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Raising the Bar Even Higher for Seed Stage Founders

Raising the Bar Even Higher for Seed Stage Founders

UNUSUAL
Portfolio
8
 MIN READ
John Vrionis
November 18, 2019
Editor's note: 

In January 2018, the Unusual Ventures team set out on the ambitious mission to redefine seed investing and build a firm that would provide seed stage entrepreneurs a distinct advantage through the hardest leg of a startup journey — from Idea to Product Market Fit. My co-founder, Jyoti Bansal, and I felt founders deserved innovation from their investors based on our experiences as a serial entrepreneur and long-time investor respectively. In just under two years, we have made progress and today, we are thrilled to announce that we have raised our second fund of $400M to continue our plans to raise the bar higher for seed stage founders.

Going from Idea to Product Market Fit is the hardest stage of company building — there’s so much that needs to go right and yet, so much that can easily go wrong. Founders deserve seed stage investors who will deeply engage during the phase when they are learning how to best operate their business and be leaders. Seed stage founders need more than just money from their VC partners — they need time, energy, and infrastructure in order to make it to the next phase of their business.

By investing in a platform of services designed to help portfolio companies succeed at the seed stage, Unusual has innovated on the founder-investor engagement model in two fundamental ways, Unusual Academy and our Get Ahead Platform, to offer an unprecedented level of service and support. These services are specifically designed from first principles to help determined founders navigate the most critical seed stage challenges: recruiting the first fifteen employees, identifying the optimal initial use case and product, acquiring early customers, and messaging effectively.

Unusual Academy

An innovation on the current studio model, Unusual Academy is a hands-on, experiential learning program for entrepreneurs where we leverage our experience and relationships with world class Master Practitioners — like Andy Rachleff, Adam Grant, Jyoti Bansal, and Shan-Lyn Ma — to accelerate the learning curve for seed stage leaders. Unusual Academy is built on a “see one, do one, teach one” model and pushes founders to master the skills needed to succeed as leaders and entrepreneurs. Team Unusual has written proprietary content and run three Academies in its first two years and will continue to evolve. Here’s what two of our founders had to say about their experiences with the Academy:

“Unusual Academy is the best curated program for entrepreneurs I have taken. Each session addresses a different category of challenges that founders face in their startup journey with industry experts discussing how they faced and conquered those challenges. Very educational and inspiring.”

Henry Chan, co-founder and CTO, OrthoFX

“Unusual Academy gave the Styra team the opportunity to take a step back and come up for air. We had the chance to learn from experienced entrepreneurs who have been in our shoes and helped us obtain clarity around what is and is not important. Each session offered a valuable lesson that we were immediately able to apply to our business.”

Marco Sanvido, VP of Engineering, Styra

The Get Ahead Platform

Designed by our co-founder Jyoti Bansal based on his experiences in the early years building AppDynamics and Harness, our Get Ahead Platform (GAP) provides a new model of support for seed stage founders. Through the GAP, we provide founders with high caliber, dedicated operational resources to advance their businesses so that they can concentrate on what their core competencies are in terms of vision and building product. Each company has unique requirements that demand time and attention from an experienced investor. The GAP brings to life our belief in the importance of doing the work WITH entrepreneurs versus just giving advice. It also epitomizes our belief in a TEAM approach at Unusual. We built this platform to provide real help to founders to overcome the most difficult challenges at this phase. Here’s what a couple of our founders had to say about working with the GAP Team:

“A year ago when Scott and I founded Shujinko, we were engineers. We really had no idea what it meant to run a business, to be business leaders, and what a company even meant. Through our work with Unusual and all of the pieces of their whole offering — including GAP — I feel like we’re now business leaders and we have a vision that requires we build a product that sells, and that doesn’t include just building the technology component.”

Matt Wells, co-founder and CTO, Shujinko

“With Unusual, we get a mission-driven team that helps us with marketing, recruiting, sales development, and more. A company of our size just doesn’t have access to this caliber of resources normally, but with Unusual, now we do.”

Tarun Desikan, co-founder, Banyan Security

Portfolio

When we created Unusual, we made it our goal to work with a select group of founders who were authentic, insightful, and determined to learn quickly. We’ve been very fortunate to partner with founders who exemplify these characteristics and then some. We’ve invested in 15 core portfolio companies as part of Fund I who have access to our complete program of Unusual services. In addition, we’ve made several smaller investments in founding teams at the pre-seed stage who have taken advantage of Unusual Academy. We are delighted that we have already seen significant traction and progress from a number of our portfolio companies.

