#009 Initialized Capital

It’s rare that a Venture firm invests in 27 unicorns in just 12 years of its existence. It’s even rarer that a venture firm invests in 27 unicorns all at the seed stage, even when it’s just a founder and an idea. It’s EVEN RARER that a firm turns a $7 million fund into over $2 billion in distributed capital for LPs. Put all of those rare feats together, and you get one of the best, if not the best, early-stage VC firms: Initialized Capital.  Since its founding, the general thesis of Initialized, as described by founding partner Garry Tan, is as follows: “The coolest thing about initialized has always been being able to believe in Founders before it's totally obvious because that literally is what you have to do in order to create returns that nobody else can get. You have to believe in Founders maybe when they just have a demo, and they have an early idea that there's a problem that we could solve.” That is how you can achieve billion-dollar returns on less than $7 million of invested capital – by backing founders at the earliest possible stages – the highest risk taken for the highest reward.  In this essay, we’ll look into many principles Initialized has of backing builders, backing founders they’d want to work for, and attacking an opportunistic market with a very non-consensus idea. These theses, among others we’ll explore today, led them to invest in 27 unicorns, including Flexport, Cruise, Opendoor, and Patreon, among three other companies valued at over $7.5 billion, which we’ll discuss today. These companies are a few reasons why Initialized is regarded as one of the best pure seed-stage investors of all time and is quickly growing.  Today, we’ll investigate why Initialized invested in Coinbase, Instacart, and Rippling. We will also dive deep into the firm’s general investment theses, what they look for in founders, what traits make good VCs, and some general advice they have for founders. At the end, rather than our traditional Anti-Portfolio format, since either Initialized has no major mistakes or just has never spoken publicly about them, we’ll explore three mistakes Garry Tan has made personally in his startup journey that include key lessons for founders from a first-hand experience.  To read this podcast in an abbreviated format, check out the substack: All Things VC. It has the same content as the podcast, just a little more direct with less improv. To read more about a16z, along with several other companies they invested in that we didn't discuss, more on their general investment theses, what makes a good VC, what they look for in founders, and general advice for founders, head to allthingsvc.blog to read more. You can also follow me on X at Justin_Pryor_ for more nuggets of information that I post throughout the week based on what I talked about in this episode. Likewise, you can find All Things VC on YouTube to see clips of these episodes separated by each major topic I discuss. Intro Music: High St. by Alex Dethero

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