Morris Callaman: Investing in People Who Can Change the World

By Ed Martinez
August 2, 2011

In today’s economic climate, even the most experienced entrepreneurs can find it difficult convincing a potential investor to finance their endeavor, no matter how good their idea might be.

For financier and multimillionaire Morris Callaman, it’s not just about investing in an idea or a concept. He’ll urge a potential client to “Tell me about the business idea, the proposition, what you’re trying to do. Also, what is the societal benefit? Does that carry through? And if not, where is the disconnect?”

Callaman said if he finds someone who is trying to do something good in the world and their business model doesn’t mesh with that, he’ll tell them so.

Intrigued by his comments, I asked Callaman to elaborate on his approach to funding. As I learned more, I found his perspective to be refreshing and humbling.

“My passion, both through vocation and avocation, is to talk to people about what they really want,” he said. “People are always accessible to talk about who they are. I ask, ‘Where are you trying to go with your life?’”

“I’m here, these are my notions, these are my generalizations and assumptions, and this is my perception of reality. You wind up sorting all of that out and sizing up the measure of the human being. Business is just one flavor of life,” he added. “The last thing I want to be is a two-dimensional creature or proverbial businessman who just talks business.”

At the center of Callaman’s decision process is communication. He said talking is more about connecting with people and not so much about the exchange of information. “This is why I have difficulty with Twitter,” he admitted with a smile. “I don’t really see communicating as the transferring of information.”

A formal principal with Capgemini Ernst & Young, Callaman has been working with entrepreneurs and venture capitalists for years to build great companies. A triple alumnus of Arizona State University, he holds an engineering degree from the Fulton School of Engineering and an executive MBA from the Carey School of Business. Callaman also studied law while he was in Tokyo through Temple University’s Beasley School of Law and continued his business education with Harvard Business School in Boston. While in law school, Callaman underwent IQ testing that placed him in the “ultra genius” category.

When Callaman left Capgemini Ernst & Young and went out on his own, he founded a micro venture capital firm that offers seed capital to early-stage companies. He soon captured the spotlight in private practice when he helped fund the identity theft protection company Lifelock, which has been recognized as Arizona’s fastest-growing company.

Callaman, at the age of 33, became a principal at Capgemini Ernst & Young, a feat that was unprecedented in the company’s history.

“It was my first investment,” Callaman recalled. “They were in this tiny little office in a strip mall, and they were looking for investors. Because the company’s business model had a social benefit, I was pretty eager to get behind that,” he said. “They were all about trying to return the intellectual property rights of people’s behaviors back to themselves—in the same way e-mails are yours, what you tweet is yours, your Facebook status updates, etc.”

He spent an hour talking to the Lifelock team and then wrote them a check, on the spot.

The journey to success for Callaman was not an easy one. He talked openly about the dark experiences that plagued his early years. Born in 1969, Callaman said he was addicted to methamphetamines at birth—a result of his parents’ drug use. “It took me two years just to get normal health,” he confided. During his childhood, he went to 13 different schools in almost as many states, as he was shuffled among relatives, friends and foster homes. After eighth grade, he told himself that was enough and “packed a sack and a snuck out the window.”

Callaman ran away and spent most of his teenage years on the streets. As he looked back on those years, he said he never really thought he’d live to see this day.

Somewhere along the way, Callaman made a deal with himself that he would never need another human being. “That combination of thinking that I would not be alive and insisting that I would never need anybody really put me in a strange place that lasted for a couple of decades,” he shared.

As a homeless teenager, Callaman faced experiences the average person can’t begin to imagine. “I remember sleeping at Acoma Park and in the alleys,” he said. He started knocking on neighborhood doors, asking for food.

“I wound up doing odd jobs, which actually led to getting a steady paycheck from a construction company—$5 an hour, $10,000 a year. I’m thinking, my problems are solved.” Callaman described the way he felt at the time as “kind of like that line from Fiddler on the Roof. I was so happy, I didn’t realize how miserable I was.” He had cash in his pocket and a roof over his head at night—he was sleeping at the job site.

So when did Callaman’s life begin to change? “There was a forklift driver, and he took to me like I was his son,” Callaman told me. “Every morning, Russ would come and find me, and we’d do the job. When we finished, he’d go home for a little while, but he’d come back to the west side where I was and drive me around the Valley to other job sites.”

For Callaman, it was “a fascinating character study. This guy was, in his own life, hanging on by a thread,” he explained. For whatever reason, perhaps out of the goodness of his heart, Russ chose to help him. “I would have just given up on my fellow human being,” Callaman said frankly.

Inspired by his friend’s compassion and, as he describes it, Russ’ “humanity,” Callaman felt there had to be something more for him. So, he obtained his GED and began a nine-year effort to earn his degree from Arizona State University, which led to a path of incredible success and where he is today—an investor with a heart.

morris_callaman_3.jpgBesides Lifelock, Callaman has invested in many high-tech companies, including his most recent project, RiboMed Biotechnologies Inc., a San Diego-based biomarker discovery and diagnostics company.

RiboMed has developed a signal amplification technology called Abscription, which is used for noninvasive diagnostics and prognostic tests for disease—and drug-associated biomarkers.

Callaman is also very interested in technology companies that offer services. “The ability to use Gmail didn’t exist five years ago,” he pointed out. “Those opportunities are highly investable, and they will continue to be.”

Another area Callaman believes will offer investment opportunities is energy efficiency. “As we begin to move forward, the ability to have distributed power generation becomes really big. The microgrid [is] a fabulous concept,” he said enthusiastically. More and more, privately owned and small-scale distributed power could deliver energy more efficiently in smaller geographical areas.

That concept is gaining momentum, but the idea of distributed power, or the microgrid, poses a threat to utility companies, which for more than a century have relied on a grow-and-build business model. It’s no wonder some of the utility companies are fighting microgrids. But shifts in government policy, new technology and consumer demand for energy could eventually make the grow-and-build business model a thing of the past. Perhaps that’s why Callaman is interested in distributed power—he sees it as a real benefit to humanity.

Callaman’s life has no doubt been difficult, but surprisingly, he does not describe his childhood as a sad experience. “I wasn’t born in the Third World,” he conceded. “I wasn’t suffering machete attacks or some of the gruesome things you hear about in places like Uganda. But, it was hard.”

By the time our conversation concluded, I couldn’t help but feel a sense of admiration for Callaman—not just for his accomplishments, or for enduring the hardships he encountered as young man—but also for his ability to “read” people in general, to quickly grasp the character of an individual, to see how someone’s vision might benefit society and to determine whether a venture might translate into a successful business model. Callaman’s passion for helping others comes through clearly and will undoubtedly continue to bring him much success.

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