Angel Investor
Shane has backed 50+ startups, including FigureAI, SandboxAQ, Impossible Foods, Graphcore, Flexport, Kraken, Hyperice, Athletic Greens, CG Oncology, and more.
It's been a windy road for me. I studied computer science and I went to NYU in the mid nineties. It was a pretty early time for that. There was a lot of opportunity. My roommate was working at Goldman Sachs right during the dot com boom. And, he said, we could become bajillionaires. You know how to code. I can raise money. We live in New York City. Let's make this happen. And some VCs at the time thought it was a good idea to give 22 year olds that have no experience doing anything a bunch of money to do essentially what's Microsoft 365 right now. We were way too early, dot com bubble bursts. We couldn't get the rest of the money from the venture, and we failed. I ended up building two more bootstrap companies being really strappy. I really had no money. I had just like my credit card and it was already kind of almost maxed out of that. But I knew how to program and it's pretty cheap to program. I built two B2B SaaS businesses in the course of the next 18 years. And then had an exit there from a strategic in 2013 and decided I wanted to learn how to not suck at investing. It's almost like being a founder and starting over again. I do all different kinds of investing from real estate to private equity. But my passion really is in venture. I love dealing with founders and I'm agnostic to industry.
The more you do as an investor, the more you screw shit up, just to be honest. Founders are emotionally driven. They will run through a brick wall and everything like that. And you have to remove your emotion from investing. As an investor, being a founder is being able to do diligence and technically understand what a lot of different startups are doing from the most complicated, even crypto ones, and even quantum ones, to also being able to gauge the personality of a founder to understand if they have what it takes to get punched in the face and the stomach and kicked and bruised and thrown on the floor and then get up and do it again. I've been so far pretty good at being able to identify because I've been there and done it myself.
I don't have a strict formula. It is formulaic in terms of how much I invest and what kind of allocation I have to things. There is a good part of instinct for me. Everything could be perfect for a company and if my gut is no good, I just won't do it either. It's almost like playing poker. You're trying to make a decision with incomplete information. And so you can do the best that you can with the information that you that you have and you try and take bets that have higher probabilities of success, but just because it has a high probability of success does not mean that it'll win.
I get like, here's our deck. Can you give me some feedback? Would you give me some advice? Well, what do you want advice on? I'm not going to read your deck and then redo your deck for you. I'm not gonna try a product and do a whole demo and then give you a list of things that I think. If you have an ask, it should be a very specific ask. You should say, we are concerned about this part of our business, the TAM, or the customers that we're going after, or two or three things that are really specific and it seems like you've actually thought through. And you're not blanket emailing or texting someone the same thing. You're really having a very specific ask that's tailored to the person that you're emailing and asking for advice. Anything that you can do that can be as concise and impactful as possible to bring that person's attention and make yourself stick out as to the hundreds of other emails that they get that they would want to spend their time doing it because you have a finite amount of time. No, I can't get to everyone. You have to pick and choose. And so you want to increase your probabilities that you'll be picked.
I particularly would like to see a later stage company, and I'd rather de risk that way. If it's really cutting edge type stuff, I'm okay going really early. Or if it's a founder that has had multiple exits and can show a clear path to what they're trying to do, that early stage stuff works for me. But consumer tech is so competitive, right? And the rate of failure is so high that there are a lot of really early stage consumer tech venture capitalists that know how to assess an opportunity much better than I do in those early stages.
The atypical way is when you do a really good job with a founder and they recommend you to their friends who are also awesome founders. It's almost like a flywheel effect, right? The other way is, you invest in other funds, and you get to become friends with fund managers who see deal flow that you don't see. Even if you don't have a lot to invest, maybe invest a little bit and get to know them, you add value to them, you show them your deal flow, and they'll start showing you their deal flow and recommending you. It's a very symbiotic ecosystem. If you're a bad actor, you get called out immediately and you can lose your reputation. A lot of people want to deal with me because I'll tell you straight up no, immediately. Or if I say, yes, you can expect the wire to get into your bank accounts. I'm not going to bullshit you. I also put a lot of stuff out there on LinkedIn. I get a lot of inbound through LinkedIn. It's hard to sift through what's good and what's bad. They're in the 1 and 100. I had a cold email sent to me, maybe 3 years ago, and I told the founder that it was way too early, but I really liked her. And then a year later, when she was ready for the seed, we ended up investing their entire seed round. So cold emailing does work sometimes.
