No. 198: 20 Year Exit | VC Selling Off a Fund? | Late Stage Venture

The Long Game (A VC)

You don’t hear about venture-backed companies founded in 1999 that are still private or operating at all. Companies like Netscape and Amazon went public in short order. Others like Pets.com crashed out of the race. Return Path took the path less traveled, surviving as a private company and 20 years later finally selling to another company.

One of their investors, Fred Wilson, penned a nice piece about the impact his involvement with this company has had on him. Matt Blumberg, Return Path’s CEO reflected on his journey as well. The 20-year mark this company hit shocked me. Uber just crossed the 10-year mark and the question of when that company was going public has caused investors so much angst, I don’t know what they would do with a company not exiting somehow for two decades.

This Seed-Stage VC Founder Sold His Entire First Fund At A 4x Profit. Will Others Follow? (Forbes)

Speaking of impatience, I found this story quite interesting. I hadn’t heard of VC firms selling off all of its stakes from a fund in order to satiate its limited partners (LPs). How does this impact a VCs perception among founders? Will they feel like they have an investor who is going to stick it through with them?

Late Stage Venture (Andreessen Horowitz)

I don’t mean to write about Andreessen Horowitz so much, but I find the firm fascinating. In this post, General Partner Scott Kupor announces two new funds and a shift in their strategy to be more specialized with each of their funds.

One of the new funds is focused on late stage venture, the language they prefer over growth stage. The explanation for why they’re calling this late stage venture seems to align with the trend of venture-backed companies pushing off exits.

I don’t know that I buy the argument that the fund will enable them to invest in companies with unusually large visions that need more time to see them come to fruition. I think about Genentech going 14 years before it hit a liquidity event. That company changed the life science game. Andreessen Horowitz has invested in some really interesting companies that are going after changing foundation realities of our world, but I wonder the extent to which their flashier portfolio companies suck out the attention those companies are able to get. Perhaps this dedicated fund will help with that.

No. 187: 3 Thoughts – Heartland Visa | GDP-B |Top VCs

From Managing Decline to Building the Future

What would it look like for there to be a visa program that matched skilled immigrants with communities that are especially hard-hit by population decline in the U.S.? The Economic Innovation Group, a think tank founded by Sean Parker of Facebook fame, just published a report outlining this idea. I think the idea is compelling, but there are a few questions that come to mind:

  1. What steps will these communities need to take to make themselves as appealing as possible for immigrants to stay? I wonder how welcoming these communities will be to a new wave of folks coming in. Will they perceive the pie as fixed and these new entrants as eating their share of it?
  2. What role do folks who left these struggling communities have in trying to revive it? Marc Andreessen is from Iowa. Jack Dorsey is from Missouri. Can struggling communities partner with these sorts of folks to help cast vision for a new future and attract talent?

How to redesign GDP for the 21st century

Lots of countries, particularly developing ones, hang their hat on the size of their GDP (gross domestic product) which measures the value of the things we pay for in a year. A lot has changed since the measure was developed in the 1930s and the measure doesn’t quite capture all the value being created in an economy.

There are plenty things we don’t pay for up front – Facebook, the music you streamed on Spotify, etc. GDP measures what you paid for your phone, your laptop, your internet connection. MIT professor Erik Brynjolfsson claims to have developed an alternative GDP measure that captures the benefits we receive from the things we don’t pay for – GDP-B.

If this catches on, I’m really interested to see the impact it could have on policymaking. For example, Ghana rebased its GDP last year using a new set of more recent data that included more factors in its economy like oil and technology. On paper, the country’s GDP was $52 billion, about 25% bigger than originally believed. A number of governments in Africa turn off the internet around election time to stave off protests and organizing while they conduct funny business. Imagine getting a better measure of that impact. These past couple years in the U.S., I’ve often wondered what has been the impact on productivity of this president tweeting so much. Perhaps GDP-B could provide an answer.

The Midas List

Forbes puts this list out on the top 100 venture capitalists based on the the following methodology:

To make the list, investors are ranked by their portfolio companies that have gone public or been acquired for at least $200 million over the past five years, or that have raised additional funding at a valuation of $400 million or more. Forbes and TrueBridge put a premium on newer exits, as well as early-stage returns. 


This list needs to look a lot different 10 years from now. More melanin would be nice. Lo Toney closed his Plexo Capital I fund at $35.1M last month. Charles Hudson closed his second Precursor Ventures fund at $31m last month as well. Education seems to be getting hot in the startup world, hopefully Shantel Garvey notches a win. Perhaps Ken Chenault will notch a big win at General Catalyst. The list needs more black folks.

