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Protocol Pipeline
The inside story of the venture capital and startup world by Biz Carson.
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Hiring a partner used to be a secret process. Now it’s an open book.

Hiring a partner used to be a secret process. Now it’s an open book.

Hello and welcome to Pipeline. This week: Venture firms actually list jobs, goodbye golden handcuffs, and Hunter Walk's idea for an IMDbB, but for products.


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Overheard

  • "Honestly Citizen as an app simply doesn't need to exist and it's more and more apparent as the months go on that leadership is just a bunch of scum," one anonymous former employee told Motherboard after the security app had quite the week. First its CEO offered to personally fund a bounty against a person wrongly accused of arson, before Motherboard reported it was also testing its own private security service.
  • "Masa is charming and not to be feared": In an unusually candid goodbye note, SoftBank external board director Yuko Kawamoto waxed poetic about how SoftBank is "quite different" from what she had seen on the outside.
  • Get vaccinated and win a tweet from your CEO: That's the promo at Fast, which is entering employees who get vaccinated into a lottery to win $1,000 and a shout-out tweet from Domm Holland.
  • "Let's not confuse a bull market in technology with investment judgment," warned legendary investor Sandy Robertson of what he views as a very "frothy" public market.
  • Your new vocabulary word of the week: Appucino. Or, what you call those Starbucks orders that go viral on TikTok.

Biz on Biz

Now hiring: Venture partner

Hiring a new partner at a venture firm has always been a largely opaque process with no cover letters or resumes involved. Instead, many partners I've talked to have described yearslong courting where you're just hanging out, doing a deal or two together, and then suddenly there's engagement talks to join the partnership without even realizing you'd been formally dating.

"It's not clear when VCs will be hiring, and by the time you find out, they've already gone and teed up who they're going to bring in," says Initialized's (newly promoted) president Jen Wolf.

But that's changing, starting with job listings. In the last year, more VC firms have started to advertise when they're hiring a partner — a move that both increases transparency and (hopefully) diversity in the venture industry.

  • The push came last summer from Kapor's Brian Dixon, who urged firms to advertise their jobs: "If you do not publicize the jobs that are available at your venture firm, then you are intentionally being exclusionary," he wrote. "It does not matter how much Black talent is available for hire. People can't get a job that they don't know exists."
  • First Round Capital was inspired by Dixon's post to advertise its own partner search after admitting it "has not appropriately prioritized nor done the work necessary to build a diverse senior investment team." In March, it announced it had hired Stripe veteran Meka Asonye as a result.

Hundreds of people applied to Initialized when it listed two roles in April, orders of magnitude more than it would have traditionally considered, Wolf told Protocol.

  • Initialized decided to go public in its search for a new partner and a new principal (a more junior-level investing role) because it's looking to increase diversity and looking to attract experienced operators who are working at companies outside the traditional VC hiring pools.
  • Initialized received 500 applications for its principal role and around 200 for the partner position.

Advertising a job has the added bonus of forcing the firm to really think through what kind of candidate it's looking for. Initialized is a generalist firm, but partners often have special knowledge in different areas. Instead of evaluating a handful of candidates in a more personality-driven search, Wolf said the firm is spending a lot more time thinking through whether someone with fintech expertise would be an addition versus someone with health tech experience.

  • In opening up the process, it's already widened the funnel in terms of the type of people and the diversity of candidates who are applying.
  • "The funnel was just getting narrow and narrower. It's all the same people looking in the same places," she said. "To me, you need more people that are making different decisions about who to fund and you'll get better returns that way because you'll have more opportunities."

But posting a job listing doesn't automatically do the work for diversity, Wolf said, although it's a good first step. Initialized is still working with a recruiter on proactive outreach to increase the diversity of its candidate pool.

  • Wolf said it's also crucial to have buy-in across the firm so that there's no backdoor into the hiring process. Even people reaching out to its existing partners like Garry Tan trying to get a side into the role are being directed to fill out the application.

It may be a higher administrative burden to sort through the applications and run more people through the process, but it's the legwork the venture industry will have to do to progress and change.

A MESSAGE FROM LINODE

DevOps and the Alternative Cloud provides insight into the capabilities and priorities developers expect from cloud infrastructure providers. In a market where hyperscalers dominate, a small band of alternative cloud providers — which includes DigitalOcean, Hetzner, Linode, and OVHcloud — is having an outsized impact.

