More than 10 years ago, we saw a boom in venture capital that would form the market today. Union Square Ventures and First Round Capital would be founded in 2003 and 2004 respectively, the first seed stage venture firms. In 2009, we saw the mighty Andreessen Horowitz emerge, fighting the established core of Kleiner Perkins and Sequoia Capital, and in CB Insights’ 2016 venture final four bracket, these three “younger” firms would dominate. Now history is repeating itself as an energized youth seeks to beat the establishment and dominate their respective circles of venture. Venture was disrupted 10 years ago, and it’s happening again. These four entrepreneurs have shown repeatedly that they can deliver value for investors, founders and the world at large.
1. Josh Kushner.
Josh Kushner is managing partner at Thrive Capital. Founded the same year as Andreessen Horowitz, Thrive’s focus on media and internet investments has grown out of keeping a small amount of partners making ultra-focused investments. Kushner also founded the largest social gaming company in Brazil ( Vostu) runs his own real estate investment company and co-founded disruptive health insurance company Oscar. Other than his own personal unicorn, Josh has also taken Thrive to make intelligent investment calls, such as in GroupMe (acquired by Skype)’s seed round, Kickstarter in 2011, and Instagram’s Series B (before their purchase by Facebook), not to mention in Twitch, Slack and Warby Parker. Though the multi-talented Kushner has done many great things, he has also shown the world of venture can still be disrupted by the older style of venture.
2. Alex Mittal.
Mittal’s FundersClub, founded in 2012, isn’t to be confused with AngelList or other equity crowdfunding platforms, instead functioning as an online venture capital firm where high-quality deals are sourced for over 17,000 accredited investors. The company, officially acknowledged by the SEC, focuses heavily on quality of investments, returns and trust with their investors, which flies in the face of the worrying statement by Fortune that “ now anybody can try being a venture capitalist” under the new rules set by Title III of the JOBS act, allowing anyone to raise up to $1 million through crowdfunding. While FundersClub may operate a platform for companies to seek investment, they only select a single-digit (1 to 2 percent) of startups to appear on the platform, with top venture capital firms such as Sequoia and Andreessen Horowitz already investing nearly $1 billion in companies that they’ve funded. They also provide a community for startups that many don’t have access to unless they are the darling of the huge firms, and have taken part in several rounds in famous companies, including Instacart, Coinbase and Screenhero, acquired by Slack to fuel their videoconferencing surge.
3. Chamath Palihapitiya.
Chamath Palihapitiya is the founder and managing partner of Social Capital. The former Vice President of Growth for Mobile & International at Facebook, Palihapitiya was an angel investor even before leaving, with money in companies such as Palantir and the Disney-acquired Playdom. In 2011 he founded The Social+Capital Partnership (which became Social Capital in 2015), focusing on neglected areas of venture capital such as health, education and fintech as well as SaaS companies benefitting from the rich per-seat sales opportunity. They won big a year into their fund, having their $15 million part of a $17 million Series D into enterprise communication startup Yammer returning nicely on its $1.2 billion acquisition by Microsoft. Chamath has never been afraid of controversially calling it as it is within the venture world, such as in his late-2015 piece on what’s wrong with venture capital, and is even part of the Golden State Warriors ownership group, which he joined in 2011, during an abysmal 23-43 run which seems a lifetime away from two years of triumph. He also is one of the founders of FWD.us, a lobbying group of powerful silicon valley entrepreneurs focused on many political matters, such as immigration and education reform.
4. Sam Altman.
Sam Altman is president of Y Combinator. An early success story, Sam Altman’s mobile location startup Loopt -- that he co-founded in 2005 at the age of 19 – sold for $43 million in 2012. Even before the acquisition, Altman operated and still operates as an active investor, including his early stake in large testing company Optimizely, and has personally taken part in investments in huge companies such as Asana, Patreon and Change.org. As president of Y Combinator, of which he was part of the first class, Altman has gained popularity through a nuanced, founder-focused personality, less brash than many founders and venture capitalists, and Y Combinator co-founder Paul Graham famously said that “Sam is, along with Steve Jobs, the founder [he] refer[s] to most when…advising startups.” In the same TechCrunch article, Graham also mentioned that he had approached Altman on becoming his successor as President of Y Combinator in 2012, though it took until 2014 (and Altman reaching the age of 28) for him to take control. The well-liked Altman’s style is revolutionary in the social discourse of the valley in its lack of condescension, yet remaining fiery and empowering. For example, his points on funding startups to lower the cost of education, housing and healthcare gained him great media attention and his “Ask Me Anything” on Hackernews was, despite their usual aggressively questioning nature, positive.