LA Venture: Taylor Adams on His ‘Blended Approach’ to VC
On this episode of the LA Venture podcast, Los Angeles native Taylor Adams talks about how his philanthropic work and time in venture capital motivated him to build Rise Together Ventures, a Santa Barbara-based venture franchise combining venture funding with philanthropy.
“My vision is to find ways to accelerate human progress on a multi-generational timeline,” he said. “That’s part of the reason why I think working within the innovation economy, as either a VC or founder is just so compelling because you’re working through this porthole to the future and building things that may or may not exist 10 years from now or could totally change the world.”
The tech and VC scene has been part of Adams’s life since he founded his first real estate development company while completing his undergraduate degree at USC. It was through raising funding for his second venture and “talking to a lot of family offices” that he was suddenly struck with this idea of a “blended approach.”
“Rather than just build a direct venture capital fund with the office, we should probably originate a venture capital allocation and do things like cash flow modeling and portfolio construction at that level,” he explained. “And then what we started to also do is play with this idea of what we call ‘blended platform approach,’ where you combine fund-of-fund investing with a third bucket that is direct investments.”
As opposed to targeting only market coverage and credibility, the new approach allowed him to expand funding to target other areas.
“What we're targeting is coverage, credibility, and then benchmarking,” he said. “And then the next bucket is the direct fund bucket. “
While working in the VC space, Adams was simultaneously serving on the board of Homeboy Industries, a gang rehabilitation and re-entry focused nonprofit in L.A.
“My perspective is that governments and nonprofits tend to scale linearly,” Adams said. “Whereas, for profit startups are capable of scaling exponentially. And with the problems that our society is facing today, we don't need linear scaling solutions.”
This led Adams to create Rise Together Ventures, with the goal of revolutionizing and creating a new paradigm in the philanthropic world.
“We're actually empowering for-profit startups to fully embrace their ambition to change the world by having the right incentives and mechanisms to be able to take their core capabilities and what they do best, and simply leverage those to create value within what we would traditionally deem as philanthropic domains,” he said.
At Rise Together, there are two separate pools of capital. One is a normal venture fund and the second one is a donor advised fund, which is a pool of philanthropic capital.
“We leverage something that we call philanthropic mirroring which is matching an equity investment with an equal amount of philanthropic capital,” Adams says.
Essentially, the funding that comes from the philanthropic capital is to gauge how the company would do. Currently, Rise Together is writing checks between $100,000 to $500,000 for early stage and late stage startups.
“If we create a structure where founders are empowered to effectively expand their product market fit by even just a little bit into more philanthropic domains and any segments of the market that can’t really pay for things, they can really fully embrace their vision for the future,” he said.
dot.LA Reporter Decerry Donato contributed to this post.
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This podcast is produced by L.A. Venture. The views and opinions expressed in the show are those of the speakers and do not necessarily reflect those of dot.LA or its newsroom.
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