Learn more

Inside Track

  • Telecom companies' repeated attempts at diversification are really just "weapons of mass (value) destruction" says Om Malik who is smart as usual on the WarnerMedia-Discovery deal.
  • "Seeing a lot of startups closing big rounds in the pre-B stage, which is great for the startup ecosystem, but it seems to be getting very frothy and I wanted to share my experience from raising way too much capital for my previous company Shyp prior to finding product market fit," wrote Kevin Gibbon in a must-read thread on the perils of raising too much.
  • Noted board game buff Reid Hoffman revealed five games that have shaped his life, including the one he thinks best teaches entrepreneurial strategy.
  • Y Combinator helps companies fundraise thanks to its Demo Day. But Kabam founder Holly Liu has advice on the process of how to fundraise without YC.
  • Never fundraised before? Lolita Taub assembled a first-time founder's guide to fundraising.

Need to Know

  • Tiger Global is outpacing Sequoia. Crunchbase found that growth firms are beating traditional VC when it comes to unicorn hunting.
  • Dueling antitrust bills could threaten acquisitions. Axios thinks Amy Klobuchar's (D-Minn.) is more likely than Josh Hawley's (R-Mo.) to become law. Klobuchar's would flip the burden onto tech companies instead of the government to justify why it should be allowed.
  • Chinese CEOs are stepping down. Government scrutiny is causing tech's top leaders in China to step aside, including ByteDance's CEO.
  • Robinhood rolls out early IPO access. Now anyone can take advantage of that IPO pop. Maybe they will dogfood it with their own IPO?
  • Peter Thiel is back in politics. He's emerged as a megadonor in two Senate races, according to POLITICO.
  • From Protocol: Goodbye golden handcuffs? I wrote about how Coinbase and others are doling out one-year stock grants instead of locking in employees for four years.
  • Also on Protocol: Taxes are just the start for crypto regulation.
  • Your weekend reading: The amazing and heart-warming backstory on the woman who demonstrated IBM's Chinese typewriter.

Five Questions With...

Homebrew's Hunter Walk

Hunter Walk is a co-founder and partner of Homebrew, a seed stage venture fund that has invested in companies like Chime, Plaid and Gusto. He formerly led consumer product management at YouTube and was a founding member of the Linden Lab's team, which created Second Life.

What's your favorite pandemic meal?

I read that Goldbelly recently announced some funding after 300% growth in 2020, and I'm fairly certain that my household is responsible for most of that new revenue. We've been ordering BBQ from restaurants across all parts of the country through their platform, and it's given me new appreciation for foodies who roadtrip to find America's best brisket.

What product or service are you totally, even irrationally, loyal to?

Fancy Hands! It's a task-based virtual assistant service, which has persevered through all the ups and downs of similar venture-backed startups pivoting or going out of business. I use FH more so for weird personal requests than work-related stuff. Like if we're going to be visiting a new city with our pet, I'll ask them to make me a list of the best dog-friendly parks. The founder/CEO also seems to be a really nice, genuine person, and it makes me happy to support them as a result.

What's one way you changed working in 2020 that you plan to keep going forward?

This has been a big topic in my life recently — wanting to be deliberate about what I keep, and what I discard, from this past year. A few of our portfolio founders sold me on the value of asynchronous video/voice messages and I've been integrating this into my toolbox, too. So rather than trying to write a long email or set up time for a call, I'll share thoughts in, for example, a Loom video. This is especially useful when working with Homebrew-backed founders during a fundraise process: reviewing their deck and doing a voiceover or talking through how I'd answer some of the questions they're likely to get from VCs.

What problem do you want to see a startup solve?

IMDb for products! I've got a long-held belief in the power of teams, and it's frustrating to not be able to look at my favorite tech companies and see the "credits": Who were the teams that built these awesome products and what were people's roles? Media and gaming do this really well, and it saddens me that we haven't broadly adopted similar standards for celebrating the teams, not just the executives. It's also, in my opinion, one of the backdoor ways to compete with LinkedIn, which is oriented around individuals and their own role narratives.

What's one of the worst predictions you've ever made?

Biz, despite being one of the earlier creators/participants of a virtual currency (Linden Dollars in Second Life, the startup I was at before I joined Google), I totally misjudged Bitcoin. It was interesting to me, but I thought something like Facebook Credits was going to break through in a big way.

A MESSAGE FROM LINODE

DevOps and the Alternative Cloud provides insight into the capabilities and priorities developers expect from cloud infrastructure providers. In a market where hyperscalers dominate, a small band of alternative cloud providers — which includes DigitalOcean, Hetzner, Linode, and OVHcloud — is having an outsized impact.

Learn more

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