“We invest, we incubate, we have PSPCs” – TechCrunch
Whether or not we’re at some tipping point right now, venture capitalists old and new have been very successful in recent years, with their limited partners having recorded the biggest gains in decades.
Among the new VCs to have fun with is Bradley Tusk, the political strategist, lobbyist and founder of Tusk Ventures, whose company is only six years old but whose outings already include the newly-launched insurance company Lemonade. stock exchange last July. year; the smart lock company Latch, which went public this year through a blank check company; FanDuel, which was acquired and could now become a public company next year; and Coinbase, which hosted a very successful direct listing in April. Tusk Ventures has more and more companies on the cusp of going public, too, through mergers with blank check companies, including mobility firm Bird and, if successful with the SEC, Circle Financial. .
“For me,” Tusk said. “It’s like, ‘Oh, yeah sure, it’s like that [venture investing works] works.’ And people who have been VCs for a long time are like, “No, that’s not how it works. We are currently in the middle of a crazy market. “
We chatted with Tusk earlier this week about some of his more recent bets, including that Andrew Yang would become New York mayor (a Tusk deputy was Yang’s co-campaign manager). He also blurted out that he was helping incubate a new religion-focused social network and that in the wake of a $ 300 million PSPC he formed last year, he has another in his lineup. handle. Excerpts from our conversation follow, edited for length.
TC: Because it was just in the news, I see you have been blamed by “multiple sources” in Yang’s camp who say your team was responsible for his disappointing finish in the race. What do you think of this and what went wrong?
BT: Every time you win a campaign, you get credit. So if you lose a campaign you deserve the blame, and I’ll take it, I recruited Andrew into the race because I felt like New York just needed a better option than the candidates for the campaign. town hall [and that] he could hire based on talent; he would be able to attract really talented people. But in the middle of the campaign, two things happened. First, the vaccine has become available, and violence and crime has really increased in New York City. So the zeitgeist shifted from COVID recovery to crime and violence, and Eric Adams, who won the race, had been a police officer for 22 years and was by far the candidate most associated with the ability to do faced with this problem, and my hope he will be a good mayor.
TC: With your hat as a political strategist, if you mobilized Facebook lobbyists, how would you try to respond to the testimony this week from whistleblower Frances Haugen?
BT: Obviously they don’t listen to me. But I would take a step back and stop acting. One of the reasons people don’t trust Facebook is that they keep claiming that you can have your cake and eat it too. And everyone knows that is not true. You make a transaction with them, where in order to use this free service, you allow them to monetize your data and sell it to advertisers to show you stuff. I actually think consumers can handle this tradeoff. Instead, Facebook is constantly lying and saying, ‘No, no, no, we’ve got you covered, we don’t do any of that,’ no one believes it about anything.
Facebook just needs to get up to speed with people and say, “Look, this is our business model. This is how we make money. If you want it to be free, here’s what we need to do. If you’d rather pay for a subscription, we can do that instead. ‘ I think until they do that all the spin and all the lobbying in the world is not going to change [people’s perception of the company].
TC: Do you see broader cultural changes happening in the startup world?
BT: Yes and no. When I think about what we talk to our founders about – and we talk about politics, regulation, and the media – it’s a lot safer than it probably would have been 10 years ago. On the flip side, if you’re an Uber or a Lyft – whoever it is – and your ability to function is dependent on government clearance or not or if you’re running anyway, if it’s existential, you’re always gonna take that risk. Because if you don’t take the risk, you don’t exist in the first place.
But the demise of Facebook’s reputation – and the same for Google and others – has created an opportunity to have startups that are really more privacy-focused. I’m currently working on a social media platform for religion, where it’s built by religious leaders for members of the religious community, and the idea is to be anti-Facebook and we protect your data. We don’t monetize it. We don’t even have control of it; the community manager and the leader do it, and there are therefore business opportunities to be seized [this backlash].
TC: Does “working” on this social network mean that you contribute to its construction or that you invest in it?
BT: We got the idea, we studied it, we funded the roundtable, and we are now in beta testing.
TC: Is the incubation of startups new for Tusk Ventures?
BT: This is the first incubation we have done from Tusk. We are working on a new one now in the esports gaming space. When we see a hole in the market, especially because people misunderstand the regulatory climate, sometimes the answer is to just go ahead and build it yourself. And I think we now have the infrastructure here, the talent and the money to do it. And so we started our first couple, and our hope is probably to incubate about two companies a year.
TC: You have such a range of investments. You have a men’s wellness business, Ro, a lawn care business, Sunday. I used to think of the outfit as a company that finds startups that could use your political expertise, but that doesn’t seem to be the case consistently anymore.
BT: It still is. As a start-up investor, we are looking for the same things as any other start-up investor. We take a look at the founder and TAM and the underlying technology, but we also have two other questions. First, is there a regulatory problem or an opportunity that, if addressed, could really drive growth and valuation? And two, if so, can we solve it?
Using Ro as an example, [co-founder] Zach Reitano really wanted to be able to offer people prescriptions that could be obtained by text message rather than having to see their doctor. . . and our point of view was like, yes if you can prescribe by text it will really lead to more business. Other times – take Sunday, for example – the original idea was that we would organize campaigns in really leftist cities like Portland or Austin, where we would make the use of organic fertilizers mandatory and use it for real. create a market for the product. . But it turned out that Sunday grew so fast, so fast, that they just never needed to. Sometimes you are just lucky and the political problem you think you have never really materializes.
TC: You mention having enough money to invest. You closed your last fund with $ 70 million in 2019. Is there a new fund announcement coming up?
BT: I can’t really talk about it. We invest from our third fund, and the fund you’re talking about is fund two. So, by inference, yes.
TC: By inference, based on the growth of funds in general, is it safe to assume that it will be at least double the size of this second fund?
BT: [It’s] much more important to allow us, hopefully, to conduct at least half of the transactions that we do. But at the same time, we still like to be a seed fund. We believe that every chord we make should be able to be found, and you can only take those swings at seed stage and stage A. So while on the one hand it’s good to be well capitalized, valuations are rising so much that it now takes more and more capital to be able to win business. If you have a $ 400 million Series A fund, then you need to have five Birds in your portfolio just to hit a 3x. I just prefer to raise more and more funds and have them be smaller and be able to with a few clear winners in each fund to provide a really good return to my investors.
TC: You also raised a SPAC of $ 300 million last year. You already told me you couldn’t talk about it. Out of curiosity, is another PSPC coming?
BT: There’s another one we’ve lined up. The combination of not having announced the first deal yet and the fact that the PSPC market is clearly taking a hit at the moment has forced us not to raise the funds yet. But there are plenty of places where the right regulatory expertise, combined with the right business – and this is true whether we’re incubating something, investing from the fund, or doing a PSPC – can be really valuable. It’s really limited mainly by how hard I work, and I’m willing to work pretty hard.