What one investor saw in Uber when it was valued at only $5 million
Uber, the ride-hailing company, could go public next year in an IPO valuing it at $120 billion, according to WSJ
Jason Calacanis is the founder of the Angel University, former Sequoia “scout,” an early backer of four unicorns, and a best-selling author. Parts of this article takes quotes from his book “Angel: how to invest in technology startups.” Jason will be in Hong Kong to take part in Startup Impact Summit on January 25th, 2019, get tickets today.
One angel investor, Jason Calacanis, backed the company when it was valued at $5 million dollars. Jason is now one of the most renowned investors in Silicon Valley. He has invested in over 150 companies to-date, including four multi-billion dollar “unicorns.” Jason was not born into a wealthy family nor attended Ivy League schools, but he always has a good hunch for potentially exceptional startups.
“I invested $25K in Uber when it was worth around $5 million. When I invested, Uber was operating in one city and they only had a couple of Lincoln Town Cars signed up.
I wasn’t clear if the business could scale or make money, but I knew the founder was exceptionally driven and I personally loved the product. In my mind, Uber was an exceptional product for about 10% of the population who already used car services.
That was enough evidence for me to place a bet.”
Early stage companies generally do not have the financial track record or consistent usage metrics of established companies such as Microsoft or Google. A company with all the metrics of a mature company would already be public, or does not need angel capital. Jason argues that angel investors should instead focus on honing their skills in identifying great founders and seek out startups with product/market fit.
“As you go through your angel investing life, take some time to evaluation the person and their motivations. Ask yourself a simple question: “Would I buy stock in this person if I could?” If you wouldn’t buy stock in a founder, you shouldn’t buy stock in their company.”
“Product/market fit means the product the founder has built, whether it’s Uber’s ride-sharing app or Instagram’s photo filters, has found a group that is delighted by it. If a large number of folks find a product delightful, there is a solid — but not guaranteed — chance that the founder can then solve the next challenges.”
