The Biggest Misunderstanding About

Yesterday Pando Daily published an article about I wasn’t contacted for the piece, but I think they did a reasonably good job summing up the terms and timelines I outlined here last week.

One thing they did not get correct were the kinds of companies has been created to fund. The misunderstanding is clear from the very first paragraph:

While most VCs are busy searching for Unicorns, the mythical $1 billion and up startups that can define a portfolio, there’s a new firm in Silicon Valley looking at the opposite end of the spectrum: modest, cashflow businesses.

See what they did?

As I highlighted in my very first post, the tech industry, investors and media alike, have crafted the startup narrative to peg ambition to venture dollars raised.

Nowhere in anything we’ve written publicly or discussed privately about have we said we’re only interested in “modest, cashflow businesses”. 

The message this article, and all others in modern startup media, sends to founders is that unless you’re raising significant stockpiles of cash and giving up ever increasing amounts of your business to be controlled by outside investors, you’re not going big.

This is a dubious narrative and we’re seeing it have an ever increasing negative impact on the startup community and the vast majority of founders in it.

Big rounds of funding make for great headlines and driving clicks. But most of this capital, and these headlines, are having a dangerous effect on founders and the companies they’re building. It would be no understatement to say that the vast majority of the capital being raised today is done so out of vanity or fear, not need.

It is no coincidence that much of the new money flooding into the startup world is coming from the same banks, hedge funds and financial institutions who flooded into the housing market last decade.

With their capital and this dangerous narrative, we’re not unicorn hunting; rather, we’re becoming the subprime lenders of the internet economy funding digital McMansions built on increasingly questionable foundations.

Cash may be king, but it also comes with a price. A price that is often paid in founder morale, sacrifices in company culture and loss of control. 

Not all pay this price. This is why our narrative for has not been that VCs are evil or that no companies should raise money. That’s simply not correct. 

There are some companies who can and should raise venture. There are some founders who can manage the added pressure and input of outside investors and their expectations. And there are some company cultures that thrive with new outside influences and lofty expectations.

But we did our homework leading up to we found dozens of ambitious companies doing 10s and 100s hundreds, even billions, of dollars in revenue having never raised any meaningful outside capital. The founders are controlling their destiny, creating cultures they’re proud of in companies they control. These are cash flowing businesses, but they’re certainly not modest in their ambitions. is an experiment to see if we can fund and help support the next wave of these kinds of projects and businesses. It’s an experiment to see if all the talk of ever decreasing costs in infrastructure and distribution can lead to more profitable companies and projects scaling on customers and revenue instead of venture capital. 

As my Partner Tim said last night- yes, we’re interested in companies that can become cash flow positive, “but some of them will go big and we want to be there when they do”.

Big on their terms, not ours. 

Fueled by ambitions defined by them, not by today’s tech press.

That’s what is about.