Our enterprise investments have been focused on three key themes: infrastructure software, vertical SaaS applications, and security. The founders we have partnered with are visionaries in their fields and have blown us away with their ability to build new products and execute. For instance, Omnition, a SaaS company with the vision to innovate in distributed tracing to improve monitoring, was our first investment and the team’s dedication was very clear during their time participating in Unusual Academy and their engagement with the GAP Team. In September, they were acquired by Splunk to help deliver on its mission to be a leader in observability and Application Performance Monitoring (APM). Similarly, we met Scott Schwan and Matt Wells, the co-founders of Shujinko, a company focused on enabling companies to quickly and easily configure public cloud environments in a secure and compliant manner, when they took part in our Alpha Cohort of Academy in 2018. At the time, Shujinko was just an idea. The founders embraced the help of the GAP team and in less than 12 months had recruited an entire engineering and early sales team, completed 1.0 of the product, and closed on several (evangelical!) customers. We were thrilled to lead their $7.5M Series A round in October.

In January of this year, Andy Johns joined Team Unusual to build our consumer investment practice. He is the perfect fit — amazing operational experience at iconic consumer companies, deep product sensibilities, a desire to partner with entrepreneurs at the early stage, and a genuinely gracious human being. With Andy at the helm, we have focused on three key consumer areas: social applications, market places, and fintech. Like our enterprise companies, we have been impressed by the progress our consumer companies have made. BallerTV, the world’s premier live and on-demand streaming service dedicated to amateur athletes, is set to broadcast more than 175,000 amateur sporting events in 2019. To put this number in perspective, ESPN covers about 16,000 live games in a year. Andy partnered with Chris Bennett, the co-founder and CEO of Wonderschool, a platform to help both educators and caregivers start, operate, and grow their own high-quality in-home preschools and child care programs, to scale the company, both in terms of the internal team and the educators they worked with. In the past year, Wonderschool has launched and expanded into multiple cities, including San Francisco, Los Angeles, New York, and Denver. They are also gearing up to launch in several additional cities, setting them up to be the Airbnb for childcare.

Everything about Unusual is designed to put founders first. We appreciate that we are also a startup in many ways and are sincerely grateful for all of the founders who have trusted Unusual as their early stage partner. We’re excited to continue to work with visionaries and apply this second fund to help even more entrepreneurs build and scale the best-in-class enterprise and consumer businesses.

LPs

From day one, we thought about fundraising in a way where we could be consistent with our mission and in line with our values, and those of our entrepreneurs, to make the impact we all want to make in the world. In Fund I, we made a conscious choice to seek out the kinds of institutions who would benefit most from the financial returns that successful VC investing can provide, such as non-profits, including historically black colleges and universities, foundations, endowments, and health-related institutions. This second Fund is no different in that we continued our partnership with several of our original LPs and added new partners aligned with our beliefs. We asked one of our new LP partners to share why they were excited to partner with us:

“While, as a limited partner, the Doris Duke Charitable Foundation has been fortunate to invest in some of the best venture capital firms of the last couple of decades, we continue to keep an eye out for exceptional new talent. Unusual Ventures embodies all the important tenets we, as LPs, want to see in managers we invest in by placing the entrepreneur front and center, focusing on its circle of competence, targeting exceptional returns for its LPs, believing in creating a positive community, and aspiring to be a good citizen in the world of technology by promoting more inclusion. We are excited for our participation in Fund II.”

Leena Bhutta, Investment Officer, Doris Duke Charitable Foundation

We are beyond grateful for our LPs’ commitment to diversity, values, and their confidence in our ability to rethink venture at the seed stage and offer our founders a distinct advantage.

Summary

We are laser-focused on executing on our mission of better serving seed-stage entrepreneurs and have made a lot of progress on raising the bar on seed-stage investing, but we are nowhere near done. Stakes are higher than ever before, and we will constantly strive to do better for our founders. Team Unusual will continue to grow and innovate. To everyone who has been on our relatively short journey so far — our founders, LPs, our families, and the tech community — thank you. Thank you for believing in us and our unusual approach. Onward!

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