Venture capital investment has been seeing an all-time high in activity this past year. According to the National Venture Capital Association, $150 billion has been invested in startups in the first half of 2021 alone. Alexis Ohanian, co-founder of Reddit and new venture capital firm Seven Seven Six, believes that this isn’t just a trend. In an interview with Wharton Business Daily, Ohanian discusses the surprising business opportunities brought about by the pandemic and the importance of investing in what you believe.
1. On the exciting prospects of venture capital and tech today:
“It is unlike anything I have seen in 11 years of doing the job, and in 15 or 16 years of being in tech. It’s an amazing time to be allocating capital in startups because the rate at which they can grow has never been faster, and the impact which they can have has never been greater. The world, post-Covid — although we’re not totally post-Covid — but this world, as it’s starting to open up again, has realized just how much software is vital to every industry, every business, and that bodes very well for people building software-enabled companies.”
2. On navigating the FAANG ecosystem and supporting the rebels:
“I’m really of two minds where I think, look, I make my living funding the rebels. Instacart (for example) — I remember I was on CNBC the day that Amazon bought Whole Foods and everyone looked at me and was like “Alright, smart guy, what’s your company going to do now? Instacart is doomed!” I said what Apoorva Mehta (CEO of Instacart) had been talking about just a day earlier, which at the time I believed, but now we’ve seen to be incredibly true. ‘This is the best thing that can actually happen because every grocer (…) realized now they had to work with Instacart, or Amazon Whole Foods was going to eat their lunch.’ So in a lot of ways, the existence of these empires create the business model for the rebels.
There is an important role that gets played in these ecosystems simply because the FAANG (Facebook, Amazon, Apple, Netflix, and Google) companies occupy so much oxygen. They have so much power and so much leverage. I’m most interested in the rebels always having a fighting chance, not just because it’s my business and my livelihood, but also because I think it’s better for innovation.”
3. On investing in sports:
“Sport is the ultimate asset for entertainment to capture attention. So of course I want to invest all across it, whether it’s the women’s football club, which is really just a media content and community business, or trading cards. I’ve got to be one of the biggest investors in women athletes because I think that’s the epitome of how undervalued they are. (…) I think it’s going to be a really great investment, and I just think in particular I want to live in a world where my daughter can get paid just as much as a guy for her work, and I think like a lot of folks who want that world.
In the meantime, the more efficiency we can create in the market, the more that’s going to reflect reality, and these platforms — whether it’s Angel City FC or others — are building the connective tissue to make supply meet demand. I think folks who have been investing now are going to be pretty pleased for the next five or 10 years.”
— Gemma Hong
Posted: July 26, 2021