I'm David Murphy, Founder/CEO of TechFire, recognized in Techmeme's list of nationally-significant tech conferences. Now I'm thrilled to announce the launch of TechFire Ventures to (finally!) tap the huge deal flow our events represent, and the relationships with top of VCs and founders I've built across our 55+ past events since founding TechFire in 2013.
I also couldn't be more excited about our plans to use AngelList's new rolling venture fund platform, one of the most exciting things to happen to VC in a long time (full credit to Sahil Lavingia for getting the momentum, well, rolling, on these new funds, which I believe will revolutionize venture capital — TechCrunch has a great write up if you're new to the concept). Rolling funds will let us focus on getting in the hottest startups, not the overhead of running a fund.
I got my start as a co-founder in the 1990s of chat pioneer Hotline Communications, which the Toronto Star called "a major force in the online world", used by General Motors, Apple, and millions of users. I'm a graduate of Claremont McKenna College. Before TechFire, I ran a project funded by Elon Musk, David Bohnett, Google, Uber, and Lyft.
Track Record + the Advantage TechFire's Events Give Us
For years I've said I wish we had been investing in the incredible founders and alongside the top VCs we've hosted on stage at TechFire. (Click to view a PDF backgrounder on TechFire's events.) Now we'll finally be able to.
I know how to pick winning startups — here's a sampling of founders we've hosted to speak who went on to massive exits and valuations (if only we'd had TechFire Ventures to invest in them earlier!):
- Michael Dubin, Co-Founder/CEO of Dollar Shave Club, acquired by Unilever for $1 billion
- Therese Tucker, Founder/CEO of BlackLine, IPO’d on NASDAQ @ valuation of $1.1 billion+
- Sam Shank, Co-Founder/CEO of HotelTonight, acquired by Airbnb for $400 million
- Chris Urmson, Co-Founder/CEO of Aurora, valued at $2.5 billion in their latest round
We have also built an extraordinary network of VCs, and we can't wait to tap our relationships for deal flow — we've hosted investors from Sequoia, Kleiner, CRV, Index, Greylock, Lightspeed, First Round, Upfront, Greycroft, SV Angel, BMW i Ventures, and more.
We've been heads down with events and haven't invested, missing out — it's time to leverage the huge untapped deal flow potential that TechFire represents!
TechFire's 55+ events in LA and SF have been sponsored by leading players in the ecosystem like Wilson Sonsini (24x sponsor), DLA Piper, Fenwick & West, EY, Deloitte, Accenture, Lyft, Ford and more — our relationships here are another deal flow source (particularly law firms, which have relationships with the earliest stage startups, that aren't publicly known).
Thesis & Focus
I passionately believe the opportunities for early-stage, high-growth technology startups will only continue to grow. If anything, the pandemic (while horrible) has actually accelerated the digital transformation of our work and lives, and there are massive opportunities to own the new way things will be done long into the future even after the pandemic is over. Disruption = opportunity.
The fund is broadly focused on startups across sectors that have the potential to 100x.
I'm bullish on Silicon Valley continuing to lead the way, but also a huge believer in the ecosystems in Los Angeles (#LongLA!) and NYC, and expect to some extent the pandemic will continue the "rise of the rest" as well.
Given the broad exposure TechFire's events give us across sectors, the fund is focused broadly on consumer and B2B/enterprise early-stage startups and is sector-agnostic.
We're broadly interested in consumer startups and B2B/enterprise startups that disrupt poor-UX legacy competitors with products using consumer-style UX DNA.
Some specific additional sub-sectors of interest include the future of mobility (aside from the pandemic keeping us home, transportation is a basic human need, and autonomous vehicles & micromobility have been a frequent focus of TechFire summits), companies driving massive changes in how we work and live even after the pandemic, fintech, video communication & event platforms, developer tools, startups at the intersection of urbanism/livability, and so much more — we'll also remain nimble to invest in new markets as they develop too.
I will look for founders who:
- have a deep and passionate understanding of, and love for the space they are in
- have integrity (integrity is everything) and the talent, vision, passion and the character to lead and persevere
I am interested in startups whose products are:
- elegant, with a beautiful product that solves a need in a big market
- 100x / unicorn potential: growth/exit potential & market size
I remain bullish on Silicon Valley and on LA's and NYC's ecosystems primarily but am also open elsewhere. I believe the pandemic will have some effect in accelerating the rise of the rest — we're all working remotely now, so even after the pandemic's over, these tools will let companies be built remotely from Silicon Valley, although there will always be benefits for startups to be in the heart of a big ecosystem surrounded by potential acquirers, investors, partners, and employees. TechFire was founded in 2013 in Santa Monica, and most of our speakers have come from San Francisco. TechFire's deep network in Silicon Valley and LA is an asset (the LA tech ecosystem has been on fire — we had an exec from Honey speak last year fresh off their $4 billion exit), and during the pandemic, our online events have been attracting a global audience.
