Paige Craig is an angel who loves to curse.
The 40-year-old former Marine might have a penchant for partying and swearing, but he’s also one of the county’s most prolific angel investors who has gone on to form a seed-stage venture capital firm.
Craig launched Venice’s Arena Ventures in January along with Jeffrey Lo, a former managing director at New York’s Fortress Investment Group, and has raised more than $27 million from 35 investors, according to a May 6 filing with the Securities and Exchange Commission.
Now working from Craig’s Venice living room, Arena will take office space in a West Hollywood office June 1, formalizing its position as an investor in mobile-video streaming app Meerkat, online denim retailer Dstld and digital interior design marketplace Laurel & Wolf, among several other startups. Angel investors put their own money in early stage companies while venture capitalists invest other people’s money as part of a firm.
Craig moved to Venice in 2008, about a year after selling his stake in Lincoln Group, a military contractor in Iraq and other Middle Eastern countries that was paid to generate pro-American news coverage in Arab media outlets.
Since then, Craig has invested between $50,000 and $100,000 in more than 100 early stage startups. Quite often, he’s one of the initial backers, if not the very first, to write a check.
“That’s the riskiest position in the world to be in,” he explained, since most startups fail. About a dozen of the companies in his portfolio have gone under so far, and he expects others will as well.
Failure is not unfamiliar to Craig.
In October 2010, he founded online platform BetterWorks that allowed companies to buy perks for their employees. Two years later, the company had gained little traction and folded.
“I built something that people didn’t actually want,” he said.
Risk, reward
While most startups struggle, the few that hit it big can make everything worthwhile for angel investors such as Craig.
Take San Francisco’s Wish, a mobile shopping platform Craig wrote a $110,000 check to during its seed round in 2010. The company is now reported to be raising a Series C round at a $3 billion valuation. Other bets that have paid off for him include ridesharing service Lyft, now valued at $2.5 billion, and social media analytics firm Klout, which was acquired by Lithium Technologies in March 2014 for $200 million.
“We drank shots of tequila and beers while talking about Klout in the early days,” Craig recalled of his initial meetings with company co-founder and Chief Executive Joe Fernandez. “That was a very large payoff for us.”
After investing together in a slew of companies as angels for more than two years, Craig and Lo decided to take their partnership to the next level and invest other people’s money.
“In December, we said let’s just do what we’ve been doing at scale,” said Craig.
Another notable aspect of Arena’s model is its one-of-a-kind partnership with AngelList, a crowdfunding platform that lets accredited investors fund tech companies.
Each time Arena invests in a startup, part of the capital comes from a syndicate of investors on AngelList. The amount of capital from Arena is fixed across every deal, but the investment from the AngelList pool varies a bit each time.
While this arrangement gives ordinary investors access to deal flow typically reserved for VCs, there is also an incentive for Arena. If the syndicate backers make a profit through a follow-up investment or exit in the company, Arena takes a 20 percent cut of that collective pot.
“If we don’t make money for people,” Craig said, “We get paid nothing.”
Life of party
Craig’s investment philosophy is that decisions should be based as much on the personal attributes of founders as anything else.
“Where a lot investors look at finances,” he said, “Jeff and I both believe you have to spend time focusing on the people.”
He freely acknowledges that one of his favorite ways to get to know founders is by partying with them. In fact, he meets many aspiring entrepreneurs at events he throws at his home in Venice. Sometimes the soirees are intimate 10-person dinners, but sometimes things get a little crazier.
“I also throw 400-person ragers,” Craig acknowledged, noting he also owns houses in San Francisco; Las Vegas; and Washington, D.C., that he uses as networking venues.
“I need strategies that let me understand people,” he said. “Going out, partying and making people open up, that’s what I need to do to be a great early stage investor.”
Bryce Maddock, chief executive of Santa Monica outsourcing firm TaskUs, has been friends with Craig for about five years and said Craig’s reputation as an adventure-loving wild child is deserved, noting the two have partied into the wee hours on more than one occasion.
One time, Maddock said, Craig asked him and several other friends if they wanted to participate in war games with a group of Navy Seals on Catalina.
But, Maddock said, that type of stuff is all part of Craig’s master plan.
“He’s creating this myth about himself,” he said of the man whose job once required him to disseminate stories for a living. “He’s super intellectual but he masks it with this machismo.”
All that socializing pays off for entrepreneurs after Craig invests in their company, said Laurel & Wolf founder and Chief Executive Leura Fine.
Shortly after cutting her a $100,000 check last year, Craig introduced her to 65 other potential investors in her startup’s seed round, she said.
“If Paige is backing you, there must be something good here,” Fine said many of those angels told her. In addition, his network came in handy later on when her company began staffing up.
What Fine values most about Craig, however, is not all the people he knows, but rather his ability to think outside the box when it comes to solving all manner of company problems, whether they’re related to business development, marketing or the product itself.
With Arena’s rapidly growing roster adding to his already massive portfolio, Craig spends much of the day on the phone trying to put out fires.
“I live for that shit,” said the former Marine.
