INSUBCONTINENT EXCLUSIVE:
Five years ago, Alexia Bonatsos, née Tsotsis, was co-editor of TechCrunch, a job that made her renowned in startup circles and familiar
with a wide number of startups and their founders
What she really longed to do, in fact, was invest in some of them.
&I was among the first people to write about Pinterest and Wish — when
it was known as ContextLogic — and Uber and Instagram and WhatsApp,& says Bonatsos
&I started to wonder if I was in the right place at the right time — so, luck — or if I&m in the right information flows
I was curious: What if I&d been writing checks&
She talked occasionally with venture firms, but the right job didn&t materialize
So she set to work on creating her own dream job
Her first move was tostep down from her post at TechCrunch in 2015 to enter into an accelerated, one-year master degree program at Stanford
University business school
(&I wanted to be able to communicate in the same language& as other VCs, she says with a shrug.) All the while, and in the year afterward,
she was talking with founders about how to tell their story and shape their editorial and convince people with large followings that they
are worth tracking — skills Bonatsos had herself honed as a reporter.
She wasn&t building out her network merely to stay connected; she
was also slowly piecing together checks from individual investors for a debut venture fund
Toward that end, last December, she registered her San Francisco-based firm, Dream Machine, with the SEC, listing the target amount at $25
million.
If she has reached or is nearing that number, she won&t say out of an abundance of caution around securities regulations
(This is what happens when business journalists become VCs.) Still, when we caught up with her recently, she disclosed that she has already
made seven investments, including as part of one token sale
She also shared a bit about what they have in common, which seemingly centers on two things: they involve the ever-growing sharing economy,
and they take advantage of an overarching trend toward decentralization.
One of those bets, for example, is TruStory, which we&d written
Founded recently by an alumna of both Coinbase and Andreessen Horowitz, TruStory is creating aplatform for users to research and validate
claims that people make online, whether in a blog post, whitepaper, website or social media post
It creating a &real system of information hierarchy with the blockchain,& says Bonatsos, whose co-investors in the company include True
Ventures and Coinbase co-founder Fred Ehrsam, among others.
Another of Dream Machine checks has gone to Omni, a four-year-old, San
Francisco-based on-demand storage company that making every possession in one home rentable— giving members an opportunity to make money
from their underused items in the process
By way of example, Bonatsos recently rented a dress that a fellow investor had worn once and stored away
Omni photographs each item and allows users to designate friends who can rent them
Users can also rent their belongings to strangers if they choose.
A third investment, in Fable Studios, perhaps best underscores Bonatsos
ambition to invest in &founders who turn science fiction into non-fiction.& The startup — created by former members of the Oculus Story
Studio team — took the wraps off what is essentially a studio for augmented and virtual reality content this year at Sundance, where it
premiered one of its first projects: an animated three-part series called &Wolves in the Walls.& (You can check out the trailer here.)
The
company hasn&t disclosed how much it has raised to date, but others of its investors include Shasta Ventures and founder-investor Joe
Lonsdale.
Asked how she drumming up deal flow, Bonatsos suggests she isn&t shy about networking like a maniac
(We spied her at an industry event last night, in fact.)
She also points to the small but growing number of people who are similarly raising
and managing funds as solo general partners, and who are forming collaborations and sharing lessons in the process.
Some of these include
Product Hunt founder Ryan Hoover, who is currently managing Weekend Fund, a $3 million fund that has backed roughly 10 startups since last
year; Niv Dror, an early Product Hunt employee who is now investing $3 million through a vehicle called Shrug Capital; and Boom Capital,
which is a pre-seed fund for &deeply technical, under-networked founders& founded by Cee CeeSchnugg, who previously spent 4.5 years with
Eric Schmidt Innovation Endeavors fund.
Yet a fourth new, seed-stage fund is22nd Street Ventures, launched earlier this year by Katey Nilan,
who&d spent the previous six years in a variety of marketing and public relations roles.
Whether all of these seed-stage funds, including
Dream Machine, can survive, let alone thrive, remains an open question, of course
As a VC at a well-regarded seed-stage fund told us just yesterday, seed-stage funding is &insanity& right now, with so much capital in the
ecosystem — between established seed funds, accelerator programs and so many burgeoning funds — that it growing harder by the day to
obtain a meaningful stake in a promising new startup.
Bonatsos, who expects most of her initial checks to average around $300,000 and is
willing to invest in both first-time and serial founders, doesn&t sound concerned.
She has her intuition, a vast network of founder contacts
and support from fellow seed investors
She also argues that she prepared to invest much earlier than many others.
&I can suspend disbelief and get on board with a wild vision,&
As she knows, having been immersed in the startup universe for many years, &Non-obvious deals are where you make returns.&
