How I Invest with Flybridge's Next Wave NYC Fund
A pre-seed fund focused on exceptional AI startups
I recently started a side gig as an Investment Partner at Next Wave NYC, a new pre-seed fund from Flybridge supporting innovation in NYC. I wanted to share a bit about the Next Wave approach, the perspective I bring to investing and what it means with regard to Lynx Collective.
Flybridge’s Next Wave Funds
Many VC firms have scout programs, where folks in their networks source startups and bring them into the firm. The structure and compensation of these programs vary but typically the intention is to see and invest in more startups by activating a broader network.
Flybridge has taken an approach that I think is pretty novel. Rather than bring on individual scouts, it has developed its Next Wave funds - groups of partners who are full-time founders & operators, working together to source, evaluate and make investment decisions together, focused on a common thesis.
Interestingly, even though Flybridge completely backs these funds, Flybridge GPs don’t share the carry in any of these deals. The carry is split amongst the partners. It’s a smart and generous way to incentivize the partners to put in the time and effort to find really great startups.
The motivation for Flybridge is that the fund can start getting to know startups earlier than their typical investment stage (seed stage) - and potentially invest in or lead their seed rounds.
This approach has been so successful for the firm that it’s gone far beyond merely supplementing the firm’s deal flow. Next Wave fund startups now make up almost half of the of the seed investments that Flybridge makes today. It’s a strategic and core part of deal sourcing. That makes Next Wave even more appealing to founders, since we have a strong connection to a great seed fund, making the next round potentially easier to raise. And that makes our job as Next Wave partners even easier. The incentives are beautifully aligned for everyone.
Next Wave NYC
This new fund (as Flybridge GP Jesse Middleton wrote more about earlier this week) brings together a collective of individuals who have been building in the NYC startup world for a long time. Besides enjoying swapping tales of what the old days of NYC tech were like, we also all have our own perspectives and networks that collectively have a pretty extensive reach across the relatively small NYC startup ecosystem. And since it seems pretty clear that AI is fueling the next big wave of innovation in technology, it makes sense for us to zero in, to understand it as well as we can, to support the best AI startups in NYC and help shape the development of this burgeoning space.
To start, the fund has committed to investing in $3 million across 50 pre-seed startups in the next 3 years.
My Investing Journey
Though I have never been a full-time investor, I’ve been investing in startups since 2012 in various ways - as a founding partner of Liberty City Ventures (and one of the first to dedicate a fund to crypto), as a communications partner at Primary Venture Partners and as an angel investor. I learned a ton about investing when I worked with those funds and had a few successes. My very first investment was into TripleLift which exited to Vista Equity Partners for $1.5B, my second was in Paxos (most recently valued at $2.4B) and I remain a (tiny) LP of Primary Venture Partners, and therefore have a (tiny) bit of equity in Chief, Slice and more. I’ve made some angel investments along the way, mostly in select founders who I know well or whose missions I believe strongly in. I’m a proud investor in Sequin, Kumospace, Texture and other small startups you’ll hear more about in the future.
But investing on the side took a back seat once I started having babies. Now that they’re older, in school and all of our lives are under more control, I’m excited to get active again, and with a new perspective.
I used to think of people and their products as two different things to evaluate. Now I think they are more inextricably linked. Primarily, the founder(s) matters most. I want to see them demonstrate a dogged pursuit of a greater mission and truth, and an ability to learn and adapt quickly. Of course we are also analyzing the problem space, the solution, the market, etc. - but that is all really as a means of evaluating the founder’s insights and approach, how they learn and build.
Over time, I’ve also spent more of my energy on understanding the implications of new technologies and how they affect society. So while we are looking for game-changing innovations, I think it’s critically important - especially in AI - to ensure that technology development is responsible and mindful about the downstream effects.
Last but not least, I think venture capital as an asset class is also missing out on a ton of opportunity because of its demographically-biased allocations. Female-founded teams raise only ~2% of VC funds, Black founders raise less than 1% - it’s crazy. I believe that there are many brilliant, high-potential founders in the world who are not getting the level of support that they should because of biases. By actively searching for these overlooked founders, not only are we going to find the opportunity for excellent venture returns, but we can also change the balance of power in tech (and therefore society). I’m proud of the diversity of the Next Wave NYC partners and know that factor alone will make a meaningful difference here.
The Interplay with Lynx Collective
What I’m most excited about is that the founder community at Lynx Collective community has even stronger access to great investors - Next Wave NYC, Flybridge and all the other investors we will be working closely with. We already have a great InsideVC speaker series, which we kicked off with Union Square Ventures (and we have a great roster on deck), and we make connections where we can, but my Next Wave work helps smooth the path even further. It’s very additive to Lynx Collective’s mission to create more access to meaningful connections & information that help the earliest stage startups be successful.
This ended up being way more long-winded than I intended. If you made it this far, thank you for reading.
Email me (dorothy at lynx collective . com) if you’re a founder who would like to learn & grow with the founder community at Lynx Collective, or if you’re an AI founder in NYC who’d like to pitch Next Wave NYC for your pre-seed raise. By policy, I read all cold pitches. I think it’s important for building more equitable access to venture funding.