Being a first Follower.
"The First Follower is what transforms a lone nut [aspiring fund manager]
into a leader”
-- Derek Sivers, How to start a movement?
The first follower is an underestimated form of leadership in itself. We believe the first follower transforms a lone trailblazer into a leader and an idea into a success story.
Our purpose is to drive capital to conscious capitalism to create a positive impact in this world. We do that by being the first follower of conscious & diverse fund managers, venture builders, and capital allocators.
Until now, impact investing and investing for profits have been very segmented. We want to bridge it by bringing the focus back to the basics, i.e., capitalism can consciously solve the world's problems if we back the right people and initiatives.
“I think we desperately need finance to be humanized. That’s part of the problem today: People perceive it as a complex topic that is not accessible.”
- Mihir Desai
WHY EMERGING Fund & Venture studio MANAGERS?
Performance: Most emerging firms raise smaller funds than their established counterparts. Smaller VC funds generally outperform, because a single outlier can generate stronger fund-level performance. Preqin’s analysis showed a consistent 3% outperformance in IRR in several vintage years.
Alignment of incentives: With smaller fund sizes and no prior funds paying management or incentive fees, first-time managers need to produce returns to get paid beyond a minimal salary.
Newer Models, Rethinking Industry: Emerging managers generally rethink strategy, process and objectives to support entrepreneurs. They promote better-suited, more impactful, and more efficient venture fund models. And they tend to specialize more narrowly, becoming more adapted to the increased sophistication and specialization of the venture space.
Pipeline diversity: Access to a unique pipeline, especially if emerging managers come from diverse backgrounds.
And most importantly: Timing: While since the onset of the COVID crisis, established VCs have focused on padding the balance sheets of their existing portfolio rather than taking on new risk, it is at major hinge points in history like now that the most exciting new investment opportunities appear.
Why venture studios are promising?
There are two arguments to it:
Financial Performance: The three distinctive characteristics which make it attractive are:
Increase ownership in the venture
Increase participation in the enterprise, and hence
Increase the chances of success. The exit rate is higher in studios (~ 35%) than in accelerators (~ 20%), which seems to confirm that a venture created by a studio fails less often than any other venture. According to the GSSN, a studio startup can achieve TVPIs of 10.
Impact: Build tech-ventures in the spaces that are generally ignored by tech ventures and entrepreneurs, as they are still catering to the top 1% of the population.