Venture capitalists create billions in a new world of work

Venture capitalist Brian Kimmel says investing in projects requires a certain mindset.

“The best vulnerabilities are very suspicious, and they’re always looking for what’s next or what we’ve missed. A big part of what we do is research,” Kimmel said.

For Kimmel, who launched Worklife Ventures in late 2019 in Los Angeles and has since raised two funds totaling $45 million from prominent backers Mark Andreessen and Zoom Video Communications CEO Eric Yuan, much of that research focuses on balancing work and life. In the United States, hardly the workaholic syndrome that occurred in previous technological booms. The effort came before Covid led to a greater societal reckoning of the nature of the traditional workplace.

Kimmel, 34, said: “Many of my first investments were to remote work teams and help founders build the tools to work from home and have a more flexible lifestyle. This started as a passion project as an angel investor. I talked about remote work before it even started. epidemic.”

Scaling Small Businesses for Freelancers, Entrepreneurs, and Innovators to work remotely and productively, making connections beyond the traditional office, Kimmel’s Worklife Ventures has invested in 50 startup companies. Nine of them have been valued at more than $1 billion, including virtual events platform Hopin, website builder Webflow, and audio-based social app Clubhouse.

Based on its network of contacts honed from running the startup initiative of business software company Zendesk, the VC makes about 20 new investments each year, in the $1 million to $2 million range. “Now we have a bunch of companies that are changing the business,” Kimmel said. “Kids today would rather be YouTubers than astronauts.”

Even as workplaces reopen, more workers are choosing to stay home where they can be productive and balance jobs with their personal lives, according to a recent survey by the Pew Research Center of nearly 6,000 adults. Roughly half of them would start looking for a new job if they had to return to the office full time, according to a survey by Worklife Ventures of 575 employees at tech companies.

Remote work should continue to be a major factor in the labor market, but maintaining momentum — and valuations — from the pandemic rebound while facing a tough economic climate could be a challenge for Kimmel, who has run Worklife Ventures solo for two years. It recently shed two directors and hired former Zendesk colleague Linda Lin to work with founders on entry strategies, including revenue operations, growth, monetization, and expansion. Clubhouse and Hopin both raised major funding with valuations of more than $1 billion, but these once-hot newcomers have since cut staff amid the slowdown.

In a letter to its investors covering the cost cuts, Kimmel said the cut in marketing spending was a result of the overall climate and that the venture capital firm “will spend the next two quarters building deep and robust playbooks for founders.”

Worklife Ventures holds weekly meetings for the founders of its portfolio company to get advice from successful Silicon Valley operators.

All of this is far from growing up Kimmel in Youngstown, Ohio, in a working-class family of immigrants from Ukraine who worked in the city’s steelwork and auto industry. Like Youngstown, which is moving from rusty industries to technology-led companies, it has found new horizons in the digital world. After graduating with a degree in journalism from Kent State University and was eager to get away, she arrived in Sydney and spent five years working in an advertising agency. Back in the US, she landed a job in San Francisco at Expedia, where she took social media jobs for three years, taught classes at the Entrepreneurial Education Organization General Assembly for four years, and ended when she renamed the courses to her own entity, SaaS School, Bi-annual workshop for entrepreneurs to learn from fast-growing software companies. Her concept for Worklife Ventures was developed at Zendesk, where she spearheaded startup programs and built a base of accelerators, incubators, and venture capital firms.

Kimmel, boyfriend of actor Jimmy Yang, is a superconductor. She has a network of 30 thousand friends and fellow professionals and 80 thousand followers on Twitter. Worklife Studios recently opened in the trendy Silver Lake district of Los Angeles to hold events and salons for techies, artists, and creators—and as a way to differentiate their approach from the traditional office, as well as the VC dinners traditionally used in industry networks.

It was almost natural to get started in angel investing, but the spark came after reading the book “Startupland” by Zendesk CEO and co-founder Mikkel Svane about his experience building a company. She wrote small checks between $1,000 and $5,000 in early-stage startups, and helped the founders reach heavyweight investors like Andreessen Horowitz and the Founders Fund to scale their small businesses. At a corporate event, I met VC Christoph Janz, an angel investor in Zendesk and managing partner at Berlin-based Point Nine Capital. Kimmel pitched it on her idea for a fund that focuses on reimagining work for individual fulfillment, investing in tools like podcasts, influencer adoption campaigns and community platforms to help freelancers and creators become entry-level and pursue careers of their own making. Janz invested in Kimmel’s first fund in 2019.

