The Next Adventure Update
A blast from the past.
Over the last few weeks I posted a link to a podcast that I did regarding the ecosystem work I had done in Eugene for over a decade. The post had many people reached out to reconnect, talk over the state of things, and find out what I have been up to.
I had gone kind of dark on social media as my new thing is a bit different than what I had been doing, and depending on the week, keeps me really busy.
The choice I made is a reflection of all the deep thinking on my future I had done over the pandemic about who I am, what I want out of life, and where I could provide the most value.
Everyone who has been following me knows by now that I moved from Oregon back to where I grew up in NJ. I have not been able to connect to the local ecosystem to the extent that I would like.
NJ is a different beast and the startup ecosystem has no center — but as much as I would like to get more involved, my day job has kept me busy and I am kind of holed up in a sleepy beach town on the Jersey Shore (see picture above). The plus side is that I get to kayak every day that the weather allows — the downside is that I am not ‘connected’ the way I was in Oregon. In a number of ways it feels like just an extended pandemic existence as I mainly work from home.
And what am I working on at home?
I decided to join a friend of mind to launch a fund. It was not just a new fund, but given my penchant for living on the edge and choosing to do something extra hard, a new type of fund. The concept itself is fascinating and as I talk about it I will weave in the things that excited me about it, why I think it is important, and how the vision of what it will become matches what I do very well.
The company, Aventurine Capital Group, is looking to launch a fund called The Omega Fund. The concept was presented to me by my friend David Van Wie. The idea is centered around trying to extract the maximum value out of Intellectual Property. He and the other amazing partner, Michele Moreland, are the right people to do this. David and Michele know how to monetize IP — not theoretical — just like I was in the trenches with startups, these two have been in the trenches with IP.
Although the fund is going in a much more science-y direction than what I was involved in, the concept was crystal clear. IP has value. Being in video games for so long it was hammered home to me through both observation and experience that owning your IP is the real way to create leverage and create long lasting value.
The concept of IP ownership being a ‘center of value’ for a company is something that I experienced firsthand and is also the basis for some of the most world changing ideas in the past couple of centuries (think light bulbs and transistors).
David presented to me the idea of a perpetual fund that would not only fund startups but actively invest in a strategy for monetization of the associated intellectual property.
The high level concept is that the royalties from licensing of the IP create cash flows that combined with associated capital gains of the companies we would invest in creates a highly robust and resilient portfolio with multiple ways to capture value.
The functional aspects of the fund have compounding components built into the core fabric of the structure that act as a ‘turbo-charger’ for value creation.
Explaining the details of the model simply is still something we are working on — it is not a typical VC fund and has characteristics that behave more like a REIT or a highly illiquid hedge fund.
Instead of the typical fund model, this model would create a scenario that would allow us to invest earlier and have more flexibility in how we capture the value from the investment. Being perpetual from the start, we would not be subject to the same forces that drive a normal VC fund.
A new idea that could create something VC adjacent that helps to fuel innovation. I was sold.
I love innovation. I am a curious person by nature and an optimist. I LOVE meeting with super super early proto-startups. In the past year I have talked to some people working on things that are sci-fi level. I can’t talk about them due to NDA, but having your mind blown on a weekly basis by what people are working on fills me with hope for our future.
Working with early stage founders is my sweet spot. I know this. Time and time again when I asked people to tell me where they think I should be, they tell me that I need to be working with founders, that my ability to explain/excite/inspire combined with my practical ‘lets go and just do it’ attitude is the right fit.
This allows me to do that. It enables me to work on things much earlier and possibly much more risky than what I was able to do with my last fund.
It also touched on something else that is at the core of who I have become. Although my partners are in the center of Silicon Valley (side story later about how I now know of all the good food places in Palo Alto) — this would allow us to find things way outside of the normal channels.
Our fund will have us looking for early stage research at universities everywhere. This pushed two buttons for me. One, I love universities and love researchers. Although there appears to be a great divide between serial entrepreneurs and researchers, the divide is at a surface level and mostly due to speaking different languages. At the core, people doing research are like brothers from a different mother to startup founders — focused, obsessive at times, relentless, and willing to play the long game.
And they are everywhere! In college towns throughout the USA.
Anyone who has spent any time with me knows that I think that concentrating our innovation assets in mainly two areas of the USA (Boston and SF) is just poor planning. What we arrived at in terms of where our innovation economy thrives seems insane. Hey, I have an idea, let’s take everyone working on startups and place them on an earthquake fault-line (no offense to my SF friends).
This is another part of who I am. I like small towns. I was raised in one, and lived in small towns my entire life. I don’t hate cities, but I really do like the feel of a small town. Having to go to visit small college towns and look for what might be this century’s breakthrough tech is something that has a deep appeal. The ‘meta’ idea that I might be part of something that spreads our innovation ecosystem out a bit more geo-graphically just speaks to me. It is a practical solution to a problem we inadvertently created.
What will I be doing?
I am the starter of startups.
I am tasked with a new ecosystem building challenge. I am laying the groundwork for what can best be described as a virtual venture studio. I need to provide portfolio support to a bunch of new companies, often started straight out of research with people who have neither the inclination nor training to launch a startup. As the inventor of the technology is probably rooted in their community (think of a tenured professor at a university) — we can’t just move them. We need to build them in place, help them launch and grow, and at the same time work to get their IP out there for others to use and leverage.
We will frequently be working in capital starved areas (by Silicon Valley standards) so there are practical financing and staffing challenges that our studio needs to address (we will need to fill gaps).
The plus side is that we are WAY more flexible on timing and business models than most other funds are able to do (given their thesis and business model) — which means more opportunities for us. Challenges as well, but a world of opportunity where others don’t play. This has become another core value of mine, to go to places others are not.
It is not a great time to be raising a fund (in general). The past two years have sucked a bit in that regard, but being someone who started their first company right after the dot-bomb, I think that the crappy general conditions are actually perfect timing. When others are timid, be bold.
We don’t see ourselves as VC, we fill a gap in innovation funding that we believe is necessary. We also think that our model will thrive in an environment where current sentiment around Silicon Valley is not at an all time high.
So I am still involved in ecosystem building, but with a twist. I am creating a more concept based ecosystem than a geographic one. It will have me working with ecosystems everywhere as we get rolling and educate everyone on what we do and to turn the idea into a fully functioning model.
As the fund is new, the last year I have been hard at work on many of the hairy details that come out of making a new type of fund (I now know more about tax law that I wanted to know). Sorry to anyone who got on a call with me in the last 12 months if I geeked out on treasury management.
What we are doing has huge potential to be an answer for many ecosystems, to provide funding and support for commercialization of research in places that need it.
So hopefully this serves as an update. I did not totally leave ecosystem building, I just changed my relationship to it slightly. I may not have been as active writing or on social media lately, but this is because I am trying to fill this time helping founders. On any given day, if I have a choice to be on twitter or help a founder with their pitch deck, I will choose the pitch deck every single time.
This was an intentional choice. I am not out there talking about what I am doing (probably a weakness), I am just out there doing it.
For any ecosystem builders out there who think that what we are building could be additive to your local ecosystem, hit me up and I can go into some more detail.