A few months ago, I quietly started working on something new. Today, show and tell.
It’s a fund, done differently – on the idea that entrepreneurs and investors aren’t so different after all. And it has one, special, backer: Bloomberg L.P.
The conventional wisdom is that creating a company and investing are not at all like each other. Investors put their entrepreneurs (appropriately) on a pedestal. Entrepreneurs know their sweat just smells different.
But this wisdom seems hollow. Some of the most helpful investors in startups I see are not only the former founders and CEOs — but current founders and CEOs. Venture gets more operational every year, with some of the bigger firms building out operating divisions that look eerily like shared central services in big companies (recruiting to be sure, but also marketing, business development, even product design). First-time funds go through some of the same pains as first-time entrepreneurs. Some experienced entrepreneurs are starting invest-and-make vehicles where they take multiple bets at a time, and funding or stopping their bets — a lot like early-stage investors. I used to call my former company, IGN, a “bet factory” – probably not so different from how a venture firm would describe itself.
The investors I most admire and the entrepreneurs I most admire even have similar personalities: curious but stubborn, humble but a little renegade, deeply principled, storytellers who also can spot when a pixel is out of place.
Bloomberg L.P. was itself created by just that kind of team, and has just that kind of culture. Many of the things we now see as central tenets of startups – a team with a controversial insight on a big market (in Bloomberg’s case, that transparency would transform finance), founder control, a living memory of hard-won customers in the early years – have all been part of Bloomberg from the beginning. They invested in an open office layout and even free snacks, decades before that was “invented” elsewhere.
Feels like a place to try something new. I admire the leadership team, and can learn from them. They approached me about how Bloomberg could use investing to have a stronger relationship with early stage technology companies, and agreed the way to do it was with a true fund, investing for financial return. The best entrepreneurs want their investors to be on the same side of the table, and need a structure that ensures that.
Bloomberg Beta is that structure. We are grateful to the first entrepreneurs taking this bet with us. And today we are sharing a few: Ron Palmeri (MkII), Jon Lee (ProsperWorks), Jonah Varon and Axel Hansen (Newsle), Paul Dix and Todd Persen (Errplane), Charlie Robbins (Nodejitsu), and Zach Sims and Ryan Bubinski (Codecademy). This pioneering little group has already made this a ball.
And a wonderful team is now working alongside me. Ultimately, entrepreneurs will decide whether to work with us based on their relationships with me, Karin Klein in New York, and James Cham, Shivon Zilis, and Dan Strickland here in San Francisco.
As an investor, I’m planning to roleplay being the kind of investor I myself would want as an entrepreneur — as useful per minute spent as possible, low on the nonsense index, and aware of what I don’t know. Starting with that I don’t yet know how this will all unfold, and I’m eager to find out.
P.S. Yes, I’ll still be involved with OUYA, the first-of-its-kind “unconsole” that Julie Uhrman, Yves Behar, and gang have created — in the same way, as chairman. The investors in OUYA have already taught me much about how to support a company, and I’m planning to learn more from them, too.