Silicon Valley is not just a location, it’s a state of mind, according to Shervin Pishevar. Sharing knowledge is an important part of how Pishevar, an American angel investor, invests in start-ups and successfully grows those investments.
In an interview with Jason Calacanis of This Week in Startups, Pishevar described his passion for new businesses and highlighted some of the ways that entrepreneurs are changing lives as they change economies.
With the Silicon Valley brand identification for startups that excel with new technology, Pishevar is the co-founder of Silicon Foundry. Through a curated flow of targeted insights, deal sourcing, senior personal introductions and private events, Silicon Foundry connects select corporations with top startups and emerging technologies in order to advance members’ innovation objectives. Silicon Foundry is not limited to any single portfolio, network or region, but instead effectively serves as a ‘meta search engine’ across all of the major global technology ecosystems.
Pishevar told Calacanis during the interview that as an investor, he felt blessed to be alive in a time where more people than ever before have the opportunity to change lives through the businesses they create.
“Fear is finite, hope is infinite, and that applies to everything in life, including entrepreneurship,” Pishevar said. Acknowledging that many parts of the world are still struggling economically, Pishevar said that start-ups today have unique and powerful tools in mobile technology and social media connections that supply a competitive edge; they are able to start and scale businesses effectively and very rapidly. Pishevar related this technology advantage to a trip that he took to Egypt with actor Sean Penn, when Calacanis pointed out the dangers of travel in Egypt. Pishevar responded that the advantages of new technology and new business were more powerful than any conventional weapons of conflict.
Travel experiences have often given him a new perspective. In 2016, Shervin was selected as an Ellis Island Medal of Honor award winner and was a member of the UN Foundation’s Global Entrepreneurs Council, serving several state department delegations to the Middle East and Russia.
“Political freedom should be paired with economic freedom,” Pishevar said, adding that the American Revolution was a prime example of that concept. He didn’t mention the Boston tea party specifically, but the idea of having representation in government with the freedom to build and pursue dreams was the direction of his advice.
“We need to let entrepreneurship blossom,” Pishevar said. “It is a good thing for the world.”
The interview with Calacanis included a brief side story about how Pishevar and Calacanis met for the first time at a business networking event, and how the two didn’t hit it off right away.
Calacanis and his work with This Week in Startupstakes pride in interviewing guest experts and including the best, worst, most outrageous and interesting stories from the world of entrepreneurship. Calacanis, a podcasting pioneer, along with his trademark blunt style, prompted Pishevar to ask Calacanis to “show some respect.” Calacanis responded that he felt Pishevar had come to the event “unprepared” but later admitted that there had been a misunderstanding. Pishevar had planned to speak from the heart with confidence and received excellent response from attendees.
“They loved you at that event,” Calacanis said.
When Calacanis asked Pishevar if entrepreneurship was a religious experience, Pishevar clarified his perspective and said it was for him “a movement and a philosophy.”
“For me, there is something deeply beautiful about (entrepreneurs) throwing everything away and being willing to sacrifice to make (startups) happen,” he said. “Our generation is moved by more than money.”
Pishevar then described how he had started a program called 1% of Nothing, his innovative project that encourages entrepreneurs to donate 1% of their equity to charities. Flipping the idea that startups and businesses should care for themselves before they care for the needy, Shervin partnered with Matt Galligan to promote the practice, with Galligan himself donating 1% of Socialthing, his company, to the Community Foundation of Boulder. The thought process for 1% was that a small amount of equity could lead to vast, global change.
“You see the causes you believe in as a co-partner,” Pishevar said.
Pishevar said he also gave a chunk of stock to a charity called Invisible Children, and encouraged over 100 entrepreneurs to do the same. Invisible Children is a global organization that protects children in war-torn countries. The primary goal of the charity was to end the long, devastating war in Africa, an ongoing conflict run by Joseph Kony and his infamous Lord’s Resistance army. Since its inception, the organization’s goals have broadened, and the mission is now to keep children and families safe and secure in countries throughout Africa. As part of Invisible Children’s mission, Shervin traveled to Libya, went to Egypt with Sean Penn, and served as a leading voice in Silicon Valley supporting justice for the young. He held a popular talk during The Fourth Estate, an Invisible Children conference.
