4 ms·

At Initialized Capital, Odd Couple Looks to Do VC Differently

83 points by prostoalex 8y ago

shanghaiaway 8y ago
Submarine.
- grosjona 8y ago
  Exactly. I was thinking the same thing.
ShabbosGoy 8y ago
A real 100 year VC firm would be a DAO. Maybe they aren’t as forward looking as they’d like to believe. Much respect to Alexis and Garry, though. It’s not easy to go it alone.
- geofft 8y ago
  Why would a VC firm be distributed?
staunch 8y ago
Seems like a good thing to have another VC firm that actually tries to make its own decisions. It doesn't seem particularly new or ambitious though. New and ambitious would be attempting to beat YC at its own game. Competing head-to-head with YC for startups and trying to create a version of YC that was meritocratic and scaleable. For the good of the world, startups, and for profit. Someone could create a version of YC that funds any startup that meets a certain level of traction for example. Or it could do funding by directly measuring the team's technical or other abilities. It could use a blind admissions system that doesn't rely on judging founders in 10 minute interviews. YC funds just 3% of the founders that ask for funding. It's entirely likely that they fund the wrong 3% and/or ignore a huge percentage of potentially great startups. There's only a few people in the world able to the raise money necessary to compete with YC and they all seem afraid to even try.
- hkmurakami 8y ago
  Social capital is doing this now as a pilot.
  - rdlecler1 8y ago
    Yes, now here is real innovation.
- dyarosla 8y ago
  If someone was looking to compete with YC one starting differentiator could be to not force teams to relocate to SV for three months; something that YC has proven time and again they’re not open to budging on (aside for the mini-not quite YC program they ran). They’ve explained their rational but I don’t buy it.
  - nojvek 8y ago
    It’s easy to forget how important SV is compared to the rest of the world. SV invests more in startups than the rest of the world combined. It’s the only place in the world where people put big money where their mouth is. I’d love to see YC definitely grow in other places but it boils down to a couple of things. A high concentration of capital, talent and a good business support. Not a lot of places that have that or willing to cultivate that.
    - devdas 8y ago
      Or just white men investing in other white men.
dxhdr 8y ago
Article leads with a photo captioned "Garry Tan and Alexis Ohanian are looking to a build a VC firm for 'the next 100 years.'" The closest the story comes to expounding on this that the firm has their own CRM software and that they "value doing our own research." A succinct summary of the article may be the paragraph leading "Like most VCs, Initialized says it isn't like the other VCs."
- rdlecler1 8y ago
  The irony about VC is that they don’t invest in lifestyle business (except their own). Building your own CRM isn’t really rocket science. We’ve built automation and AI into our deal flow and company tracking and a bespoke search engine to help with competitive market analysis. Want to be different? Run a VC firm like a startup: build proprietary technology to outcompete incumbents and scale in a way not possible without technology. It does’t even sound like they have a FT engineer.... Imagine investing in a startup that didn’t have a FT engineer! But that’s exactly what they (and most VCs) are asking of their Limited Partners! Sounds like a puffy and carefully managed PR piece with a complicit journalist to prime the raise of their next fund without triggering a Reg D 506c registration.. They may have great returns, smarter than most, and have higher conviction, but it’s pretty much same old same old of catching the wave of good deal flow from your celebrity network. Nothing innovative here.
  - garry 8y ago
    Actually I am an engineer, as is Vince and Brett in our partnership. Brett and I implemented much of the software that runs YC today including the application process and the internal social network.
    - tixocloud 8y ago
      From the article, it mentions Matthew coming through a cold pitch but then later on it also states that he went through a referral process to get to the cold pitch. Are you guys doing anything to vet startups minus the referrals?
    - 8y ago
salimmadjd 8y ago
OT - I hope Ohanian does more VC stuff than show up in Serena’s matches. I’ve watched many of Williams’ matches through out, and now watching Ohanian in the friends and family box, he seems out of place. The impression I get is like he is not in the group of entourage around Serena. There seems no chemistry between them and Ohanian. I remember something that stuck with me, think it was when she last won the Wimbledon, and the camera followed her inside the complex. Ohanian was waiting for her and it just felt so awkward the interaction between Serena and Ohanian. In contrast watching Roger Federer be greeted by his wife it felt so natural.
- quintin 8y ago
  WTF man?
  - salimmadjd 8y ago
    My mistake it wasn't Wimbledon but the Australian Open. Other have noticed the same awkwardness I described [1]. Granted DailyMail is not a real journalistic paper, but I include this because it shows the specific moments I found awkward including Serena not thanking him when she won. About the box. It depends on the player. It's mostly the coaching and training team and some friends and family. Depending on the player and how successful they're. In this specific case, it was mostly trainers, coaches, probably manager, Serena's friends and some family member. So I'm trying to make this about family's not getting along. Serena's coaches, trainers and managers didn't show much connection to Ohanian. [1] http://www.dailymail.co.uk/news/article-4166476/Serena-Williams-snubs-fiance-Australian-Open-win.html http://www.dailymail.co.uk/news/article-4166476/Serena-Willi...
    - kn0thing 8y ago
      Your citation is fake news; that footage is after I first saw her. This is the moment when I first saw her: https://www.instagram.com/p/BP09-HFA-mb/ https://www.instagram.com/p/BP09-HFA-mb/ I wish you had the courage to re-post your previous comment. But more to the point -- this is Hacker News in 2018?
brandonb 8y ago
Garry, Alexis, and the team at Initialized are the real deal. In a world where most investors' first question is, "Who else is in?", the hardest thing for a raw startup to find is someone with the conviction to write the first check. They've built their whole firm on being willing to bet on companies before other investors do. Later on, when things get tough--and eventually, things always get tough--you want somebody who's been in the trenches, knows how it feels, and can help you guide the company between Scylla and Charybdis. Garry and Alexis have been there, and they do that. If you're starting a company and looking to raise funding, I'd strongly recommend you speak with Initialized. There's a lot of talk in venture. Garry and Alexis walk the walk.
- shanghaiaway 8y ago
  Can we get a disclosure on your relation to Initialized?
  - brandonb 8y ago
    They invested in my first company, which went through YC's S11 batch.
seizethecheese 8y ago
I've seen this plastered all over my twitter feed. Similarly, story for the new book by Elad Gil. The incestual promoting among the startup elite is a bit nauseating.
- ShabbosGoy 8y ago
  Now imagine living among those types of people every day. That’s SV in a nutshell. Wrongthink isn’t tolerated.
- wastedhours 8y ago
  Which is pretty much the stock reasoning for SV as a concept. Being inside of it gives you the benefits of that promotion. Of course, whether it's good or not is something else entirely.
- seizethecheese 8y ago
  I wish I could delete this. In retrospect, it's perfectly normal to promote your friends' startups, funds or books.
yeleti 8y ago
I think the point here is, a Founder-VC is better than a traditional VC because the Founder-VC understands ”the life and art of being in the trenches”.
- kn0thing 8y ago
  And we ship. It's hard to unlearn solving problems via software when you've done it, especially at scale successfully, and it makes everyone at the org (and soon in the founder network) more effective and frankly happier doing their jobs.
Rjevski 8y ago
GDPR-free version: http://archive.is/9LH5U http://archive.is/9LH5U

