Hyper Fund: $300K Investment & Media Boost for Founders

Introducing Hyper: A New Venture Fund Inspired by the Product Hunt Community

Hyper is a newly launched, $60 million early-stage investment fund established by Josh Buckley, the current CEO of Product Hunt, alongside Dustin Curtis, a writer, founder, and designer. The team includes two former Sequoia operators at its inception: Malika Cantor, serving as Partner and GM, and Ashton Brown, as Head of Program.

The Fund's Initial Phase: Applications Now Open

Today marks the official launch of Hyper, alongside the opening of applications for an initial cohort of 25 companies. Applications will be accepted for approximately four weeks each quarter, with the first deadline set for August 10th, 2021, at midnight PT. A second application window is scheduled to open in November 2021.

The fund operates as a traditional venture initiative, enhanced by its association with the Product Hunt community. Hyper will provide $300,000 in funding for a 5% equity stake in very early-stage companies across various sectors, following a standardized deal structure similar to Y-Combinator.

While accepting applicants globally, the fund acknowledges potential legal complexities regarding investments in certain countries.

Hyper's Unique Structure: A 'Sister Company' to Product Hunt

Hyper will function as a ‘sister company’ to Product Hunt. However, Product Hunt represents the first of many companies the team intends to own, build, and operate to deliver ‘direct value’ to its portfolio companies.

Discussions with Buckley, Curtis, and Cantor revealed their vision for differentiating Hyper within the increasingly service-oriented venture capital landscape.

The combination of concepts behind Hyper feels innovative, even if the individual components are not.

Advisors and Investors: A Diverse Network

A notable list of advisors, mentors, and investors includes Alexis Ohanian, Founder of Seven Seven Six; Serena Williams; Alfred Lin of Sequoia; Garry Tan of Initialized; Harry Stebbings; Jeffrey Katzenberg; Naval Ravikant; Owen van Natta; Ryan Hoover; Ryan Tedder of OneRepublic; and Sriram Krishnan of a16z.

This eclectic group reflects Hyper’s ambitions – a blend of media, venture capital, and product expertise is likely the optimal approach for building a media empire fueled by venture capital returns.

Two Core Business Lines

Hyper is establishing two distinct lines of business. The first is a portfolio of wholly-owned companies, including Product Hunt (which still has AngelList as a majority investor and Ravikant on its board), and other emerging media brands. The second component encompasses the Hyper fund portfolio and a founder program offering mentorship, bi-annual events, and future initiatives.

The founder program, designed to support companies funded by Hyper, is an eight-week program featuring guidance from individuals affiliated with firms like Andreessen Horowitz, AngelList, Sequoia Capital, the Twenty Minute VC Podcast, and Product Hunt, helping founders address ‘key challenges’. Some participants are investors in Hyper, though none of the funds themselves participated.

The program also provides office hours with industry experts, an exclusive Product Hunt launch event, and participation in a Public Hyper Demo Day and Investor Demo Day within a year of program completion.

Looking Ahead: Long-Term Vision and Differentiation

While current plans focus on small cohorts and a founder program, Hyper’s long-term ambitions involve establishing a unique differentiator beyond standard checks and partner access.

Distribution is key. It’s difficult to dispute the core assumption driving the Hyper team – capital is becoming increasingly commoditized. Often, investors’ value lies more in being a hindrance than a help. However, particularly at the early stages, a select few funds and firms offer substantial value beyond capital, such as assistance with hiring, sales introductions, or board members with relevant operational experience.

Buckley emphasizes that Hyper aims to provide distribution as the primary value proposition for nascent startups at the stages they target. Product Hunt serves as a prime example – an established launchpad to an audience of early adopters capable of providing an initial user base. Hyper itself is launching via a post on the platform.

The Hyper team articulates its core thesis as follows:

Over the past few months, Product Hunt has expanded its headcount by approximately 50% to enhance its capabilities as a distribution channel.

The team intends to develop additional media products, particularly those focused on areas of rapid growth and high interest, to both generate deal flow and showcase portfolio companies. Curtis highlights their commitment to creating genuine, functioning media companies, with startups funded by Hyper featured in clearly designated sections on these sites and platforms.

Importantly, the team assures that Product Hunt will remain a ‘neutral platform’ for product launches, with Hyper-backed companies receiving clearly marked placements on the site.

In the long term, the team plans to sustainably fund the media entities using the firm’s management fees and profits, which will be shared between investment partners and the media operations. Curtis suggests that alternative funding sources, such as debt or equity financing, could accelerate this process, given the delayed realization of carry in a traditional fund structure.

Significant discussion has surrounded the emergence of VC-backed media outlets as promotional platforms for tech optimism. However, much of this content is perceived as self-serving rather than genuine journalism. While Hyper’s planned media publications are still under development, there’s a compelling differentiating factor that could position it as a unique venture that bridges the worlds of editorial and investment.

The interaction between venture capital and media is a topic I’ve considered extensively, given my work and gestures towards the publication’s masthead our current conversation. Combining a media and investing apparatus isn’t novel – as TechCrunch readers are aware – but it presents complexities.

Key Elements for Success in Enthusiast Media

Successful enthusiast media, in my opinion, relies on a few core principles:

• Genuine Passion: Writers, editors, and business professionals must possess an intense curiosity and understanding of the subject matter. A complete commitment is essential, as they engage with an equally passionate audience that can detect any lack of authenticity.
• Trust and Candor: Building a reputation for trustworthiness or openness is crucial. This can be achieved through high-profile hires or leveraging existing reputations, but integrity is paramount.
• Relentless Momentum: Deeper engagement with a niche demands consistently insightful, well-researched content. The audience expects a level of granularity that surpasses other sources.

Adding the layer of openly declared vested interests in portfolio companies significantly increases the challenge. While not impossible, running a fund that supports a media arm is akin to ‘doing a really hard thing while also on fire.’

However, this doesn’t preclude Hyper from succeeding. Product Hunt serves as a model, fostering a community that attracts both operators, investors, and early adopters. Replicating this across various publications and events will be a significant undertaking.

I believe that focusing on distribution as a value add is a promising approach. As Buckley noted, capital is readily available. Offering the ability to reach the first 10, 20, or 30 thousand users is a compelling proposition. It works.

This, after all, is what we do at TechCrunch, though we don’t take an equity stake.

Article updated to reflect that media properties will launch at a later date.