Alexis Ohanian’s year-old firm helped launch a group of funds led by individuals with large networks and domain expertise.
The future winners in venture capital won’t just be the investors on Sand Hill Road — if today’s market is any indicator. Founders are increasingly looking to bring on investors with specific skill sets to compliment their VC backers. This trend has led entrepreneurs to seek out commitments from operators, celebrities and athletes. It’s also made the question of who can be a value-add venture investor more open-ended than ever.
Alexis Ohanian noticed this change last year when it occurred to him that there were significantly more investors — each with a strategic purpose — on his companys’ cap tables now compared to just a few years ago. He wanted to make sure his firm Seven Seven Six could capitalize on this trend, but he wasn’t sure how at first. Finding and hiring these experts and one-off investors as operating partners seemed counterintuitive.
The Palm Beach, Florida-based firm is launching 776 Titans Fund, a cohort of micro funds led by individuals who are new to venture but bring a network, an operational background or domain expertise. Ohanian’s firm is writing an initial $500,000 check to each new fund and giving them access to Cerebro, 776’s inhouse operating system that contains data and the contact information of a network of more than 40,000 people.
“Can we find people who are exceptional, ideally with a big following online or a brand people want to be associated with, and operational expertise? Those are the two core factors that help establish someone as a great investor,” he says. “What made sense was to deploy capital and help these individuals set up their funds.”
Once each Titan Fund is set up, it is free to do as it pleases with 776 serving as a passive LP. Firms can choose to raise more capital if they like or launch future funds on their own, Ohanian says. “The power of demystifying startups changed my life and that's something we hope to do here with venture capital,” he says. “The outsized returns in this generation in VC are going to come from folks who have earned their right on the cap table; it isn't about brand.
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