“She’s intellectually curious and interested in new technology, and she also has the ability to build relationships with the founders, and she’s hard working,” Gans said. “She’s been able to invest in some great companies, they have a good pulse about the future of remote and blended work and the need for modern tools for people to collaborate, and that has accelerated dramatically. She had a good vision from the start in 2019, which is getting healthier.”

Kimmel was the lead investor in Heylo, which was formed in 2019 by two former Googlers Eric Winters and Brandon Pearcy as a platform for community group leaders to manage memberships, payments, plan events for social activities, and collect commission on receivables. The San Francisco-based startup has grown to 1,000 communities and attracted $1.5 million in project funding, led by Precursor Ventures.

“We met through a friend and an investor, and it looked like we could finish each other’s sentences,” Winters said. “Brian lives and breathes what this space is all about. We have a shared vision of what the future will look like.”

Kimmel also invested early in San Francisco-based Deel, an employee management startup that launched in 2019. Started by tech accelerator graduate YCombinator Shuo Wang, Deel provides remote companies with HR functions such as payroll and employee benefits based on getting help from external sources. Dell generated $100 million in revenue over a 20-month period ending in March 2022, is growing 12 percent month over month, and has 10,000 client companies in 160 countries, according to Wang. Deel has raised more than $680 million since its inception, and its valuation rose to $5.5 billion in October 2021 with Andreessen Horowitz and Cato Management.

“She contacted us when we were at an early stage,” said Wang. “She is very professional about the future of working and teleworking.” “She’s very involved in helping us recruit people and build relationships with other companies.”

Kimmel has also tapped into another outsourcing startup, Pietra, and invested early. Headquartered in New York, Pietra offers founders a fast-track to getting off the ground, with tailored products from factories, e-commerce sites, and networking with suppliers.

“We got out of beta last November and improved 100 times and helped 50,000 creators scale,” said Ronak Trivedi, CEO of Pietra, a former Uber product manager. Pietra raised $5 million in 2019 led by Andreessen Horowitz, followed by $15 million in August 2021, with Founders Fund at the top at a valuation of $75 million.

“The world is rapidly shifting to owning your own business and owning your future,” he said. “Being in Brianne’s network has helped grow our business. It’s hard for investors to build value in the companies they invest in, but it exemplifies the thing you want to help with. She works hard to get the best deals and has this thesis about telecommuting, side business. That’s it. The next generation of young entrepreneurs, with the tools to achieve multiple revenue streams.”

Several founders I’ve invested in say Kimmel aggressively pursues investment deals. Trivedi mentioned that she traveled to New York City to dine with him and asked him to take an investment from her.

“As a small business, there are quite a few ways to build relationships,” Kimmel said. “You have to keep an eye on new people and tools.” But even with her insistence, Kimmel couldn’t get into every deal she saw as part of the future of the business. Merge, a commercial start-up for integrating human resources and accounting data, which raised $4.5 million in an initial round in 2021 led by NEA, which it missed, “was first on my list,” Kimmel said.

Worklife Ventures is betting good returns on its 50 investments in startups, and with nine of them as unicorns, the stakes are high. In addition to Clubhouse, Hopin, Webflow and Deel, the $1 billion valuation list includes smart home fitness coach Tonal, alternative financing option Pipe, investment platform Public.com, video streaming software Mux, and Stytch, a validation solution without a password. .

“Unicorn startups often struggle to justify their valuations and then it can be hard to raise back-to-back funding. If they get a huge infusion of capital and spend it wisely, that could be great. But if it doesn’t, it could lead to an ex. Too soon, Gans said, “The scaling, the burn rate is huge.” “They have to learn to crawl before they can walk. It’s risky. That’s the downside.”

Worklife Ventures’ track record largely depends on whether its portfolio companies can intelligently expand, achieve profitability, acquire or go public. Kimmel said it intends to raise another funding, but that plan hinges on its initial performance. With venture capital funds that usually have a 10-year life cycle before investment returns are recorded, Worklife Ventures still has a ways to go.

Join us October 25-26, 2022 for the CNBC Action Summit – Disintegration, Negotiation, and Design: The World of Work Now. Visit CNBC Events to register.

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