83 points by prostoalex 8y ago

shanghaiaway 8y ago

Submarine.

grosjona 8y ago
Exactly. I was thinking the same thing.

ShabbosGoy 8y ago

A real 100 year VC firm would be a DAO. Maybe they aren’t as forward looking as they’d like to believe. Much respect to Alexis and Garry, though. It’s not easy to go it alone.

geofft 8y ago
Why would a VC firm be distributed?

staunch 8y ago

Seems like a good thing to have another VC firm that actually tries to make its own decisions. It doesn't seem particularly new or ambitious though. New and ambitious would be attempting to beat YC at its own game. Competing head-to-head with YC for startups and trying to create a version of YC that was meritocratic and scaleable. For the good of the world, startups, and for profit. Someone could create a version of YC that funds any startup that meets a certain level of traction for example. Or it could do funding by directly measuring the team's technical or other abilities. It could use a blind admissions system that doesn't rely on judging founders in 10 minute interviews. YC funds just 3% of the founders that ask for funding. It's entirely likely that they fund the wrong 3% and/or ignore a huge percentage of potentially great startups. There's only a few people in the world able to the raise money necessary to compete with YC and they all seem afraid to even try.

hkmurakami 8y ago
Social capital is doing this now as a pilot.
- rdlecler1 8y ago
  Yes, now here is real innovation.
dyarosla 8y ago
If someone was looking to compete with YC one starting differentiator could be to not force teams to relocate to SV for three months; something that YC has proven time and again they’re not open to budging on (aside for the mini-not quite YC program they ran). They’ve explained their rational but I don’t buy it.
- nojvek 8y ago
  It’s easy to forget how important SV is compared to the rest of the world. SV invests more in startups than the rest of the world combined. It’s the only place in the world where people put big money where their mouth is. I’d love to see YC definitely grow in other places but it boils down to a couple of things. A high concentration of capital, talent and a good business support. Not a lot of places that have that or willing to cultivate that.
  - devdas 8y ago
    Or just white men investing in other white men.

dxhdr 8y ago

Article leads with a photo captioned "Garry Tan and Alexis Ohanian are looking to a build a VC firm for 'the next 100 years.'" The closest the story comes to expounding on this that the firm has their own CRM software and that they "value doing our own research." A succinct summary of the article may be the paragraph leading "Like most VCs, Initialized says it isn't like the other VCs."

