so, you want to democratize venture capital

The Paradox of "Democratization" in Tech and a New Approach to Funding

A venture capitalist once shared a candid observation: the term “democratization” within tech marketing often signals a potential issue. The principle of democracy, in many instances, ironically tends to favor participants who are white and male. While I typically avoid beginning with such a sobering thought, I believe this reality underscores the potential significance of a recently launched tool developed by tech entrepreneurs Lolita and Josh Taub.

Introducing a GP-LP Matching Platform

The Taubs have created a platform designed to connect general partners (GPs) and limited partners (LPs), specifically to facilitate access to capital for underrepresented fund managers. This innovative tool directly links those seeking funding – the GPs – with potential investors – the LPs. This initiative builds upon their earlier success with a founder-investor matching tool.

To date, the initial tool has facilitated over 1,000 introductions, reportedly resulting in 27 investments totaling close to $4 million in capital.

A Timely Development

While the concept of matching LPs and GPs is straightforward, and the experiment itself is relatively contained in scope, its feasibility is recent. The rise of remote investing, particularly through platforms like Zoom, has fundamentally altered how individuals connect and evaluate investment opportunities. I view this GP-LP tool as a crucial indicator of how emerging fund managers can broaden their fundraising options.

Further Reading on Fundraising Strategies

• Understanding the Nuances of Securing Initial Funding
• Insights from Vise CEO Samir Vasavada and Sequoia’s Shaun Maguire on Effective Pitching
• Recognizing When to Decline Investment Offers from Venture Capitalists

Focus on Underrepresented Groups

A key differentiator of this tool is its exclusive focus on supporting underrepresented individuals. This includes those who deviate from the conventional Silicon Valley profile, such as women, LGBTQ+ individuals, graduates of non-Ivy League schools (or those with employment histories outside of elite companies), and individuals without significant existing wealth. While platforms like AngelList’s rolling fund offer benefits, ongoing public fundraising often disproportionately advantages those with established networks.

Consider this: the venture capital landscape now boasts numerous tools that empower founders and investors to leverage their existing communities for funding. However, what remains lacking are resources that enable those lacking extensive networks – the community-less, undernetworked, and underestimated – to access similar opportunities. Despite some remaining LP reluctance when emerging managers seek subsequent funding rounds, this initiative represents a positive step forward, and its success will be closely monitored.

Recent Wins for Underrepresented Founders

• A $250M growth fund dedicated to allocating half of its profits to historically Black colleges and universities
• Collab Capital’s successful closure of a $50 million debut fund focused on backing Black founders

Looking Ahead

The remainder of this newsletter will explore topics including disaster tech, Airbnb, and an S-1 filing for a healthcare communications company. You can connect with me on Twitter @nmasc_.

A Pivotal Moment for Disaster Technology

Technologies designed to address disasters, including companies leveraging data for wildfire mitigation or brainwave analysis for PTSD assessment, are currently experiencing significant growth. Is this development unexpected? The COVID-19 pandemic and the escalating climate crisis have spurred innovation.

Entrepreneurs are now focused on developing preventative measures to combat increasingly frequent and severe disasters. A comprehensive analysis of this emerging field was recently conducted by Danny Crichton, encompassing 12,000 words of research.

Key Insights: The Equity team has condensed this extensive 12,000-word report into a concise 20-minute podcast episode, highlighting the most important findings. As Danny Crichton notes, “Major catastrophes represent a burgeoning sector for growth.”

For those who prefer reading to listening…

• The most challenging sales environment imaginable.
• Data’s prominence surpassed oil, until the very source ignited.
• Even with Earth’s potential demise, the internet’s functionality is likely to persist.
• Startups prioritizing human well-being amidst crisis.

Airbnb's Future Trajectory

Following the initial downturn in travel beginning last March, significant attention has focused on Airbnb, the globally recognized travel and short-term rental platform. Approximately one year prior, the company reported decreases in revenue and implemented workforce reductions, impacting around 25% of its employees – a total of 1,900 positions.

Currently, with the resurgence of digital nomadism and extended travel durations, Airbnb presents a compelling narrative of growth.

Key Insights: Airbnb’s Chief Executive Officer, Brian Chesky, recently engaged in a discussion with Jordan Crook to detail the company’s strategies for navigating a more responsive and adaptable post-pandemic landscape.

The ultimate success of Airbnb’s approach remains to be seen. However, gaining insight into the perspective of a co-founder whose business experienced substantial disruption and subsequent recovery during the pandemic can offer valuable tactical guidance to other founders regarding conflict management and future planning.

The convergence of evolving living arrangements and the future of work:

• Airbnb is reinforcing its commitment to flexible search options and enhancing the host experience in anticipation of the summer of 2021.
• Entrepreneurs are establishing "hacker homes" to replicate the dynamic environment characteristic of Silicon Valley.
• A message to startups: prioritize reinvention over superficial changes.

TC Sessions: Mobility 2021 – A Deep Dive

Mark your calendars! TC Sessions: Mobility 2021 is scheduled for June 9th. This one-day virtual event will showcase leading thinkers and innovators shaping the landscape of future transportation technologies.

The event’s agenda is full of presentations from founders, investors, and specialists focused on key areas like micromobility solutions, self-driving cars, electric vehicle advancements, and the emerging field of air taxis.

Featured Speakers and Key Discussions

Karl Iagnemma, President of Motional, and Chris Urmson, co-founder and CEO of Aurora, will be joining forces for a crucial discussion. They will address the ongoing technical challenges in autonomous vehicle development.

Their conversation will also cover the competitive landscape for skilled professionals and explore viable business strategies and applications for autonomous technology.

The speaker lineup also includes Jesse Levinson, co-founder and CTO of Zoox. Tamika L. Butler, a community organizer, transportation consultant, and lawyer, will also share her insights.

Additional Industry Leaders

Tiffany Chu, co-founder and CEO of Remix, and Frank Reig, co-founder and CEO of Revel, are confirmed to participate. Their expertise will contribute to a well-rounded discussion.

Furthermore, JoeBen Bevirt, founder and CEO of Joby Aviation, will present his vision for the future of aerial transportation. Reid Hoffman, the founder of LinkedIn and an investor, will also be present.

Hoffman’s insights are particularly relevant, given his special purpose acquisition company’s recent merger with Joby Aviation, and he will discuss the implications of SPACs for the aviation industry.

Secure Your Spot

Interested in attending this pivotal event? Tickets are still available for purchase and can be obtained here.

Weekly Tech Highlights

Featured on TechCrunch

• Poparazzi achieved prominence by actively promoting itself within the App Store.
• Apple recently released a series of operating system updates and unveiled details regarding WWDC.
• Microsoft is leveraging GPT-3 to enable coding through natural language input.
• Mono, a Nigerian company, has secured substantial funding to bolster Africa’s digital economy.

Highlights from Extra Crunch

• Doximity’s S-1 filing potentially clarifies the increasing activity in healthcare-related acquisitions.
• Expensify’s journey demonstrates how shedding Silicon Valley-centric attitudes can facilitate global expansion.
• The SaaS industry could benefit from adopting strategies observed in the cryptocurrency space.
• Creating a comprehensive buyer’s guide can effectively educate both a startup’s sales force and its clientele.
• Zeta Global’s IPO documentation reveals moderate growth alongside robust adjusted profitability.

Acknowledged and understood.

N