On this episode of L.A. Venture, Minnie Ingersoll talks to Unlock Venture Partners co-founder Sanjay Reddy, talks about Unlock Fund II, his Southern California focus, and offers some advice for startups on finding good bankers — and much more.
Unlock doesn't invest in any particular industry, but Sanjay says they do look for startups that are oriented towards "some kind of unique conviction or insight around data."
The firm is split between Los Angeles and Seattle.
"Unlock was born of the thesis that if we looked at the markets of Seattle and Los Angeles, it's obvious that those are two of the five largest tech markets in the U.S.," he says. "And obviously these markets are capable of producing very large outcomes when it comes to technology. However, there is also a dearth of early-stage capital."
Sanjay is particularly interested in the possibilities of video, where he believes the distribution channels will continue to change and offer new opportunities.
"I do believe there's a bunch of money to be made," he says. "The pipe has physical limitations. And so the question is, how do you actually deliver the video? I think there's a ton of money to be made on compression and optimization around video."
Sanjay was born in India and moved to the U.S. when he was 18 for college. Early on, he was involved in the independent music business and found himself living in an apartment in Hollywood next door to L.A. hip hop OG King T and down the hall from Ice T.
"It was a very alternate reality that a nice Indian kid growing up in Calcutta should never, would never have been exposed," he says.
Sanjay Reddy is a co-founding partner of Unlock Venture Partners. He was previously a co-founder and CEO of Live Matrix and CEO of OVGuide following its acquisition of Live Matrix, and most recently an executive at FOTV Media Networks.
After closing its first fund in December with $25 million in dry powder, VamosVentures, which bills itself as the first Latinx-owned venture fund to focus on Latinx and other diverse founders, decided it could stretch its ambitions.
Companies like Apple and Bank of America were knocking on the door, and VamosVentures decided it might as well capitalize on the increasing desire of corporate America to show they cared about diversity as well as a loosening of regulations that made it easier for banks to invest in venture funds.
"We had a good group of folks that didn't make the deadline," said Marcos Gonzalez, founder and managing partner of VamosVentures, who has previously been an angel investor and worked in private equity. "A couple new LPs showed up that were really motivated to do something in the DEI [diversity, equity, and inclusion] space and certainly the social justice space."
The fund plans to focus on health and wellness, future of work, consumer packaged goods and financial technology startups.
With the additional checks – which also come from Twitter, the Ford Foundation and the global alternative asset firm TPG, VamosVenture announced this week it has doubled its fund to $50 million. The new investors join PayPal, which signed on last year.
Rather than back more startups, the additional capital will mostly be used to write bigger checks of between $250,000 and $1 million.
"We will be able to take larger ownership positions," Gonzalez said, adding that he will also be able to hire more staff.
Just 2% of VC investment partners in L.A. identify as African American or Latino, according to PledgeLA. Nationally, a 2018 Deloitte study found 80% of investment partners at U.S. venture firms were white and only 3% were Black and 3% Latino.
Gonzalez said he is pleased to see companies like Apple recognizing the value of diversity and promoting more non-white managers.
"When I started this five years ago, there weren't that many. Now you run into one every week," he said. "There's been a lot more momentum around diversity."
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At first glance, Broadway shows and early-stage startups would appear to have little in common. But ad mogul Marc Boyan thinks the way they're marketed is similar. He wants to take the expertise he gleaned leading campaigns for high-profile shows like "Hamilton" and "The Book of Mormon" to tech.
"The thing there with the Broadway stuff is that they create huge brands with small budgets," Boyan said. "Imagine if you could do that for tech startups."
Boyan announced Thursday that his company, The Miroma Group — one of the largest marketing services companies in Europe — is launching a new venture fund through Miroma Ventures, headquartered in Los Angeles and London.
The firm says it will distribute $100 million over the next few years to back purpose-driven consumer brands at the seed or Series A stage in the form of traditional checks, as well as marketing services. In other words, instead of just money, startups can opt to get access to Miroma's vast marketing engine, which in addition Broadway shows has powered campaigns for brands such as Adidas, Disney, L'Oreal and Heineken.
"Some may not want cash, some may only want cash," Boyan said. "We become partners more than suppliers and we have skin in the game."
Miroma Ventures has already invested in more than 50 media and consumer businesses around the world, including early-stage investments in Classpass and Pinterest.
After living in London, Boyan moved from New York to Beverly Hills during the pandemic and sees Los Angeles as an ideal hub for melding marketing and startups.
"You're getting access to a lot of talent – influencers, artists and celebrities," he said. "And we're so close to Silicon Valley. In London, I'm not close to anything but Berlin."
Will Schmitt, who co-founded Trail Post Ventures, a growth equity firm specializing in early-stage consumer investments, has been tasked with leading Miroma's venture strategy.
"We see a lot that we're excited about in terms of the early ecosystem and startups and innovation here within L.A., especially within food, beverage — anything kind of health and wellness, beauty, personal care," Schmitt said. "It's really a mecca for that."
The team at Miroma Ventures also includes Sir David Michels, former Deputy Chairman of the British retailer Marks & Spencer; Kelly McCarthy, former SVP at LVMH and GM/Sr Director at Nike; Justin Stefano, former co-founder and CEO at Refinery29; and Patrick Yee, former CMO of Daily Harvest.
Editor's note: An earlier version of this story said Boyan was a self-described billionaire but his representatives later clarified that he is not in fact a billionaire.