We fund and build the future.

“The future” is fast approaching. What we thought was impossible five years ago is quickly becoming possible: cars are driving themselves, robots are keeping the elderly company in Japan, quadrotors are using computer vision to analyze crops yields in the midwest, CRISPR-cas9 can edit genes just like we’d edit a word document, and deep neural nets can identify tumors more accurately than the very best radiologists.

Unlike the “purely” software and SaaS companies we’ve seen in the first two decades of the millennium, it seems like this “Third Wave” of startups, as AOL Founder Steve Case calls it, will differ quite radically:

1. Instead of purely software applications that a college student can develop in a dorm room with no capital, it’s becoming increasingly important to actually sense and then actuate on the physical world. This requires hardware which necessitates prototype capital, longer timelines to launch, and more expertise to get started.
2. This next generation of technologies will disrupt entrenched and heavily regulated industries like healthcare/medicine, finance, agriculture, and transportation. More than ever, startups can’t simply ignore the government or larger corporations -- instead, it’ll become more important than ever for agile startups to work with governmental organizations and Fortune 500s to innovate.
3. Perhaps the most notable difference though is that this next generation of startups might not only arise in Silicon Valley. For the last twenty years or so, software was really eating the world as Marc Andreessen quipped, and it was not uncommon for a group of software engineers and serial entrepreneurs who knew nothing about the taxi industry (e.g., Uber) or e-commerce (e.g., eBay) or the financial industry (e.g., PayPal) to completely disrupt the industry.

But now in a world where information/data is king and where the all the algorithms for machine learning are open source, it’s less about what algorithms you’re using, and instead more about what data you have access to and what application you’re applying the algorithms to. In this case, domain level expertise is extremely important; in other words, it probably won’t be a 30-year-old male engineer who graduated from an Ivy League school, lives in San Francisco, and ran an e-commerce company in a past life who will create the next billion dollar AgriTech company. Instead, it might be the state school educated son of a farmer who lives in the midwest, really understands agriculture, and who has access to tremendous amounts of data about his crops.

Currently, most VCs are looking for startups in metropolises like Silicon Valley and New York. The kicker is that they’re doing nothing wrong--because of network effects and a prior knowledge base of “how to do it,” places like Silicon Valley have been by far the best place to startup so every founder wants to go there. But the world is fundamentally changing.
 

Once we find great companies through our partner network, we’re going to do everything in our power to help them succeed and to counter the intrinsic economic changes we’re seeing. For example, because of the fundamental necessity of startups and Fortune 500s to work together in this next wave, we’re going to host quarterly Corporate Connect days where founders can pitch and build relationships with Fortune 500 corporations and governmental organizational leaders like DARPA / FDA / FAA for future partnerships, funding, purchase orders, or even potential acquisition targets.

And equally important, our partners are going to get down in the trenches to help founders succeed. These days it seems like every seed/pre-seed fund offers “advisors” but something we noticed when founding our own companies is that oftentimes these relationships are aloof monthly ordeals. With Prototype Capital, our managing partners Nandeet and Rajat are both founders who understand the intricacies of building companies since we've done it before and will be on call 24/7 to help make day-to-day decisions like “which engineer do I hire” or “how do I effectively hold meetings.” Similarly, our venture scouts -- also successful founders -- will contribute a set number of hours of design/engineering/recruiting work each week.

Founders are really the fountainheads of innovation and we’re dependent on them to push our world forward. We’re excited to not be “just another fund” but rather an organization of people working to build the future along with founders.