rdlecler1 8y ago
The irony about VC is that they don’t invest in lifestyle business (except their own). Building your own CRM isn’t really rocket science. We’ve built automation and AI into our deal flow and company tracking and a bespoke search engine to help with competitive market analysis. Want to be different? Run a VC firm like a startup: build proprietary technology to outcompete incumbents and scale in a way not possible without technology. It does’t even sound like they have a FT engineer.... Imagine investing in a startup that didn’t have a FT engineer! But that’s exactly what they (and most VCs) are asking of their Limited Partners! Sounds like a puffy and carefully managed PR piece with a complicit journalist to prime the raise of their next fund without triggering a Reg D 506c registration.. They may have great returns, smarter than most, and have higher conviction, but it’s pretty much same old same old of catching the wave of good deal flow from your celebrity network. Nothing innovative here.
- garry 8y ago
  Actually I am an engineer, as is Vince and Brett in our partnership. Brett and I implemented much of the software that runs YC today including the application process and the internal social network.
  - tixocloud 8y ago
    From the article, it mentions Matthew coming through a cold pitch but then later on it also states that he went through a referral process to get to the cold pitch. Are you guys doing anything to vet startups minus the referrals?
  - 8y ago

salimmadjd 8y ago

OT - I hope Ohanian does more VC stuff than show up in Serena’s matches. I’ve watched many of Williams’ matches through out, and now watching Ohanian in the friends and family box, he seems out of place. The impression I get is like he is not in the group of entourage around Serena. There seems no chemistry between them and Ohanian. I remember something that stuck with me, think it was when she last won the Wimbledon, and the camera followed her inside the complex. Ohanian was waiting for her and it just felt so awkward the interaction between Serena and Ohanian. In contrast watching Roger Federer be greeted by his wife it felt so natural.

quintin 8y ago
WTF man?
- salimmadjd 8y ago
  My mistake it wasn't Wimbledon but the Australian Open. Other have noticed the same awkwardness I described [1]. Granted DailyMail is not a real journalistic paper, but I include this because it shows the specific moments I found awkward including Serena not thanking him when she won. About the box. It depends on the player. It's mostly the coaching and training team and some friends and family. Depending on the player and how successful they're. In this specific case, it was mostly trainers, coaches, probably manager, Serena's friends and some family member. So I'm trying to make this about family's not getting along. Serena's coaches, trainers and managers didn't show much connection to Ohanian. [1] http://www.dailymail.co.uk/news/article-4166476/Serena-Williams-snubs-fiance-Australian-Open-win.html http://www.dailymail.co.uk/news/article-4166476/Serena-Willi...
  - kn0thing 8y ago
    Your citation is fake news; that footage is after I first saw her. This is the moment when I first saw her: https://www.instagram.com/p/BP09-HFA-mb/ https://www.instagram.com/p/BP09-HFA-mb/ I wish you had the courage to re-post your previous comment. But more to the point -- this is Hacker News in 2018?

brandonb 8y ago

Garry, Alexis, and the team at Initialized are the real deal. In a world where most investors' first question is, "Who else is in?", the hardest thing for a raw startup to find is someone with the conviction to write the first check. They've built their whole firm on being willing to bet on companies before other investors do. Later on, when things get tough--and eventually, things always get tough--you want somebody who's been in the trenches, knows how it feels, and can help you guide the company between Scylla and Charybdis. Garry and Alexis have been there, and they do that. If you're starting a company and looking to raise funding, I'd strongly recommend you speak with Initialized. There's a lot of talk in venture. Garry and Alexis walk the walk.

shanghaiaway 8y ago
Can we get a disclosure on your relation to Initialized?
- brandonb 8y ago
  They invested in my first company, which went through YC's S11 batch.

seizethecheese 8y ago

I've seen this plastered all over my twitter feed. Similarly, story for the new book by Elad Gil. The incestual promoting among the startup elite is a bit nauseating.

ShabbosGoy 8y ago
Now imagine living among those types of people every day. That’s SV in a nutshell. Wrongthink isn’t tolerated.
wastedhours 8y ago
Which is pretty much the stock reasoning for SV as a concept. Being inside of it gives you the benefits of that promotion. Of course, whether it's good or not is something else entirely.
seizethecheese 8y ago
I wish I could delete this. In retrospect, it's perfectly normal to promote your friends' startups, funds or books.

yeleti 8y ago

I think the point here is, a Founder-VC is better than a traditional VC because the Founder-VC understands ”the life and art of being in the trenches”.

kn0thing 8y ago
And we ship. It's hard to unlearn solving problems via software when you've done it, especially at scale successfully, and it makes everyone at the org (and soon in the founder network) more effective and frankly happier doing their jobs.

Rjevski 8y ago

GDPR-free version: http://archive.is/9LH5U http://archive.is/9LH5U