INSUBCONTINENT EXCLUSIVE:
Venture capitalists often mutter, “I haven’t seen anything I like lately.” Founders frequently complain that “investors are
back-seat drivers who won’t get their hands dirty.” A $55 million fund with a fresh approach is aiming to address both those
issues.Steve Jang and Kanyi Maqubela are two exceedingly smart and sweet guys who couldn’t help but come up with ideas for startups
Jang co-founded music apps Imeem and Soundtracking, meanwhile serving as an early Uber advisor and angel investor in Coinbase
Maqubela worked in operations at career network Doostang (acquired by Universum Global) and solar startup One Block Off the Grid (acquired
by NRG) before rising to general partner at Collaborative Fund.Today the pair officially launch Kindred Ventures to form startups as well as
fund them.“We don’t want to wait for people to come around and solve the problems we think matter,” says Jang
“We’d rather proactively assemble an amazing team to go tackle that problem,” Maqubela follows up
But Kindred Ventures will also step up and lead seed rounds, then help startups orchestrate their follow-on fundraises.Kindred Ventures
partner and co-founder Steve Jang“The ethos is empathy — to take a very adaptive coaching and mentorship model,” Jang tells me
That means partnering with startups, not merely offering arm’s-length investing
By keeping the portfolio size low, Jang and Maqubela plan to turn concentrated conviction and outsized, hands-on effort into big stakes in
tomorrow’s top companies.“I originally wanted to call the fund Kindred Spirits, but it sounds a little too woo-woo,” Jang says with a
From multiple interviews with the team and its portfolio, though, that’s really the vibe Kindred Ventures is going for — to be the first
people founders call when they’re in crisis… whether they need answers or just some cheering up.Techno-optimismBeyond the warm smiles,
Kindred already has a strong track record from its prototype phase under Jang’s solo operation since 2014
He’d made a reputation for himself as a fixer through his advising work during Uber’s scrappy early years starting in 2009
It began with Jang writing Garrett Camp a check for his side-project
As the company blossomed without full-time employees, Jang pitched in wherever he could.After Imeem’s sale to Myspace and later
Soundtracking’s acquisition by Rhapsody, Jang made about 50 angel investments of around $25,000 to $250,000 in companies like Coinbase,
Blue Bottle Coffee, Postmates and Zymergen under the name Kindred Ventures
Instead of just throwing money around, “I’d help a co-founder — sit down and work with them on product, their presentation for seed
funding, hiring their first employees, finding a co-founder — it was quite different from how VCs operate.” Still, he wanted to lead
more investments like his favorite seed funds First Round and True Ventures while remaining a thick-or-thin squire to his startups.But to
pour that kind of sweat into the portfolio, Jang needed the help of someone who could dig deep and become an ally to founders in any
He needed someone like Kanyi.After his stints in operations, Maqubela went on to work at Collaborative Fund for seven years, rising to
partner at the firm looking for the intersection of positive impact and profit
He tells me developed a thesis about “what does it mean to be a techno-optimist?: to believe that technology is amoral but can be oriented
towards good.”Maqubela’s super-power is learning
I knew him from Stanford, and now the same reputation precedes him through his portfolio of angel investments like Earnest and Buffer
He’ll immerse himself in any topic or industry, read and call people until he truly gets it and then wedge his entrepreneurial skill set
into the cracks to firm up an idea
Still relatively new to venture, Maqubela was seeking someone with a well-worn process for investing and a big heart for what founders go
He was looking for Steve.Kindred Ventures partner and co-founder Kanyi MaqubelaThe coincidental co-investors became friends, then
deliberately funded startups side by side, and now are taking the leap as Kindred Ventures
Together they want to redefine “What does it mean to invest at t=0?
