My Next Act: Democratizing Venture Capital

I’ve been lucky enough to participate in almost 20 venture capital funds as an LP — limited partner — over the past decade. 

Unfortunately, these funds have historically been impossible to access, even as a person of means.

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They are raised quietly and deployed slowly. 

If you miss the window of when a fund raises, which typically occurs in months, you have to wait years for the next fund to be offered.  

You are invited into these funds if you can provide value to the firm’s general partners, typically because you have expertise in a vertical, influence, or a network they benefit from having access to.

In my case, it’s because I invest in angel and seeds rounds, which means I’m on the cap table before later-stage funds invest. So this lets me provide warm intros and insights to them — namely, which startups they should pay attention to. 

On the margin, the two podcasts I host are helpful as well. 

Having helped drive the democratization of angel investing with my book (“Angel”), TheSyndicate.com, and course, Angel.University, I’m now setting my sites on venture capital. 

Investors must be accredited to participate in VC funds. In the United States, 10% of households are considered accredited investors and 1.5% are considered qualified purchasers. However, the funds with the most established reputations have been sold out for decades with the same institutional LPs (think university endowments, foundations, and retirement funds). 

With my fourth fund, LAUNCH4, I’ve decided to allow potential LPs to hear our pitch over Zoom. I hosted three webinars last month and had over $40,000,000 in interest across 1,000+ RSVPs. 

These RSVPs came from members of our angel syndicate, a couple of tweets, and a mention on my two podcasts.

I’ve been able to do this because we elected to do a public fundraise for our 4th fund under the 506(c) designation. Previously, we raised under 506(b)

You can read more about this designation here, but essentially they require a bit more work by our team to verify that our LPs are qualified to invest (under 506(b), individuals can self-certify). 

So why wouldn’t all funds select 506(c) over 506(b)? Two reasons: first, they fill up, so they don’t need to, and second, the extra work it takes to certify. 

In my experience, these 10+ year vehicles have the potential to be a fantastic way to participate indirectly in company formation long before startups are known or go public. While past performance is not a predictor of future results, as an asset class, venture capital funds have historically done well over long horizons (you can read more about returns here).

Investing in a venture capital fund can also give individuals a window into the future economy on an ongoing basis by having access to GPs and their teams as they place bets on where the future is headed.

If you’re interested in joining us for a webinar, and you’re an accredited investor or qualified purchaser, email us and let us know if you’ve been an LP before and tell us a little about yourself at calacanis@launch.co. 

I look forward to meeting you! 

best, jason 

Closing out the 100-point Startup Checklist

This episode wraps up the Startup Checklist. 100 items across 10 episodes of This Week in Startups https://bit.ly/twiste1342. Thank you to Charlie, Nick, Jacqui, Ashley, Presh, Mahreen and everybody who worked on it. Share it & feel free to remix it thisweekinstartups.com/checklist.

Geoff Lewis – Vibe Capitalist

Geoff is an irrepressible, delightful, candid personality on Twitter with an impressive investing track record. After leaving Founders Fund, Geoff launched Bedrock an investment firm “in search of narrative violations” with ~$6B AUM (according to Pitchbook). Episode 1340 discusses valuations, crypto, defense, AI, entrepreneurship, new city-states and more. https://bit.ly/twiste1340

The Nuts & Bolts of Hiring Remote

Lots of founders have started hiring remote. We brought on Scott Orn from Kruze Consulting to explain the pitfalls & options available to do it right. Listen here: bit.ly/twiste1326

  • Using PEOs to hire far & fast
  • Sales tax implications of a remote team
  • Virtual compliance best practices

A metaverse filled episode… VR Golf & Roblox earnings

Ryan Engle is the developer behind Topgolf with Proputt, a top selling VR game on Oculus. The game retails for $20 on the Oculus site. He came on the show to talk about usage trends in VR, the state of hardware development and more. Listen here: https://bit.ly/twiste1322

Startup Checklist: Building a Great Product

We’ve been working hard on these Startup Checklist episodes https://bit.ly/twiste1314

  • Do you have a MVP?
  • Is your product simple to use?
  • What’s your killer feature?
  • Is there an obvious product hook?
  • Can your product market itself?
  • What are your retention strategies & key metrics?

See more at thisweekinstartups.com/checklist

Why this startup CEO switched his entire company to a 4-day work week

“At Bolt, we fundamentally believe that we can get MORE work done at a HIGHER quality in a 4 day week.” @ryantakesoff & his @bolt team noticed that people were working way more & burning out because of remote work. So they made a change. Here’s how the 4-day work week is going for them. https://bit.ly/twiste1313

Talking with Max Chafkin about his book on Peter Thiel

Max is a reporter at Bloomberg. Listen to what he learned about Peter Thiel here: bit.ly/twiste1305

How to deliver a great customer experience | E1297

Make your customers love you. 20 minutes full of tactics guaranteed to make your startup more valuable (even if you just do one thing) bit.ly/twiste1297

A new reinsurance model for forest fires | E1295

Rising temps are increasing the frequency of wildfires in California. 6 out of the 7 largest California wildfires ever tracked by the state were in the last 18 months. Nat Manning from Kettle came on the program to discuss how their team is modeling fire risks to prevent the insurance system from falling apart. https://bit.ly/twiste1295