We are only interested in investing in startups which could potentially have venture class returns. Mostly we are looking to invest in early stage startups: pre-seed, seed, and Series A. We look for high growth startups with huge or growing total addressable markets. In particular, we look for startups which product or service changes people’s behavior and creates a new market or significantly extends currently existing market.
Main areas of interest are:
- AI startups.
- Crypto/blockchain startups.
- SaaS and subscription services startups.
- Marketplaces, networks, platforms.
We believe that now is the time to invest in AI. The technology is maturing, and there is a growing demand for AI-powered solutions. We believe that the timing is perfect to invest in AI. The revolution in AI just started in 2023 with the introduction of OpenAI ChatGPT-3, which sparked a titanic shift in terms of what is possible now to do with AI which was impossible just a couple of years ago. We believe that this is just the beginning of the AI revolution, and that those who invest now will be well-positioned to reap the rewards in the years to come.
We believe that one of the main next computational platforms will be blockchain. Even though that probably majority of startups in this area will eventually fail, but a few ones would be extremely successful and provide enormous returns to early stage investors. For example, during dot com era, there were Google, Facebook, eBay and Amazon which provided huge returns to early stage investors. Mobile era brought us Uber, Lyft, Instagram and Snap. All of the above businesses were enabled by a new platform(web 2.0 internet and mobile respectively) and were impossible before. We believe that blockchain era would create startups with new unimaginable now products and business models, and the winners in that space would provide huge returns to early stage investors.
SaaS and subscription businesses have predictable recurring revenue. SaaS startups often have high switching cost associated with their product. This provides defensibility at scale.
Marketplaces and platforms often have strong network effects. Network effects provide defensibility at scale. Nfx did a study which shows that about 70% of value captured by tech companies is driven by network effects.
Fintechs with a clear market fit often can reach a huge scale.
Our portfolio companies have raised follow-on financing from some of the best investors in the world, including:
- Sequoia Capital
- Founders Fund
- Khosla Ventures
- Initialized Capital
- Draper Associates
- Jack Dorsey (Founder of Twitter and Square)
- and many others
Invest in Ride Wave Ventures Fund 1
We will try to syndicate all our deals.