Paul Judge on helping lead SoftBank’s $100M Opportunity Fund, the future of VC & more | This Week in Startups Blog

Top Insights


  • Investing over zoom expands the top of the funnel and lowers the barrier to entry for all founders
    • Investors can take 2-5x more meetings with founders from anywhere in the world
  • Paul’s thesis: Investing in overlooked founders will likely generate outsized returns
    • The American Southeast and Midwest include 44% of the US population but only receive 14% of VC funding
    • Despite this, 36% of last year’s Inc. 5000 reside in these regions with a median growth rate of 161% year-over-year
  • The “either-or” debate between making existing firms invest in underrepresented founders from their main funds OR raising “opportunity” funds that are specifically focused on underrepresented founders isn’t helpful, both are necessary to make VC funding more equitable
  • Jay-Z had the best Q1 2021 of any entrepreneur or investor
    • Tidal was acquired by Square for $297M, he sold 50% of Ace of Spades to LVMH for ~$300M, launched $10M cannabis-focused fund to back black founders, Oatly filed for IPO

Intro


  • Paul Judge, Ph.D. is Managing Partner of Panoramic Ventures, a VC fund that invests in “underserved geographies and overlooked founders” prioritizing the American Southeast and Midwest. Paul is also Co-Founder & Executive Chairman of Pindrop, an information security company that provides risk scoring for phone calls to detect fraud and authenticate callers). Pindrop’s most recent valuation was $900m in 2018.
  • Paul also serves on the investment committee for SoftBank’s $100m+ Opportunity Growth Fund to invest in Black, Latinx and Native American founders
  • Paul is based in Atlanta, but has become a Miami regular.
  • Atlanta’s startup scene is heating up:
    • Airbnb just located it’s East Coast engineering team there
    • Local Unicorns: Calendly ($3B), Greenlight ($1.2B, consumer fintech), Rubicon ($1B, recycling technology), SalesLoft ($1B, sales software)
    • Strong talent pipeline from Georgia Tech

The virtual-first investing paradigm shift


“I see more companies than I would have seen otherwise, the top of funnel is wider. From the entrepreneur’s standpoint, it’s easier to get a meeting with an investor than it was traditionally. That means a whole new generation of entrepreneurs that wouldn’t have had access, now have more access to venture capital funds & angel investors.”

Paul Judge
  • Paul has made 25 investments in 2020, all over Zoom. He has met 2 founders in person, but only after investing.
  • Being an active investor in 2020 required going virtual. Most investors never considered this a viable method prior to the pandemic. Both Paul & Jason discovered that virtual investing offered a new set of benefits:
    1. Investors can take 2-5x more meetings because intro meeting times went from 2-3 hours to 20-30 minutes. How?
      • Commutes and pleasantries are eliminated, and everyone gets down to business ASAP.
      • Conversations now start with hard numbers. Entrepreneurs have become more direct in their approach, making the information needed to diligence an investment up-front in their first email.
    2. Investors now have much greater access to founders outside their city. Travel and cost of living in the Bay Area are high and are no longer an obstacle for founders.
      • By taking more meetings from broader geography, investors are able to reduce their bias.
      • With more meeting slots available, it’s easier to take a chance on a founder you wouldn’t have met with pre-COVID.
    3. Virtually, the pattern-matching necessary to be a great VC becomes more about assessing the founder based on their performance, rather than by charisma or presentation skills.

How Paul Judge invests


  • Paul’s Techsquare Labs was focused on backing top talent (students & professors) from local universities like Georgia Tech, funding founders at the pre-seed and seed stages.
  • He is now expanding to be involved at Series A & B both at SoftBank and Panoramic Ventures, which just launched a $300M fund.
  • Paul knew 2/4 other members of the Softbank Opportunity fund’s investment committee from being a part of the 2016 class of Aspen Institute’s Henry Crown Fellow Program.
  • Panoramic’s thesis: investing in overlooked founders will generate outsized returns.
    • The American Southeast and Midwest receive only 14% of VC funding even though they include 44% of the country’s population.
    • 36% of last year’s Inc. 5000 reside in these regions with a median growth rate of 161% year-over-year.

How to make investing more equitable


“Black founders are not just solving black problems, they are solving some of the most meaningful problems that exist.”

