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Series F - Issue #48: The Future of Venture Capital

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Series F

March 4 · Issue #48 · View online

The Future of Venture Capital


👋🏻 Happy Sunday!
This is Series F, a (hopefully) insightful weekly curation of the latest developments dictating the future direction of the venture capital industry.
Curated by @neilswmurray
Although I’ve been a student of venture for a couple of years now, I’ve mainly been looking at the present or the future. This week I learnt that I should spend more time looking at the past, as a I discovered that Softbank were actually who bankrolled VCs such as Brad Feld and Fred Wilson at the beginning of their careers, meaning they’ve been disrupting venture for over 30 years, not just 1… 
On that note, I really need to give a shout-out to a podcast: Origins by Notation Capital, it has got to be the most under-rated podcast in venture/tech. I’ve been working my way through the back catalogue at a speed of knots this week, and highly recommend it to anyone reading this (It’s also where I learnt the above nugget of info)
Right, let’s get to it 🚀

Upsetting the Apple Cart 🍎
“What makes Kindred Capital stand out from most seed investors or other size VC firms, is its so-called “equitable venture” model that sees every founder it backs get carry in the fund. This means they effectively become co-owners of Kindred Capital and, once investors/LPs have their investment returned, will share in any subsequent fund profits.”
Why this matters?
As Steve O'Hear points out:
1. “It thinks such an attractive (and relatively unheard of) offer helps the firm secure “premium” deal-flow, since what ambitious founder wouldn’t want some additional upside protection. That is, even if your startup deadpools or doesn’t achieve a meaningful exit, if you are backed by Kindred you’ll have skin in the game for the entire Kindred fund portfolio.”
2. “It further incentivises each portfolio startup to bat for each other, whether that be through shared learning and support, or something harder like helping win the first users and/or customers.”
By the way, as Steve has essentially written this week’s Series F for me, it’s only fair that I recommend his own excellent newsletter which gives a great behind-the-scenes look at the thought process of one of Europe’s top tech journalists:
In addition to Steve’s analysis, I’d like to add:
- The majority of portfolio founders earn this. They do a lot for their investors, providing reference checks, insights on a particular market, intros to other founders etc etc. The way this transaction has played out historically is that because the investor has invested in them, they kind of “owe it” to them to help out with this type of thing, just because they “should”. However, this type of assistance can be invaluable to an investor, therefore to have a tangible value attached to it in this way makes a lot of sense to me.
- This model certainly plays into what we’ve talked about a lot in this newsletter, allowing founders to angel invest earlier and earlier, before they’ve recorded an exit of their own. Whether it be through Spearhead or through vehicles like my own, this is certainly one of the big macro trends in venture right now.
Due Diligence 📚
1. One of my main personal thesis around the future of venture, is that eventually the early-stage market will move to truly backing founders, by buying a stake directly in their futures rather than the company they are working on at that specific time. This model is currently taking off with U.S students ~> Taking a cut of student’s future paychecks has Silicon Valley investors funding education
2. This is a fascinating and excellent point: If we’re truly motivated to deconstruct the wealth inequalities that have ravaged and extracted wealth from rural, indigenous, and majority people of color communities, then we must rid ourselves of the power dynamics, biases, and culture that got us here in the first place ~> Wealth Inequality and The Fallacies of Impact Investing
3. A $50M fund solely to back startups coming out of UC Berkeley, run by a 26 year old, need I say more… ~> Jeremy Fiance, the 26-year-old founder of House Fund, ups his VC ambitions
4. Hunter Walk and his new fund Homebrew III are on a one-man mission to provide content for Series F each week (hey 👋🏻 and thanks Hunter!) as he delves into what changes they made for version/fund three ~> Venture Funds as Products. What We Changed for Homebrew III.
5. Another (but a very good) profile of Chamath Palihapitiya and how the former Facebook exec is betting his VC firm can change the way Silicon Valley picks and nurtures winning ideas ~> Social Capital’s Chamath Palihap­itiya Wants To Fix Capitalism
6. I’m going to give them the final word as well, here’s How SoftBank, World’s Biggest Tech Investor, Throws Around Its Cash 
Always Be Closing ☕️
All feedback and opinions welcomed: @neilswmurray or neil@thenordicweb.com
Through my Angel Fund, I invest in the most ambitious pre-seed Nordic startups. 
In May I will be spending a week in San Francisco 🇺🇸.
I am looking to connect with people who are interested in learning more about or having more exposure to the Nordic and European ecosystem. If that’s you or you know who that is, please do reach out to me! 👊🏻
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