Axios Pro Rata: ☀️ Dispatch from L.A.

Plus: Talking with Airtable's CEO | Saturday, March 05, 2022

Open in app View in browser   Presented By Blackstone   Axios Pro Rata By Kia Kokalitcheva ·Mar 05, 2022 Welcome back, readers! I really enjoyed meeting some of you this week at the Upfront Summit 😃 🚨 Reminder: Feel free to send me tips or comments by replying to this email or on Twitter @imkialikethecar. Today's newsletter is 1,042 words, a 4-minute read.     1 big thing: Old and new collide in Los Angeles Illustration: Sarah Grillo/Axios   Los Angeles served as a backdrop this week for the juxtaposition of startupland's old and new. I spent a few days there for the annual Upfront Summit, and meeting with local startups and investors. Why it matters: The past two years have been a period of rapid change as the venture capital industry decentralized geographically and nascent sectors boomed amid unprecedented investment activity and valuations. And while some have jumped headfirst into flourishing trends like Web3, the creator economy and virtual worlds, others remain more skeptical. State of play: From the conversations both on and off the stage at the Upfront Summit, as well as in my one-on-one meetings, a few key threads emerged: Web3 is hot: Everyone's talking about it — from celebrities like Paris Hilton to the limited partners milling around the conference. One veteran LP even mentioned the blockbuster returns from crypto her firm saw in recent portfolio data. Another, hailing from a big foundation, whispered that he recently invested in two big crypto funds. …but not everyone is convinced: Some longtime LPs expressed continued cautiousness. Despite the sector dominating headlines over the past year, there's still skepticism. Many have some exposure to the industry via existing portfolio funds that have backed a few companies, and they're happy to keep it at arm's length — for now, at least. The establishment may be old news: During a visit to the Beverly Hills location of Launch House, a buzzy new community for entrepreneurs, one of its founders revealed that most program participants aren't even familiar with the established VCs I'd be mingling with later at the conference. The young entrepreneurs want to raise from completely different investors, who they feel better understand them. (Of course, one of its own main investors, Andreessen Horowitz partner Andrew Chen, spoke at the conference.) Even some VCs aren't interested in the industry establishment: One young L.A.-based investor from a buzzy firm expressed apathy at missing out on the confab this week. "I don't think it's on brand for me," she texted. Between the lines: Even venture capital heavyweights know they need to keep up with the changing times. Sequoia Capital partners Jess Lee and Dannie Herzberg spoke on stage of the firm's belief it needs to continuously reinvent itself despite its success. (The Silicon Valley firm recently announced a digital token-focused fund as part of its new structure.) SoftBank partner Nagraj Kashyap candidly admitted that he spent some time when he first joined a year ago defending the firm's reputation in Silicon Valley as trustworthy. Meanwhile, SV Angel announced its first ever growth fund (and a new team to manage it), a pivot from both its historical focus on very early-stage investing and a 2018 decision not to raise any more outside capital. The bottom line: The faces and apps may be changing, but one constant in startupland is change itself.     2. Talkin' spreadsheets Photo illustration: Aïda Amer. Photos: David Paul Morris/Bloomberg via Getty Images   I sat down on stage at the Upfront Summit with Howie Liu, co-founder and CEO of Airtable, a cloud-based collaboration tool best known for its programmable spreadsheets. A few highlights from the conversation: On the Airtable idea back in 2011: Every investor at the time thought we were nuts. They were like, "You can build a great product, but people will not come." On going public: It's definitely on our minds — we're in the nine figures of revenue… If we wanted to, we could rush the path to going public… [But] not for the next year. On rolling out a full-fledged Airtable developer platform: The key is timing — so it's not a matter of whether, it's a matter of when. On Microsoft as a competitor: The only thing we can do is to really aggressively invest in our product and getting scale so that when it happens, we're a product that takes a really, really long time to catch up to. ... It's almost scarier to have the uncertainty of a potential future competitor … I actually feel better about the competition that we see publicly… because we know where they are.     3. Reality check Illustration: Aïda Amer/Axios   Global and societal issues were also hard to ignore this past week, especially as armed conflict in Ukraine continued to escalate. What happened: The conference presciently invited journalists Anne Applebaum and Barbara Walter to discuss Eastern Europe and civil war, respectively. Between the lines: Away from the stage, it was also a common topic of discussion among attendees. A few even mentioned an earlier story by Axios' Dan Primack about early-Facebook investor Yuri Milner, who controversially had some Kremlin-affiliated backers when he first set up DST Global. Yes, but: For the most part, the markets have had minimal reactions, save for a few sectors directly affected by the conflict, like oil and gas. Meanwhile: Racism in the U.S. — and even within the VC industry — also took center stage as wealth inequality and the lack of diversity within a number of sectors continues. Actor and producer Issa Rae discussed her early challenges in breaking into the entertainment industry, her current efforts to extend more opportunities to up-and-coming artists, and investing in businesses serving communities of color. Bessemer Venture Partners' Elliott Robinson lamented the lack of meaningful progress in recent years to diversify VCs' ranks. "There's a lot of diversity BS in venture capital — there still is," he said of firms' superficial promises and actions. Relatedly, SV Angel founder Ron Conway discussed his own belated realization that he needs to do more than philanthropy. He recently began mentoring Slauson & Co., a Black-led VC firm, for example. Meanwhile, panelists including "Crazy Rich Asians" director Jon Chu tackled the ongoing racism against Asians and Asian Americans. The bottom line: Even the California sun and Hollywood glamour weren't enough to eclipse the hard reality of issues at home and abroad.     A message from Blackstone Blackstone empowers entrepreneurs to grow their businesses     Blackstone partnered with Bumble founder Whitney Wolfe Herd to help prepare her company for the next stage of growth. Why it's important: This partnership is a model for Blackstone's approach — support visionary entrepreneurs as they build their businesses into world-class companies.     📚 Due Diligence M13 Raises $400 Million For Its Latest Fund, Sounding A Clarion Call For Real World Experience (Forbes) 'I'm Humbled by Failure': Katzenberg on What Quibi's Demise Says About Streaming Audiences (Dot.LA) VCs and A-List Celebrities Merge at This Year's Upfront Summit in Downtown LA (Dot.LA)     🧩 Trivia Los Angeles has long been home to entrepreneurs seeking to get away from industry conventions. Question: Which social media company is based there, and led the charge on some significant innovations? (Answer at the bottom.)     🧮 Final Numbers Data: Pitchbook; Table: Will Chase/Axios     A message from Blackstone What's next for Bumble in its next stage of growth     Blackstone continues to partner with Bumble founder Whitney Wolfe Herd after helping the company go public. The goal: Help strengthen the company's position as a leader in the digital connections space and as a force for women's empowerment.   🙏 Thanks for reading! See you on Monday for Pro Rata's weekday programming, and please ask your friends, colleagues and SoCal neighbors to sign up. Trivia answer: Snapchat parent company Snap. Go deeper with Axios Pro: Deals, featuring hyper-relevant news and analysis across PE, VC and M&A.   Axios thanks our partners for supporting our newsletters. If you're interested in advertising, learn more here. Sponsorship has no influence on editorial content. 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