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"Have Fun, Play To Win": Also Capital's Master Plan
Announcing my "last startup"...building the best early-stage investment partner to the most ambitious people solving the hardest problems.
tl;dr - Starting today, Also Capital is open for business, 24/7. With the successful close of Farther Farms’ Series B and my transition into a Board role, I’m officially spending 100% of my time building Also Capital into the premier early-stage investment firm backing, in one founder’s words, “the most ambitious people solving the hardest problems.” We’ve already made our first investment and can’t wait to share more on that in the coming weeks.
Also Capital’s Strategy: “Have Fun, Play to Win”
In a recent conversation, one of the most successful founders I’ve been fortunate to learn from distilled the entirety of their business strategy to one simple phrase:
“Have fun, play to win.”
Reflecting on my ten years in venture and startups, I’ve found this to be something the best founders and companies do exceptionally well. Here’s just two small examples…
Elon Musk hiring a mariachi band to celebrate the launch of SpaceX in 2002:
Varda Space hiring a marching band on the day they shipped their first capsule:
To an outside observer, these things may elicit a Succession “serious people” reference:
However, we see this misperception as our opportunity. We love to spend our time with serious people…but more specifically, serious people who don’t take themselves too seriously (h/t Also Blog Posts, if you’ve been reading our weekly writings!). We back ambitious people solving the hardest problems, but we want them to have fun doing it…and play to win. Venture and startups are long games best played with long-term players. However, more than markets or tech or capital, we’d contend that having fun in the day-to-day in the face of often overwhelming obstacles is actually the best leading indicator of achieving the outlier success we expect of ourselves and our founders. We believe this so much that we’ve made it one of the three main things we look for in the founders we back.
It’s through this lens that we’re building the premier capital partner for early-stage founders. Here’s our three-part plan to do exactly that.
Also Capital Master Plan Step 1: Back Great Founders and Ferociously Support Them
In a fiercely competitive industry, one can only go as far as their founders will take them. Over the last five years we’ve been fortunate to back a number of exceptional founders who have been a source of inspiration for us, and whose success has enabled us to take this giant step in building Also Capital into the premier partner for early-stage founders. I’m talking about people like Doug Bernauer at Radiant Nuclear, where we were his first investor, to Will Bruey at Varda Space, where I’ve had a front row seat to one of the fastest growing deeptech businesses as a board member, to Ryan Johnson at Float Health who is a founder who will very soon be a household name! Through these experiences and relationships built with dozens more incredible founders like them, we’ve learned just how high the bar for excellence is, and won’t settle for anything less.
Also Capital Master Plan Step 2: Back more Great Founders and Ferociously Support Them with bigger checks
Over the last five years we’ve put over $4M to work in 19 companies, with over half of that capital invested in our top five performers. Among our investments over two years old we have a 100% Series A conversion rate, and for those less than 2 years old over 60% have already raised follow-on capital. Building on those early indicators of success, we’re excited to scale our high conviction, founder-aligned approach. Over the next three years we’ll be actively looking to partner with 12-15 more high potential early-stage founders (we’ll announce our first one in a few weeks!), leading pre-seed rounds with checks up to $500k with and $500k-$1M reserved for follow-on at seed and beyond. This level of concentration and focus positions us to offer the best founders something unique and differentiated…true conviction and alignment of incentives.1 As Fred Wilson said recently, “if you want to be most aligned with your investors, take capital from a firm who doesn’t have a lot of money.” Ask any of our other founders and you’ll hear that Also Capital is among their most aligned investors and fervent supporters. This concentrated, high conviction approach is difficult to execute and scale but is what gives us an edge at the highly competitive early stage. Operating this way allows us to build deeper and more authentic founder relationships that we expect will create defensibility across capital market cycles.
Also Capital Master Plan Step 3: Repeat Steps 1 and 2 for the next 30+ years :)
I’ve been fortunate to receive sage wisdom and advice from investors who have built incredible venture firms and whose ethos and approach aligns with ours. The two common threads are genuine enthusiasm and an authentic desire to help great people succeed. This business is not for short-term oriented people, and the only way to be successful is to be excited by the day to day, commit oneself with skin in the game, and build for the long term. As our friend Ray Tonsing says, “Go Long, Go Big!”
So, in summary:
Step 1: Back great founders, help them win.
Step 2: Back more great founders with the reputation built from founders backed in Step 1.
Step 3: Repeat.
Have fun, play to win, follow the three-step plan, and exceptional returns will follow.