Deal Flow & Ability to Get into the Best Deals
Founders (and investors) know me:
- Founders respect me because TechFire's 55+ events since 2013 have all been about one core mission: helping support them with the tools, strategies, and inspiration to start and grow their companies, and grow the startup ecosystem.
- TechFire has given me a high exposure role in the ecosystem and an exceptional network.
Founders will want me on their cap table:
- I am a founder. Founders want to raise money from founders. I'm empathic to their needs, realities, and wellbeing.
- I can leverage TechFire's community and network to help portfolio companies.
TechFire’s events = a deal flow driver
We will source deal flow from our relationships with the top tier VCs and founders we've hosted across our 55+ events, plus the ongoing publicity our TechFire events give us. Our events will drive deal flow in numerous ways:
- mindshare in the industry: our ongoing events drive startup ecosystem awareness of TechFire among the ever-new group of new founders entering the market
- our events allow us to cultivate relationships with VCs and founders (who speak at our events) to have them refer deals to us — we already have a huge network from our 55+ past events, and it keeps growing with each new event
- pitch events — our pitch fests (which have featured prizes from Google) are a natural deal flow tool too
- potential to invest in our speakers directly: we’ve had multiple speakers go on to unicorn status or billion-dollar exits — if only we’d been able to invest in our speakers earlier! And similarly, we've seen our VC speakers go on to many more great deals, that we wish we could have been co-investing alongside with them in.
TechFire’s events = a value-add for portfolio companies, making us more attractive as an investor: our events differentiate us from others who just provide money — we will leverage the power of TechFire’s events to help our portfolio companies after we invest:
- Speaking opportunities: gain exposure and grow, find new partners, etc.
- Help with raising Series A & beyond, leveraging our network of other VCs
- Connecting startups with mentors from among our past speakers (past speakers include experts like Casey Winters who was growth advisor to Airbnb & Tinder and Greylock's former Growth Advisor in Residence)
- Access to TechFire's community of early adopter attendees for beta testing/customer development/partnerships
- And more (we've often hosted events on tech policy with regulators, and I'm able to provide regulatory guidance myself (I previously worked in government affairs for one of LA's leading business groups and ran a policy group funded by Elon Musk, Google, Lyft, et al)).
Getting Into Deals: the Power of Persuasion
But it's not just about inbound deal flow — it's also about reaching out to get in the hottest startups. So how do I prove I have the ability to get into the best deals when this is my first venture fund? Let's look at when I've persuaded some of the most in-demand founders out there, in other capacities. Obviously, every TechFire speaker you see represents persuasion — no small achievement to get, say Aurora's Chris Urmson at the height of buzz about him to fly down (on his own dime!) to LA to speak at a TechFire conference, or all VCs from up and down Sand Hill I've convinced to fly down to LA for our 55+ events here.
But the best story involves getting Elon Musk to part with his most precious asset: his time (oh, and six figures of his money, too). Even getting the meeting was an achievement in persuasion. After meeting Elon at an event in 2012, I got his email and we traded late-night emails — he said meeting would displace critical SpaceX or Tesla work, and that there was a real (opportunity) cost. I prepared a pitch making the case for our meeting, and persuaded him not only to meet, but then to make a major donation in support.
I dare say, if I can persuade Elon to take a meeting then to give a major donation (requiring calls/emails with him to get his re-approval at each of four stages it was divided into), I can persuade mere mortal founders to take TechFire Ventures' money!
- Typically we will invest $100K-250K checks (+ pro rata) in early-stage companies with 100x potential.
- The number of investments per quarter will scale with the fund size as more LPs subscribe.
- 2.5% management fee / 20% carry (increases to 30% after a 3x return). Click here for AngelList's rolling fund fees.
- Minimum commitment: $6250 a quarter for 4 quarters (ie, $25K/year), but we hope to have LPs with us for the long term.
- Due to SEC maximums, the # of LPs is capped, so invest early so as not to miss out! Open to those meeting accredited investor thresholds (and above) only.
We're in the process of reaching out to AngelList to set up TechFire Ventures' rolling fund. An AngelList rolling fund means LPs invest on a quarterly subscription basis (with a minimum commitment as noted above) instead of a huge lump sum commitment. Because a traditional fund is typically deployed over 3+ years, this rolling fund roughly equates to a traditional fund equal to 3x(+) of the annual rolling fund size. This fund, however, will be indefinite.
Thanks so much — hope to have you be a part of the fund!
This memo contains forward looking statements. We are in the process of engaging with AngelList on the formal fund onboarding process, and once approved and complete, the full memos and closing documents will be available there.