Pishevar said his investments in entrepreneurs were certainly about wealth, but it was a different kind of wealth, with a much broader definition.
“It should be wealth creation, but wealth in every sense of the word, enriching our lives,” Pishevar said. “Life should be about the collection of experiences, not materials. A lot of interesting businesses are being built around that now, with more meaning.”
When asked about making sacrifices to make new companies successful, Pishevar said that challenging experiences were often transforming.
“The most enriching are sometimes the most painful experiences,” Pishevar said, adding that new business leaders often end up sleeping “under the table” or on the office floor from long nights working hard, but that those memories are often recalled as positive.
Even businesses that start out struggling can turn things around with careful insight, he said, and cited the example of Fab.com, which failed as a social networking platform for gay men but succeeded as a site for design innovation.
When asked about the toughest moments of his career so far, Pishevar told the story of his first startup business, WebOs, when he was at Berkeley. Knowing he needed help, Pishevar reached out to Jamie Dimon.
Dimon is chairman and CEO of JPMorgan Chase, the largest of the big four American banks, and previously served on the board of directors of the Federal Reserve Bank of New York.
Pishevar said he was amazed that Dimon answered, and Pishevar pitched him on the phone. Dimon invited him to New York, and became one of Pishevar’s early investors.
Pishevar also said that at that time his first company was struggling, his marriage also ended, so he spent many hours working on the new business ideas as a single Dad.
“I did not want to give up on my dream of doing it right,” he said. “That was a lot to face. I was 27 years old. You get a lot thicker skin. Things don’t stress you out so much. I wasn’t going to give up on my kids.”
Pishevar, who was born in Iran, credits his family with helping him maintain a positive attitude in the face of challenges.
“If you meet my Mom, you’ll see she is so positive, such a survivor,” he said. “When we got to this country, my Dad drove a taxi. We pursued The American Dream; we worked hard.”
In describing what he sees as what it is like to be working in America, Pishevar said again that his family continues to inspire him. He describes his Mother as “very happy.”
“My positivity comes from her,” he said. “What America stands for is about positivity, about facing any challenge.”
Pishevar describes American work ethics as about “rolling up your sleeves” and said he believes that many people still have that mind set when they start companies.
“This whole entrepreneurship movement is what that is,” he said. “We should be mindful of leading with our hearts, and not the cynical side. I am excited about our generation taking the lead.”
When asked about politics, Pishevar said he encourages young people to get involved, to vote, and even run for political office.
“We all have a chance to contribute,” he said. “You can be president at age 35.”
With regard for his career as an entrepreneur vs. that of being a venture capitalist, Pishevar said he was interested in how his life would have the most impact, and venture capital was his dream job.
He has led the way for others by following his passion. Pishevar was ranked in The Midas List of top 100 venture capitalists in 2014, 2015 and 2016. The Midas List is a data-driven ranking of the world’s 100 top venture capitalists based on all exits (IPOs or acquisitions) above $200 million and private companies valued at $400 million or more over the last five years. For the list, Forbes considers an investor’s involvement in each deal and places a premium on newer exits and returns that reflect bigger and bolder bets. Each year, Forbes reviews submissions for the list from hundreds of partners and dozens of firms.
Pishevar’s biography identifies him as an angel investor. An angel investor (also known as a business angel, informal investor, angel funder, private investor, or seed investor) is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.
Angel investments typically need and expect a very high return on investment, and therefore professionals like Pishevar seek those investments that have the potential to return at least ten or more times their original investment within five years, usually through a defined exit strategy such as plans for an initial public offering or an acquisition.
Experts say current best practices suggest that angel investors perform better when setting their sights even higher, looking for companies that will have at least the potential to provide a 20x to 30x return over a five- to seven-year holding period. After taking into account the need to cover failed investments and the multi-year holding time for even the successful ones, the actual effective internal rate of return for a typical successful portfolio of angel investments is typically as low as 20 to 30 percent.