Paul Judge
  • The “either or” debate between making existing firms invest in underrepresented founders out of their main funds OR raising “opportunity” funds that are specifically focused on underrepresented founders isn’t helpful, we need both to make venture capital more equitable.
  • VC firms typically don’t change their partners often (turnover typically occurs with a new fund every 3-7 years), so adding new diverse partners to existing firms is a slow process.
    • The industry needs to evolve in this way, while also meeting fiduciary responsibility to limited partners who invested in the fund.
  • Purpose-built investment vehicles like SoftBank’s Opportunity Fund have a clear mission and can make an impact right away.
    • Another benefit is creating an ecosystem where some of the top underrepresented entrepreneurs can support & inspire each other.

Jay-Z’s groundbreaking Q1 2021


“I was just talking with somebody about who had the best quarter, Chamath or some other venture capitalist and I was was like, ‘No, I think Jay Z had the best, he just sold half Ace of Spades to LVMH.'”

Jason

“I love that love Jay-Z’s going after industries that have traditionally been unfair to the people that have been creating value. The music industry is traditionally unfair to the creators, so he did Tidal. In food and beverage, the Crystal CEO got shot himself in the foot, so [Jay-Z] went after that. Then if you look at the cannabis industry, I mean, it’s not exactly tech, but it’s creating tens of billions of dollars of value. It’s one of the most valuable crops that this country’s ever seen. But if you look at everyone that’s going public, there’s no diversity, but we all know this country was built on the backs of blacks tending to crops.”

Paul Judge

Companies Paul shouted out during the episode



We recently launched a curated list of the most generous software discounts for startup founders. View all deals at startupdeals.tech.

The best job for an audio/video genius in San Francisco!

16078702253_798ca60c79_kFor the past six years I’ve taped over 500 episodes of my podcast, This Week in Startups. We’ve had the most amazing guests on the show, from Travis at Uber (Ep180) to Peter Thiel (Ep525) to Chris Sacca (Ep291) to Glenn Beck (Ep526) to VC John Doerr (Ep520) to Anne Wojcicki (Ep521) to Reid Hoffman (Ep490) to Fred Wilson (Ep523) to Yancey at Kickstarter (Ep524) to Chamath (Ep480) to Evan from Twitter (Ep345) to Kevin from Instagram (Ep196) to Andrew from Groupon (Ep52) to Tim Ferriss (Ep484) … the list goes on and on and on and on.

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The show has massive reach and massive resources now. We tape in our own studio, we have the latest cameras, microphones and technology.

We have an Emmy-Award winning producer named Jacqui!

We do live shows that sell out in seconds with 500 attendees.

Most importantly, we have hell of a good time! We laugh and joke and sit in awe of the subjects we get to interview.

The show is doing so well that we are adding two full-time directors and video editors. We are looking for at least one with a lot of experience, and the second one can either have a lot of experience or a lot of hustle!

You can Apply here.

If you ever want to reach me and pitch me on working on my team, I have the winners@launch.co email always open!

Working for me will level you up and you’ll have me as an advocate for life. I’ve invested in my alumni’s startups, and helped get my former team members the greatest gigs in the world. I’m loyal like a bulldog and I love seeing my people do their best work and go onto great things.

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Working for me is like joining the Navy Seals: most folks can’t do it, but those who can go on to change the world — and push themselves to a level they didn’t even know they could.

This Week in Startups is pure joy at this point, with a ton of resources to do things correctly.

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Super smart, cool toy Sphero is a robotic ball that moves, follows algorithms

What’s the next Barbie? If you ask Paul Berberian, he’ll say a small round ball, about the same size and weight of pool ball. Inside, a robot, gyroscope, and a couple of motors. Jason sat down with Paul at Tech Stars Foundercon to talk about his company Orbotix, and its programmable robotic ball, called Sphero. The 1.0 release sold about 100,000. Now in 2.0, Sphero is airtight, watertight and can travel at 7 feet per second, all controlled by a smart phone. This is an incredibly cool and smart toy. Paul predicts Orbotix will sell millions of units, setting Sphero up to be a powerful brand like Mattel’s Barbie or Hot Wheels. Plus, why VCs are scared to invest in hardware.

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Lynda Weinman on how she stayed profitable on $25 monthly subscriptions

Lynda Weinman bought the domain lynda.com in the mid 90s, when she was teaching herself web design. Fast forward through writing how-to books, and a classroom education program in Ojai, California. Today Lynda.com is an online resource with video-based courses, millions of registered users, and over $100m in late stage investment. The videos aren’t free, but Lynda has never raised prices above $25 per month. And the company has been profitable every year. From her garage to a 12 acre campus with a 100 person sales team, Weinman shared her journey at LAUNCH Education & Kids.