No. 182: 3 Thoughts: Shellye Archambeau | Africa’s 2018 VC Activity | Pollution Inequities

Take Bigger Risks: Shellye Archambeau, Former CEO, MetricStream

I’ve seen Shellye Archambeau’s name around and have been intrigued to learn more about her story. Her appearance on Masters of Scale gives a great peak into how she’s navigated her way through Silicon Valley.

What stood out in particular was her telling about a Bible her family has passed down that contains her family tree for ten generations. She credits that Bible along with her family’s culture has given her a sense of her ancestors and where she comes from that. That shaped how she developed her vision.

I’m so big on the importance of knowing where we come from being a mental block for black folks in the Diaspora, but haven’t given a lot of thought to how to make sure those coming after me know where they come from. I will give that some thought.

2018 was a Monumental Year for African Tech Start-ups with US$1.163B raised in equity!

It’s pretty amazing to see the traction startups are getting, but there’s a long ways to go. Just yesterday, $1.93b in deals were announced globally.

This brings to mind this great conversation between Ian Bremmer and Keyu Jin. China and African countries are not apples-to-apples by any means. There have to be lessons in the China story, though, that can guide countries to chart their own path deliberate, yet accelerated growth. I think making big investments in developing R&D ecosystems in each country’s strong industries is the way forward.

GenNx360 Capital Partners acquires majority stake in Miller Environmental Group

This deal stood out initially because GenNx360 is founded and run by black folks. Then, this morning I thought about this study showing the racial-ethnic disparities in who causes and consumes pollution. The study essentially showed that minorities cause less pollution but consume more of it. The GenNx360 deal feels somewhat symbolic of an effort to take the reins of addressing that.

No. 168: Social Capital Hedosophia is Going to Change the VC Game, But Will It Really?

Several weeks ago, Chamath Palihapitiya did an interview with Kara Swisher on Recode/Decode that really got my attention. He was talking about how the venture capital industry was overdue for a shakeup to meet the needs of technology startups. He talked about using data science to identify investment opportunities and scale companies, similar to what he did while he was at Facebook to provide in depth services to these startups.

Further, rather than there being a ton of pressure for these companies to scale quickly, they would have an investor that would be with them for the long term from the beginning. This sounded really interesting, particularly when he posited that this new iteration of Social Capital was going to surface founders who would typically be overlooked because of the way in which they will be looking at data.

One question that comes to mind is how would overlooked founders get on his radar. What’s his plan to get data across a wide enough geography in order to capture these overlooked startups?

Admittedly, during Chamath’s conversation with Kara, I was unsure of what this new iteration of Social Capital would look like. Well, I got my answer a few weeks ago when Social Capital partnered up with Hedosophia to list on the New York Stock Exchange, forming Social Capital Hedosophia.

What is Social Capital Hedosophia? This is a publicly traded holding company that is designed to take unicorns public without them having to go through the traditional process of going public – roadshows, lockup period, etc.

Initially, I thought that this new model Chamath was talking about could be a game changer for startups run by black people. Perhaps, this new iteration of Social Capital could do like Chamath said and reduce the exclusion of underrepresented groups from taking the next step in building technology companies. But, I’m not sure that Hedosophia has the people it takes to address the pipeline issue.

Beyond using data science, Chamath cannot cut out the human component of how he builds out this new company. He’s got to build a team that has a global worldview that can see into the worldview of folks in Jamaica Queens, Kansas, Lagos, and Bogota. Layer the machine learning on top of that and you’re cooking with grease.

If Social Capital Hedosophia (I’m going to get carpal tunnel if they don’t come up with shorthand for this.) doesn’t do this important work, the company will do what the rest of Silicon Valley has done, just more elegantly. Removing bias doesn’t matter if you’re pulling from the same pool of folks.

No. 138: How Does Africa’s Innovation Economy Tap Into Africa’s Wealth?

Yesterday, I had lunch with a friend who is raising a fund for her Lagos-based startup. At one point in our conversation, she shared the effort she has had to go through to get people she has met with in Silicon Valley up to speed on what is happening in Nigeria’s tech space.

This has been a refrain from a number of entrepreneurs and investors who are already tuned in on what is happening in Africa’s innovation economy. Fortunately, the tide seems to be trending towards Silicon Valley getting more hip to what is happening in Nigeria, Kenya, and to a lesser extent South Africa (Cape Town-based Naspers has led some massive investments that I am sure Silicon Valley investors have noticed.)

While we chatted, my mind went to some research I saw this weekend on Africa’s high net worth individuals. Capgemini’s annual World Wealth Report pegs the wealth of the 150,000 high net worth individuals across Africa at $1.4 trillion for 2016. These are people who have at least $1 million in investable assets, excluding primary residence, collectibles, non-durable goods like sweet potato pie, and durable goods like automobiles.