I think humanoid robots is a game changer. It's going to change a lot of the way that the world works. Especially when it takes over physical labor, it's going to take over a lot of the jobs that no one wants to do anymore. Micro robotics and medicine excites me. There's a company called PillBot that I just recently backed where it's a pill that you swallow and it, and it does an upper endoscopy for you. Drink some water with it, and it swims around your stomach and it does an upper endoscopy, and then, the next day you poop it out and it's done. Those are the things that I'm really excited about. The best is probably yet to come at this point.
You really want to surround yourself as much as you can, not just for your business purposes, but for personal purposes, people who are orders of magnitude doing more and better than you because that really inspires you. That's worth more than anything else. It's also hard to figure out how to add value yourself to those people. So you have to really think about it because you have to add value to them too, right? If you invest in those types of relationships, invest in seeking out those relationships and building those relationships, I think that has always been a really great guide for me.
The minute I read autonomous vehicle space, my first reaction is, why would I do you when I can buy Tesla? They've been around for longer and it's pretty tried and true. That's the first question that you have to answer for an investor. What is different. Maybe there's something about you that makes it different, or the product, or some patent that you have, or idea that you have, or something like that. If you want to stick out, the 1st thing you have to realize is that there are a lot of other options out there.
Go to as many in person events as you can. You better have a two sentence pitch that gets there. If you can't sum up exactly what the hell it is that you do and why you're different in two sentences, forget about it. First of all, you should be doing that anyway. if you don't know that, as a founder, as a fundamental thing, if you can't explain in two, max three sentences exactly what it is that you do and why you do it and why, what's different, then you have a problem. Forget about your investors, your customers. If you can't explain to your customers in 2 sentences on your website exactly what you do, no one's going to read the paragraphs of your website. Telling you from my own experience, I go to a lot of events in person and when a founder comes up to me and they in 2 sentences, they smile, they have confidence, they tell me what they're doing and they know their business inside out, I can tell I will give that person a shot. You have to understand it's your job to pitch. It's the VC's job to filter out the good from the bad. And it doesn't mean that you're bad. It just means that you haven't refined it.
Never make assumptions and really not to take anything personally. Early startup founders, these are things that you're going to constantly have to battle with, and also conflating yourself with your startup is usually what happens. You are not your startup. The startup is something that you make. But it's not you. And if you can detach yourself from that, you can have a much better experience in your startup. And if you have a much better experience in your startup, it works much better for your investors. It works much better for your employees. It works better for you internally as a founder. Everyone wants everything to be quick. I didn't have an exit until 10 years into doing my first one, and I failed after two and a half years of my first one. You have to build tools around yourself where you won't break and you will continue to go forward and use those tools.
Don't ever be in a personal relationship with your co CEO. Maybe it could be your best friend, but I'm talking about a real relationship, a physical relationship. That's a surefire way to ruin your relationship. Some people do that, they go into business with their girlfriend, boyfriend, it didn't work for me. It caused a lot of conflict. Depending on what your personality is, I did better just seeing the one in charge. There's a lot of resentment that happens and a lot of friction that can happen. The ideal thing is that 1 person is making up for the lack of skills that the other person has. And that they equally work as hard.
I don't. I happen to care about those things personally. And I guess I'm biased towards them a little bit. But I won't invest in a company just because it has an environmental impact. It's a nice bonus, don't get me wrong. That's a problem that a lot of funds had, their performances didn't really do well because they forgot the 1st and foremost rule of capitalism is you're doing it to make money.
You should look at where the funds are flowing to. I'm not saying for you to do something that you don't like, or not to follow your passion. But it'll have an easier time if you pick an industry where VCs and investors are going towards, which is obviously AI and these other hot industries. The key is not to be phony about it because you won't pass the smell test. You have to be genuine about it, and you have to genuinely love it and genuinely want to do it. If you can try and find it, in what people are investing in, it'll just be an easier time for you. That's one advice. You should go to a major metropolitan area, either SF, LA, or New York. This is where I'm seeing all the best founders going, the return to office is real. Most people are realizing that having a remote team just cannot create the magic that you need, especially for a startup.
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