Avoiding buzzwords and marketing-speak (feat. Thomas McInerney) | E2236

Quick Overview

Investor Thomas McInerney avoids founders who use buzzwords like "SAS enabled D" because trends change daily, preferring simple English explanations, and he identifies high valuation and lack of kindness to staff as major red flags when evaluating early-stage investments.

Key Points: McInerney gets turned off when founders use buzzwords, stating, "I want it in simple English," because outside trends are like fashion that changes daily. A key red flag is too high of an evaluation, which McInerney views as focusing on equity rather than ensuring the right people are on board. McInerney looks for technical founders with domain expertise who are generally young and possess a distinct point of view, citing his investment in Radiant Nuclear when nuclear energy was not in vogue. Ideal founders are humble yet smart, listening without defensiveness when asked hard questions, possessing a "crazy confidence to bet on yourself" combined with humility to take feedback. McInerney checks how founders treat staff, noting, "I see you know are they kind to the to the staff. Are they kind to the waiters?" He values founders who can articulate their customer acquisition strategy specifically, like one who intercepted people at a trade show coffee station to land customers, comparing them to truffle-hunting dogs. A major mistake McInerney regrets is not taking more risk, specifically overthinking his investment in Airbnb and wishing he had been more of an optimist regarding exponential returns like 1000x.

Context: Host Jason Calacanis interviews angel investor Thomas McInerney, who recently moved to Tokyo, on his third appearance on the show, which is broadcasting live from Tokyo where Calacanis is launching Founder University across three continents. The discussion centers on McInerney's investment philosophy, focusing on what he looks for in founders, common red flags, and how the angel investing landscape has evolved over the last decade since they both started, moving from a time when angel investing was new and founders were seen as misfits to the current high-status environment.