifting away from Silicon Valley, creating new opportunities.
About This Week in Startups
Jason Calacanis covers startups, tech, markets, media, and all the hottest topics in business and technology. He also interviews the world’s greatest founders, operators, investors, and innovators.