Among the books I have read recently on the topic of venture investing, The Power Law by Sebastian Mallaby stands out for both its thorough coverage of the history of venture capital as well as its implications for us in 2022.
While the nearly 500 page volume covers many details about the key events that gave rise to the venture ecosystem, what stands out is how venture capitalists in each era did something innovative at the time that gave birth to a new set of generational entrepreneurs.
As always, let us know if you have any questions.
On behalf of the team,
Nobu
💡 A Brief History of Venture Capital
While a few sentences won't do full justice, here is the brief history:
Arthur Rock (a godfather of VC) encouraged who would become known as the "traitorous eight" to start Fairchild Semiconductor in 1950's. He seeded the company at a time when leaving a company to start a new one was highly unusual
Don Valentine and Eugine Kleiner, both coming from Fairchild Semiconductor, took the idea even further to scale the VC experiment by founding two iconic VCs in 1970s: Sequoia and Kleiner Perkins
During the growth of venture capital in the 1980's (led partially by capital gains taxes), Accel distinguished itself as the first specialist fund in areas such as telecom
In the 1990's, Benchmark emerged as a VC with deliberately small funds that takes deliberate bets and optimizes for high returns. This was in contrast to Masayoshi Son's first appearance as the flamboyant investor that writes unprecedented large checks in growth companies (e.g., $100 million investment in Yahoo)
Thiel founded Founders Fund in 2005 as part of its youth revolt movement. VCs often had hands-on roles in startups, replacing young founder CEOs (e.g., Google) once they achieved scale. Instead, Founders Fund sought to take a deliberate hands-off approach in exceptional founders. The same period saw the emergence of what we currently know as incubators, pioneered by Paul Graham's YCombinator, to empower young startup founders
Several primarily US-based investors including Sequoia took a risk in early 2000's to invest in Chinese startups when the ecosystem was barely in existence. This has given rise to the massive Chinese technology market that we know of today
Andressen Horowitz further extended the youth revolt by taking the opposite approach as Founders Fund, focusing on coaching and mentoring startup entrepreneurs
Looking at its history, we see how the startup ecosystem we know today isn't random but rather the result of specific VCs led by specific individuals taking specific actions to make history. This has led to the thriving startup ecosystems we see today not only in the US but also China (and other countries in recent years including India, Europe, Latin America, and the rest of the world). It's exciting to have this perspective and think about what next steps await the venture ecosystem and what roles we will be able to play ourselves.
🎉 Updates from the Agya Family
Exciting news from Wildr last week – they came out of stealth and launched the world’s first toxicity-free social media network!
Steered by Melissa Ravi, their AI-powered platform promises users the freedom to express themselves, in an authentic fashion, without fear of being trolled.
Stayflexi signed a deal with Isha Foundation to manage 1,000+ cottages for the foundation globally. The team was evaluated against leading PMS solutions in the hospitality space in APAC before winning the enterprise deal.
Robinland's first real estate debt offering sold out in <2 weeks. In a market where real estate credit has contracted 50%, Robinland's ability to unlock new pathways for real estate capital comes at an inflection point for the industry.
💸 Select Financings in the Built World
Bilt Rewards | biltrewards.com
$150M growth round
Loyalty program and payment platform for property renters
CrowdStreet | crowdstreet.com
$43M growth round
Commercial real estate investment platform
Landis | landis.com
$40M Series B
Rent-to-own platform
DoorLoop | doorloop.com
$20 Series A
Property management software for landlords
GlobalFair | myglobalfair.com
$20M Series A
B2B materials procurement for construction
SwiftConnect | swiftconnect.io
$17M Series A
Physical access control platform
Breezeway | breezeway.io
$15M Series B
Property care and operations platform for short term rentals
Flueid | flueid.com
$15M Series B
Real estate data platform for underwriters and mortgage companies
Safely | safely.com
$12M growth round
Short-term rental insurance and guest screening
Greenzie | greenzie.com
$8M Series A
Self-driving commercial lawn mowers
h/t Aaron for helping with this edition of the newsletter.