This is serious capital. I wonder what percentage of this wealth has gone into Africa’s innovation economy since 2009. The Capgemini report highlights three industries that are going to drive wealth accumulation globally through 2025 – financial services, technology, and healthcare. There are startups across Africa doing interesting things in all three of these areas, yet the challenges of getting Africa’s wealthy to invest in the continent’s startups has been a conversation for several years now. I think we’re trending to those conversations being fewer and fewer.

There are several people working to build a critical mass of wealthy investors across Africa committed to investing in Africa’s innovation economy, and these initiatives are gaining real traction. Further, some African governments have developed initiatives to support innovation economies within their borders. Two years ago, I watched Something Ventured, and it really got me thinking about how African governments could level up their involvement in Africa’s innovation economy. I’ll share where I’m at on that at some point.

In the meantime, what is your assessment of Africa’s wealthy investing in Africa’s innovation economy?

No. 134: Soul City: A City for Black Folk

My head is still shaking after learning that a prison sits on the land where Floyd McKissick was trying to build a city for black people.

White Flight, Urban Crisis, New Cities

Soul City was a project McKissick began working on in the late 1960s as part of an initiative at the Department of Housing and Urban Development to deal with the urban crisis in America. White Flight was taking place and the health of urban cities was not good – crime, bad housing, few job opportunities.

The initiative was to fund the development of 13 new cities to test whether the creation of new places to live was a viable option for dealing with the urban crisis. McKissick applied for the initiative to develop his idea for Soul City.

Floyd McKissick

Floyd McKissick was a leader in the Civil Rights Movement. His contemporaries included Stokely Carmichael, Martin Luther King, Jr. and Whitney Young. As the Civil Rights Movement gained steam McKissick and Carmichael pushed forward the Black Power Movement saying that the Civil Rights Movement wasn’t going far enough and things weren’t moving quickly enough for black people in the country.

The whole time I’m listening to the introduction of this podcast, I’m wondering why I don’t recall ever hearing about McKissick and well I know that there’s so much that I don’t know about the movement someone at his level I think I should have run across his name and not exactly sure why that is. The podcast puts forward a theory I’m not sure I agree with, but I hadn’t heard of Bayard Rustin for a long time either and he had kind of been written out of history for a while too.

Soul City, Silicon Valley, and Wealth

I was shocked to learn that Soul City had an incubator called Soul Tech One, which was focused on nurturing new companies. I couldn’t help but think about the early days of Silicon Valley, which had begun its evolution just 20 years prior. In the 75 years of so since the beginning of Silicon Valley, the billions of dollars of individual wealth that has been created is mind boggling.

Today, the conversation around the lack of presence of black people in the technology sector is at its peak. To think that someone was trying to set up the infrastructure that could have taken a shot at being significant in generating wealth through technology in the black community is inspiring. We can finish this. We have the creativity. We shape culture. We have the stamina to make it happen.

For some time now I’ve been having conversations with friends about getting black people in this country to a place where we’re operating from a position of power economically. My talking about this isn’t really what will get it done at this point. Someone I care about a lot really impacted how I look at wealth and positioning myself to build it for myself while working on seeing a bunch of rich black people in the US and Africa who can and do write checks for nascent businesses and who shape policy.

This shift in my thinking is a large reason why I haven’t been writing for the past few months. I’ve really been working hard and have made good progress, and have a couple more years to go. The past week though has been difficult and I have felt concerned about my ability to continue executing the plan. This podcast pissed me off and inspired me. Good oxygen for my fire to keep me going.

Soul City and a Prison

We eventually learn that the Soul City project failed after it lost oxygen due in part to an audit that Senator Jesse Helms ordered for the project. To this day I still feel bad for confusing Jesse Helms and Howard Coble as a kid. The two couldn’t have been more different legislators.

All these years later a prison sits on the land that was Soul City. There are countless studies on the all too familiar relationship the black community has with prisons in this country. The irony was overwhelming to hear that one of those structures sits on land that could have been home to a thriving black community – a project that could have potentially seeded more like it.

Let’s Go on a Road Trip

I’m curious to see what remains of Soul City plan to drive down there in the next couple months. Feel free to email me if you’d like to come along – kwamesompimpong@gmail.com.

No. 95: Eric Osiakwan Pushing the Growth of Africa’s VC Space

I thoroughly enjoyed interviewing Eric Osiakwan about his experience building internet infrastructure in its early days in African countries, and the transition to investing in African startups. On top of that, he is pushing to get more Africans in the investing game to support the growth of the technology industry across the continent. Here’s the transcript of our conversation.