Alexis Ohanian on his plan to back more emerging managers

Alexis Ohanian, Reddit cofounder, venture capitalist, and enthusiastic Twitter user, quietly announced a new initiative last week out of his venture firm, Seven Seven Six (776): the 776 Titans Fund. The new fund, as the firm describes it, plans to “focus on emerging managers, each with their own influential distribution channels and unique operational experience in backing start-up ventures.” The firm added in a statement that each fund will operate independently and will receive an initial $500,000 investment from 776, along with access to Cerebro (the proprietary operating system of the firm), and ongoing support from Series, an enterprise digital finance platform whose seed round was led by 776.

Already, three teams have received checks from Ohanian & Co.: Marques Brownlee of MKBHD Ventures (Brownlee has become renowned for his tech-focused videos on his YouTube channel and is focusing broadly on early-stage startups); brother and sister Allyson and Wes Felix of Crenshaw Ventures (Allyson is a five-time Olympian and founder of a lifestyle brand, and the two plan to invest in web3, metaverse and fintech companies); and Cleo Abram of Huge If True Ventures (Abram is an Emmy-nominated video producer and journalist who is looking for moonshot ideas).

To find out more, we reached out Ohanian last week with some questions. He responded to them via email.

TC: Is the “Titans fund” a carve-out of the $500 million in capital across two funds that 776 announced last month or a separate fund of funds? Also, how much money is there to invest altogether?

AO: It’s a carve-out from Fund II, and we’re investing around $10 million.

What’s the criteria for investment?

We’re looking for folks who great founders will absolutely want to make room for on their cap tables. Why? The combination of unique distribution and/or their reputation and experience. We’re looking for the things that traditional VCs don’t have. This differentiation is what the best founders are looking for — everything else is just capital.

What’s so special about Cerebro and how does it help 776 scale its operations?

Cerebro is the operating system we’ve built that we use for all the work at 776. Our team, founders, LPs (and soon, Titans) have their own logins and workflows.

I started like any good product manager and listed and ranked all the tasks I do as a VC and then sorted the most valuable ones that were most productizable and started building. First was the network — we have a massive one that founders got lots of value from, but it’s not very efficient to ask a human “Do you know someone at Twitter” for an intro. Databases are much better for that query, so our network search and intro tool was the first product we shipped, which lets founders search over 44,000 contacts anytime they’d like, request intros with one-click, and have them routed to the person on the team with the strongest relationship to that contact.

[These fund managers] will get their own access to Cerbero, which will help them be more efficient and effective at deploying capital — and it should unlock some very interesting benefits to have this federation of funds plugged into our global brain.

How many managers does the firm intend to seed fund here?

The Ancient Greeks had 12 Titans (the Olympian pantheon of gods we know today), but with the excitement and opportunity we’ve seen, it’ll be more like 20.

Would 776 invest in a nascent fund that already exists rather than help someone enter in the world of investing?

Our main focus is backing new managers. Many of them have angel invested before, but we’re not ruling out backing a Fund II.

You’re focused on diversifying the world of investing, but fund of funds efforts are obviously also a smart way to see deals that GPs might miss otherwise, so I’m wondering: do you intend for the managers to have very different areas of focus or might 776 happily back numerous other managers who are investing in web3 type deals? Relatedly, does 776 use scouts or do you plan to use scouts at some point?

We believe all of these managers will produce outsized returns — the goal here is always excellence — and many of them are going to have overlap with a generalist firm like ours, though we do a lot of web3.

Here are some themes we’ve backed so far: generalist, crypto, consumer, policy, hard tech, and construction. Thanks to Cerebro, we’ll have insights into the companies our managers are funding, but there’s no expectation or ask for them to be [scouts for us]. They’re Titans running their own funds that we’re fortunate to be LPs in.

from https://techcrunch.com/2022/03/13/alexis-ohanian-on-his-plan-to-back-more-emerging-managers/