Investment firm Kapor Capital released its impact report in May of this year with hopes to shake awake traditional VCs operating by the dogma, “fast growth at all costs”.
The Task at Hand: ‘At all costs’ has led to gross negligence (see Facebook, Doordash, Uber, etc.), and the birth of ventures like Juicero (RIP) and The Melt($10M for grilled cheese sandwiches???).
The Solution Proposed: Kapor Capital chooses to empower ‘varied and diverse entrepreneurs to pitch more gap-closing businesses as it believes old-school investment firms are proactively creating terrible outcomes in our world’.
Ouch.
“The conventional view is that most businesses are impact neutral and some businesses are positive—but we think that’s inaccurate,” – founder Freada Kapor Klein
The firm’s published returns show VC 2.0 has a rosy future as both measurements of portfolio performance – IRR & TVPI – rank in the top quartile of comparable venture funds.
Some of Kapor Capital’s VC 2.0 doctrines to heed:
- Silicon Valley’s pernicious myth of “meritocracy” actively exacerbates the problem of who gets to identify problems and come up with tech-enabled solutions.
- The lived experiences of underrepresented entrepreneurs provide a competitive edge in identifying problems to be solved and markets to be accessed.
The message Kapor Capital delivers to the VC ecosystem is clear, ‘eat your words‘ because closing the gaps can make you a lot of money and offer a clear conscience.
All hail a less greed-only investing approach.
READ THE REPORT
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