With a keen eye for business ideas and the markets they serve, Pishevar’s track record greatly exceeds this average return. He averages over 73x on his investments.
“I am happy investing in great entrepreneurs,” Pishevar said. “I have lots of energy and this is my passion. Coaching and advising and backing them to help them reach their dreams.”
In the interview Pishevar did with This Week In StartUps, Jason Calacanis asked, “When you’re talking to an entrepreneur for the first time, how long does it take you to know whether or not you want to invest in them?”
Pishevar answered that he invested in people, and that people were the greatest asset in the company.
“It’s all about the people,” Pishevar said. “You can tell quickly. In minutes you can tell there’s something special, if they are passionate, and if they are actually making sense. You still have to do a lot of due diligence, and you have to invest well. That’s a lot of responsibility, but yes, you can tell very quickly.”
Calacanis mentioned reading a story in The Wall Street Journal about there being too many business incubators, and asked Pishevar whether he agreed.
“Incubators have a place and purpose,” Pishevar said, and added that business incubators were about creating a filter for excellence.
“It’s not the end all and be all,” he said. “All of the greatest companies are not going to come out of incubators. Facebook came out of a dorm room. They can come from anywhere. AOL was out of Virginia. I look at New York and LA. I look worldwide.”
Pishevar said he thought that business incubators were “the new university,” and a new way of going to college.
“That’s how I see them,” Pishevar said. “They are the new Ivy league and the new Harvard. Get educated to learn and network. It’s a training process. Get up and dust yourself off and get going. Never give up.”
Pishevar continues to research and invest in innovative companies in a wide range of categories.
“Surround yourself with value creators,” he says. “Only work with people who share this with you.”
For more information on Shervin Pishevar, visit Pishevar.com.
About Shervin Pishevar
Pishevar was born in Tehran, Iran, the son of a television and radio executive. After his family moved to the United States, Pishevar studied cellular biology at the University of California Berkeley, and as a senior, he founded and served as Editor-in-Chief of Berkeley Scientific, the first peer-reviewed undergraduate research journal in the United States.
Forbes magazine ranked Shervin #93 on 2017’s The Midas List for the top 100 venture investors. He has been ranked in the Midas List top 100 venture capitalists list in 2014, 2015, 2016 and 2017.
Pishevar has invested many companies including Aardvark, CabanaApp (sold to Twitter), Dollar Shave Club (sold to Unilever), Cherry (sold to Lyft), Gowalla, Milo (sold to eBay), Kissmetrics, Klout, LikeALittle, RapGenius, Rapportive (sold to Linkedin), Rixty, SolveMedia, Taskrabbit, Tello, Postmates, Votizen and Qwiki.
He was a Managing Director at Menlo Ventures, led key early investments, and started their seed investment program called the Menlo Talent Fund.
Pishevar founded and operated technology-enabled companies, including Hyperloop One, Webs.com (as founding President and COO) which was acquired by VistaPrint, SGN (now JamCity, a leading mobile game developer), WebOS and HyperOffice.
Pishevar is a former member of the Board of Directors of Uber.
Throughout his career, Pishevar has supported many charities including Build.org and the Malala Fund, which provides funding to help girls in developing nations go to school and reach their full potential. He has traveled to Africa as a volunteer with Invisible Children and served with charity: water, an organization that works to provide clean water to developing nations. Pishevar co-founded the organization 1% of Nothing with Matt Galligan, Michael Birch and Scott Harrison in 2011, with the goal of connecting startups and their founders to various causes. Startup companies participate by pledging one percent of equity to charity.
Awards and Honors
Pishevar was a keynote speaker at President Obama’s Summit on Entrepreneurship in Algeria, and was a member of the Technology, Media and Telecommunications policy working group. He helped to create the United Nation’s first mobile application. In 2012, he was chosen by the United States government as an “Outstanding American by Choice,” an award which recognizes the achievements of naturalized Americans. He served on the J. William Fulbright Foreign Scholarship Board and in 2013, he created the Cyrus Prize (named after Cyrus the Great), a $100,000 grant for Iranian inventors.