M13: A Firm Built by Entrepreneurs for Entrepreneurs
The best venture investors can help make winners by providing operational and investment expertise.
Last Updated: June 4, 2021
Published: June 30, 2020
It's simple: we invest in companies to help them execute better. We purposefully designed M13 to help entrepreneurs avoid spending their days recreating the wheel for their businesses, to be anticipatory, see around corners, and grow more efficiently through the support of our wide network of resources, knowledge, and operational expertise through our Propulsion Platform and vertically-focused propulsion partners.
We built M13 to mitigate time and capital risk and to increase the likelihood and magnitude of success. Our model allows us to work hand in hand with founders to problem-solve and innovate and to create outsized returns for our partners.
We began our careers as Goldman Sachs investment bankers where we worked with major consumer companies and helped take KKR public. We then became entrepreneurs who created and later sold a better-for-you spirits company. Because of the relationships we built during that time with fellow entrepreneurs, we became early-stage investors in their companies.
The first company we seeded was Ring, and we continued by investing in companies such as Bonobos, Daily Harvest, ClassPass, FabFitFun, and grew to a portfolio of over 80 other companies, including Thrive Market, Lyft, Pinterest, Rothy's, Transfix, and the seeding of six direct-to-consumer unicorns (valuations over $1 billion) to date.
Our thesis at M13 is that just like technology was a vertical and is now considered a horizontal layer, consumer is now a horizontal layer. Technology allows companies to disintermediate traditional distribution models and go direct to the consumer, and we define consumer tech as any company that can have a direct relationship with the consumer.
As we were meeting and investing in early-stage consumer tech companies, we saw three consistent themes evolving that led us to believe a new model was needed:
The world has never been more open source, more competitive, or more full of people going after any idea. This certainly has changed over the past decade.
Today, with abundant financial capital and democratizing technologies, it’s never been easier to start or harder to scale a company. Innovative ideas have quickly become a dime a dozen.
With technologies that connect companies to their end-customer and targeted ad technology, the difference between best and second best has also never been greater. A 1% difference is now 1000x better because performing just a little better becomes magnified by technology.
Being a successful venture capital investor was no longer about just picking winners or sourcing: it’s about helping to make winners, and that’s helping companies execute better. The best companies we know are ones that make better day-to-day decisions, where those decisions compound over time, and that have some unfair advantages that create step-change growth.
It has been our experience that every consumer technology company needs to focus on six pillars: brand, product, distribution, acquisition, operations, and talent. So M13 institutionalizes repeatable frameworks, processes, resources, tools, and techniques through a constantly updated and evolving tech-enabled platform over which we overlay our full-time vertically-focused Propulsion team organized around those same pillars.
This is a flywheel model where we develop and refine the playbook by affecting the outcomes of the companies we invest in over hundreds of companies and billions of dollars. The more we invest and help companies, the more we institutionalize and the stronger our flywheel becomes.
As Series A and Series B companies are under-resourced and don’t have access to world-class talent full-time, our Propulsion Platform partners provide best-in-class senior-level experts who have an average of 20 years of experience, including significant prior experience as operators who have shepherded startups through prior crises to successful outcomes and exits. As a result, our founding teams save time, make better decisions, and more importantly avoid bad decisions—which is so critical in the early days and ever more critical in today’s uncertain and rapidly changing macro environment.
Our hands-on approach and bespoke support will have an even larger premium for our companies and for our investors, especially in this changing world where nothing will be quite as easy as it was the last few years.
When we raised M13 Fund II, we specifically targeted building an ecosystem of the world's best entrepreneurs as investors (including Richard Branson, Silas Chou, and Arianna Huffington, among many others). We have built our infrastructure to activate our ecosystem so that we can quickly connect the dots based on the needs of our companies using our NICO data system.
M13 is a constellation of incredible innovators in a network that spans every part of the business ecosystem. We see venture as unique because of the big premium on brand and reputation that are necessary to secure the highest quality deals. We believe M13 has become a leading and sought-out brand and that founding teams trust us to be a partner that brings bespoke operational expertise.
Nothing we do at M13 hasn’t been done before. We’ve just taken the best parts of the best models from the best firms out there and put them together to evolve the venture capital paradigm and thus create the next generation venture platform. We did this because in a world of abundant capital and ideas, it’s not enough anymore to pick winners—the best venture investors must help to make winners by providing operational and investment expertise.