What do they really need?,” Maqubela says.The plan is to fund about 25 companies through pre-seed and seed per fund, which they’ll raise
Kindred is vertical agnostic, but it has a soft spot for the future of cities, work and living
It’s also keen on marketplaces, material science, food innovation, deep tech, enterprise SAAS and developer tools.Jang and Maqubela are
learning from each other day by day, at home and in the office
They’ve each got their own toddler son to juggle alongside Kindred
Added responsibility seems to have made both of them conscious of how each minute counts, no matter who they’re with
The result is you’ll often hear the word “nicest” whenever people describe the pair.Get in formationSo far Kindred Ventures has funded
nine startups from its $55 million initial fund
It’s helped form two companies and hopes to do four to eight per fund
But Kindred won’t be taking founder-level equity in those
Instead it just wants the opportunity to lead the seed round and own 10% to 20% by the time of the Series A.That makes Kindred Ventures
distinct from most startup studios like Atomic that aim for bigger ~30% stakes
“The Studios are creating whole platform teams, services teams, only work on their own ideas, and own a considerable amount of equity,”
By leaving more shares for the real CEO, “We’d be able to work with a stronger profile of founders” while avoiding spending so much
time per company that the model becomes unscalable
“We’re there at the formation of the company, but it’s not our company.”Kindred’s two formations come from the disparate medicine
Maqubela became an expert in cardiology to help start Heartbeat, which does in-person and remote heart-health diagnostics
“I have a clear bullshit meter for when non-healthtech people try to get into it,” but Maqubela really figured it out, Heartbeat CEO
Jeff Wessler, MD, tells me.On his experience with Kindred, “It’s ‘we’re there for you when you need us’ rather than ‘we’re
there for you when we fund you and then we move on,’ ” Wessler says
“Very quickly this evolved into Steve and Kanyi being my absolute numbers 1 and 2.” The investors gave Wessler Entrepreneurship 101
coaching, provided Heartbeat’s first funding and helped it build a team
With their help, the first-time founder has sidestepped common pitfalls and is already turning patients into customers with its $2.5 million
in funding.Bitski, a blockchain app login platform, has quickly leveraged Kindred’s support with formation into big funding from top
Bitski CEO Donnie Dinch tells me, “In the early days, Steve would be in the office with us, late night jamming on ideas around the
evolution of the blockchain space, fundamental products that needed to exist, early use cases etc
There’s a lot of money available for seed-stage projects, but it can be difficult to find an investor willing to grind with the team
through the days of pre product-market fit.”Bitski actually started as collaborative video production app Riff
But Jang and Maqubela’s advice helped it solidy pivot into developer tools for decentralized apps
It’s since gone on to raise $3.5 million from SV Angel, Coinbase, Galaxy Digital and the Winklevoss twins
“The collaborative tone of the relationship really stands out,” says Dinch of Kindred
“Obviously, operating with a high-touch model can take more of the partners’ time, but we haven’t noticed any drop in availability or
support.”Plenty of funds talk a lot about getting their hands dirty
Often that means hiring big teams they can assign to help founders, though, while the partners focus elsewhere
With just two support staff, Jang and Maqubela don’t have that luxury
They’re in constant contact with their investments by WhatsApp, phone and email to work through snags directly.“They’re always super
responsive,” says Michael Karnjarnaprakorn, co-founder of collectibles investing startup Otis that was backed by Kindred’s prototype
He cites three big value-adds
Strategy: “Anytime I’m thinking through a big decision, I call them to help me think through it,” including fundraising and product
Network: “They have an extremely strong network and are usually one to two degrees away from anyone.” And “everything else,” from
mentorship on founder psychology to company building.Undertaking such intense involvement in their whole portfolio would likely surface
concerns about a green VC
But “Steve has essentially been doing this for a decade or so not formalized, so I don’t see any reason it can’t work,” says one of
Kindred’s stealth startup founders Brian Norgard
“As companies begin to scale, my sense is they will be less effective because that’s a different game that’s more on the operations
Still, I see a lot of value that can be created in the early innings.”Kindred had a sort of grit and passion for early-stage founders and
teams that we thought would give us an edge as we started to grow quickly,” says health insurance company Catch‘s co-founder Kristen
Tyrrell.” They have been genuinely interested in our mental health
Having Steve fly in to take us to dinner and tell us we’re doing OK is surprisingly meaningful when you’re fighting on every side.”NEW
YORK, NY – MAY 10: Kanyi Maqubela of Collaborative Fund speaks onstage during TechCrunch Disrupt NY 2016 at Brooklyn Cruise Terminal on
May 10, 2016 in New York City
(Photo by Noam Galai/Getty Images for TechCrunch)But being high-touch and concerned with entrepreneurs’ well-being doesn’t mean becoming
“Founder empathy is not always founder-friendly,” says Maqubela
“It’s being able to disagree with founders, even very passionately, and still constructively working together
To be able to tell them they’re wrong but come out the other side.”That means Kindred Ventures isn’t for every founder
Those who want their investors firmly belted in the backseat or locked in the trunk may want to look elsewhere for cash
Smart founders will take all the help they can get, and Kindred strives to give the most per dollar
Jang concludes that, “The idea may come from them or come from us, but we want to back amazing founders on a mission
It’s scratching both itches for us.”[Image Credit: Jill Baker Photography]
