May 25, 2022

Base 10, a venture capital firm founded just four years ago, closed its third fund with $460 million in capital commitments. With co-founder Ade Ajao, a Spanish-born half Nigerian, the new Base 10 fund, which now manages $1.3 billion in assets, is building the world’s largest black-led venture capital fund.

While that’s great, we’re much more interested in how Ajao and co-founder T.J. Nakhigian use this gap to their advantage without making diversity an explicit part of their own investment mandate. In fact, the company says it is fully engaged – and always has been – in supporting startups that help automate sectors of the “real economy” such as food, retail, logistics and fintech. In fact, by focusing only on good companies and not going after teams with some kind of “perfect” founder profile, he will naturally find his way to strong startups with very diverse teams.

Maybe. Something in Outlook is definitely working. Among the bets made by Base10 is the Brazilian fintech company NuBank, which went public late last year. (Ajao wrote this as an initial personal investigation, but says that Base10 was formed too late to invest in the organization, unless it was already a company in its growth stage.) $10 billion), Figma (estimated at $10 billion) , FTX (valued at $32 billion), and Handshake (valued at $3.5 billion) by itself. 79 portfolio companies, just to name a few.

Yesterday we spoke with Ajao, who co-founded Madrid-based car rental company Cabify before venturing into venture capital through Workday Ventures. We wanted to better understand how he and Nakhigian, an investor and former entrepreneur, built what they have in such a short period of time, and how market turmoil affects their prospects.

TK: You have long emphasized that although you are run by minorities, you do not focus on minorities. Does it remain true?

AA: It’s true. It’s really important for us to show that if you’re only trying to invest in the best companies, and you’re trying to do it with an open mind – which means background, demographics, and trying to make a geography bias – you’ll get better financials and a portfolio that’s likely to be more diversified. Other minority-run funds with a similar approach see the same thing. To me, that says more about the industry’s blind spots than anything else.

How diverse are the founders in your portfolio, and what do you describe when you use the word “diversified”? Geography? Floor?

We mean demographics and geography, and these are gender, ethnicity and your origin. At a high level, more than half of the portfolio has a founder or co-founder who is considered “underrepresented” in the companies. Most of the portfolio is outside of Silicon Valley or San Francisco.

How do you think these two parts are related? Geographically, you cast a wide net. Do you think your core lineup is more diverse or more focused?

We invest in Africa, we invest in Latin America, we invest in the Midwest. But one of the areas with the most investment is the Bay Area, where we all live, and even in the Bay Area we have a high percentage of non-traditional businesses. I don’t know why – I don’t have all the data – but one thing has become more noticeable because we had to switch to face-to-face meetings [with Zoom calls] The thing is, when we had a founder representing the whole group, they would often say, “Wow, you guys look different.” I think it has an effect.

In Latin America, SoftBank has done a lot to support the region, including, in some cases, its own investments in companies there. Is there a concern that money might dry up a little if SoftBank slows down, or that enough other investors have stepped in that it shouldn’t matter?

I founded Cabify in Latin America in 2011. And then there were my next three investments: [the Brazilian e-hailing app 99Taxis, [the Colombia-based on-demand delivery company] Rappi, Nubanks, and I passed these deals on to a few Silicon Valley venture capitalists who didn’t touch them. At the time, the partnership was reluctant to invest in companies outside the Bay Area, which was considered a disadvantage. It was like, “We’ll make a list of conditions if you agree to move to the Bay Area.” Now, over the past 18 months, I’ve been getting several emails and phone calls from these partnerships saying, “Hey, we’re going to Mexico,” “We’re going to Colombia—who are we going to meet there?” I

I don’t think so and never thought it was a SoftBank story. what I think [former SoftBank exec] Marcelo [Claure] And what his team has done is commendable. They really brought attention to the ecosystem and what other people were missing. But I think enough people are seeing the light. [In the meantime] What I like is that there aren’t many general partners in the Valley with VC firms that have experience in Latin America, and the reason I like that is because it gives us an edge. [Laughs.]

Sequoia’s Doug Lyons recently suggested that startups should be ready for some cash as market turmoil erodes investor confidence. In the meantime, we are already starting to see trimmings, trimmings, transplants. How do you feel about this time?

If you look at the amount VC has raised and withdrawn over the last eight quarters – I think it hits a record amount every quarter – that money has to go somewhere. I would also like to say that over the past two years, almost every LP has seen record amounts of cash payments from venture capital funds.

I am not a macroeconomist. I don’t know if we will enter a recession or not. I think 10 or 11 years ago when I was collecting money [for Cabify] on Sand Hill Road, day and night [compared with today]I mean, like 10 years ago, if you were doing business in Spain or Colombia, good luck. and Nigeria? I mean, it was crazy. Now, I think the cat is out of the bag.

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