Many of you have now decided to start companies. That's great. We need young people with fresh ideas in the entrepreneurial ecosystem. I am counting on you to become the next great visionaries disrupting the real estate technology industry. Hopefully some of you will someday apply to MetaProp NYC.
Because so many of you are now entrepreneurs, I thought that I would share some basic principles with you. These principles seem clear and obvious to me as an elderly member of the "Jordan Catalano Generation" but for some reason many of you either don't share them, don't care about them, or fundamentally disagree with them.
Nonetheless, here are some things that you need to understand when you raise money from me as an angel investment in your business.
· I have just made an angel investment in your business. This is usually in the form of a convertible note, preferred stock, or a SAFE. Regardless of this structure, this now makes you a fiduciary. If you don't know what fiduciary duty is, please stop everything you are doing and look it up immediately! No links here; you have to use the Google machine yourself.
· I made an angel investment in your business. This is not a Thiel Fellowship grant. I did not just give you money to "find yourself", "save the world", "learn about startups" or "explore an intellectual curiosity". I invested a small amount of money in your business that I would like some day to turn into a large amount of money. If you happen to find yourself while building your business and making me money, that's awesome. If you want to only further your education, please do so on your own nickel.
· I just made an angel investment in your business. Here is a list of things that you are not allowed to do under any circumstances until you return a larger sum of money to me than I put in. All of these rules are based on my personal experiences with millennial entrepreneurs. No names but all experiences are 100% truthful.
o You are not allowed to purchase a fancy Audi Q7 because your team is having "mobility problems" getting around Silicon Valley. You can take the bus.
o You are not allowed to hire a personal chef for your team so they can eat better. They can eat Soylent or whatever else people in your generation eat.
o You are not allowed to fly business class.
o You are not allowed to stay at a five star hotel when you come to visit potential investors and clients in NYC. You can stay at a hostel.
o You are not allowed to say that you need a high salary to cover your rent. You don't have kids. Move back with your parents. I know it sucks but make it work. If your parents don't live nearby, you need to crash on someone's couch for a few months until you raise more money or actually God forbid start running a cash flow positive business.
o You are not allowed to tell me that you are crushing it when your company is two weeks away from becoming insolvent.
o You are not allowed to ignore me. When you are running out of money you need to pick up the phone and call me, immediately. I am not suggesting I can fix your problems but I might be able to help and it only takes you 10 minutes. You have nothing to lose.
o You are not allowed to tell me that you don't need my help because you have a "fantastic team of mentors and advisors" who are much better than me in every way. If your group of advisors is so good, why were they not able to prevent you from flushing your business down the toilet?
o You are not allowed after you have lit my money on fire to tell me how "excited" and "inspired" you are to be working at another company filled with "geniuses". Unless that other company is paying me a recruiting fee after hiring you or giving me equity, I really don't give a shit about how awesome your new job is. You sucked at your last job and lost my money.
o You are not allowed to tell me that my communication to you has been poor. I have no obligation whatsoever to communicate with you except for signing various documents and wiring money. You have an obligation to communicate with me.
o You are not allowed to hang up the phone when I call you to tell you that you ignored these rules and did a terrible job at running a company. Just because your other investors are too scared about reputational risk to yell at you doesn't mean you don't need to be yelled at. Don't expect to be coddled by everyone. Life is not all Care Bears and rainbows at Burning Man.
I will tolerate the fact that you have no idea about John and Lorena Bobbitt. I am even okay with the fact that you can't sing me any Stone Temple Pilots song. I feel sorry that you never had the privilege of seeing Tonya Harding ice skate or seeing Dylan date Brenda and Kelly simultaneously. However, I just unfortunately can't tolerate you ignoring the very simple rules and principles that I have outlined above.