We are not alone
originally published Dec 13, 2016 on Ekistic Ventures
When we launched Ekistic earlier this year, we knew we would have to offer something different if we hoped to earn the trust of investors and raise a fund. We don’t come from the venture space or have years of returns to point to, so why would someone invest in us over a more established group of investors? That’s why we developed a new model to leverage our unique talents, experiences and relationships in urban settings. In addition to investing financial capital in our portfolio companies, we take an active role where our unique skill sets add value. Our investors get more than just a stake in our companies — they also know that we are applying our own time and energy to make those ventures more successful.
As we near the six-month mark of investing, we’ve been pleasantly surprised at how many early stage companies see value in our model. But there are plenty of times it can feel lonely, or that you’ve tricked yourself into embracing a model that might not work.
Then you realize you’re not alone.
That moment came for me at the PIE Forum last week. It brought together the nation’s venture platforms that are implementing new investment models. There were some great folks in the room from betaworks, DreamIt, Founder Equity Fund and others. All have a model that breaks with the traditional mold. They tread in hybrid areas between funds, studios, accelerators and incubators. Nearly all of them are based outside Silicon Valley.
I heard three consistent messages:
1. Investing in great teams is a two-way street. When we invest, we want to find the companies where we believe in the company’s team, and the company’s team believes in us. Given how closely we work together, the responsibility here is mutual.
2. These hybrid platforms use their expertise to build capacity among the in-house team, rather than acting as outsourced talent. This is obviously much more sustainable because we (the investor and partner) won’t be around forever.
3. Investors appreciate exposure to innovation through the eyes of experts in a unique space (and portfolio companies appreciate a group of investors on stand-by for follow-on rounds). We found this to be particularly true as we raised our fund. Investors trust us, believe in the space, and think they can get a return — but they very much like that we’re bringing our unique vantage point to discover companies that might make good investments for them in future rounds.
My most fundamental takeaway is that there are a lot of funds showing the type of innovation that we expect to see in potential portfolio companies. That’s exciting, and shows that we as investors have the same responsibility to test new models, challenge conventional methods and create whole new industries. While most of the larger firms will fund and advise, we are part of a community that funds and builds. The stakes are higher for us, but also a lot more rewarding.