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And to Audible. My Audible picks of the week are One of Kind: The Story of Stuey “The Kid” Unger, the World’s Greatest Poker Player, and a bonus pick: Wheat Belly. To get your free audiobook, go to audible.com/twist.
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Yves Behar on smart locks, and why great design matters

A good product needs great design, as Yves Behar knows all too well. The August smart lock is just his latest in a long line of projects. He designed One Laptop per Child’s XO Laptop, Jawbone’s iconic bluetooth headset, and the dance party-starting Jambox. This is must-watch on the huge role that design plays in your company, your product, and innovation.

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NSA, Dropbox, Zynga, SEC, Yelp – TWiST News Roundtable

Tyler Crowley is back from Sweden! He joined Dalton Caldwell, CEO of App.net, and Jason to discuss Microsoft’s reorg, Yelps’ new delivery service, Dropbox’s move to become your always-on hard drive, why Facebook Graph Search & other FB products suck, the SEC allowing startups to say they’re raising money, the latest on NSA leaks & more.


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How should we do the ads in This Week in Startups

Having an interesting discussion with my pal Fred Wilson over at his blogs, in the comments, about the five minutes worth of ads, my intro and theme music.

Really good feedback, as I was just using this new “pandora for talk radio” App “Swell.” It’s a clever App where the amount of time you listen to a show defines how much you like it. That means we need to *start* with content and back load the ads a bit.

Note: one thing I hate about this Swell app is it *doesn’t* let you subscribe to my podcast AND they are turning off hyperlinks in my show description. That’s just lame, immature product design. Like we really don’t get what you’re doing there Swell team… you’re obviously trying to keep people in the App. That’s stupid and it makes me not want to promote you. For that reason I didn’t even include link to the App… see how that feels Swell team? Makes you feel crummy that I turned your link off in here? Think of all the clicks you lost!

That’s how I feel about your turning off my links.

Instagram Video, NSA PRISM, MakerBot, FAB, John McAfee- TWiST News Roundtable

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Jason & guests Jason Shellen of Boxer and Anil Dash of ThinkUp talked about the latest NSA news (with a quick federal agency tutorial from Anil), Fab’s $1B valuation, John McAfee’s crazy “How to Uninstall McAfee” video, Tesla’s 90-second battery swap and Instagram video vs Vine. Plus, Jason Shellen revealed what Google Reader could have been (had Google management listened and understood social back in ’05), and Anil Dash made the case for 3D printers as a mass-market device.


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My Kara Swisher Interview Featured on iTunes

Kara, the co-executive editor of All Things Digital, was my amazing guest at “This Week in Startups” LIVE in San Francisco earlier this month. She is honest, smart & naughty. In another life we could host a drive-time talk show! 🙂

You can subscribe to the podcast on iTunes — both video and audio.

On Friday's TWiST – Gary Vaynerchuck

Joining me this Friday (at a special time – 11:00 AM) on This Week in Startups is everyone’s favorite twittering wine expert, Gary Vaynerchuck!  You all know Gary from hosting WineLibraryTV, but he’s also got a new book out – Crush It!  Tune in to check out what happens when Gary and I sit down to talk business.

You can watch live at http://www.thisweekinstartups.com.

About Gary:

Gary Vaynerchuk has captured attention with his pioneering, multi-faceted approach to personal branding and business. After primarily utilizing traditional advertising techniques to build his family’s local wine business into a national industry leader, Gary rapidly leveraged social media tools such as Twitter and Facebook to promote Wine Library TV, his video blog about wine. As his viewership swelled to over 80,000 a day, doors opened to a book deal, several national TV appearances, and a flurry of speaking engagements around the world. Gary’s dual identity as both business guru and wine guy has made him the “Social Media Sommelier.” His impact on the wine world has been commemorated via his inclusion in the 2009 Decanter Power List, an index of the 50 most influential figures in the industry.

In addition to the Web 2.0 keynote above, Gary’s remarks on personal branding, social media, and business at FOWA, Strategic Profits, and South By Southwest occasioned praise from established web denizens including Kathy Sierra and earned the admiration of countless bloggers and aspiring entrepreneurs