Memes and mimeticism; reflections on venture capital one year in

I’m trying to get better at publishing half-formed thoughts as a way of forcing ideas down onto the page. This one is a chance to noodle on a feeling or a sense that’s been building in my brain the last year.

I was standing in Dolores Park in San Francisco one scorching May day when I realised it was a whole 12 months since Common Magic’s first close when I became a full-time VC (venture capitalist).

There’s so much in life I try to keep an open mind about but there were a few very specific reasons I chose to start my own fund versus join someone else’s firm:

• I believe in the primacy of the founder/investor relationship. Obviously, there are many reasons why a founder might want to work with an established brand but as an investor who doesn’t lead rounds, one advantage I bring to the long-term game of company building is that as a solo GP, founders get me. No staff churn.
• I believe in knowing who you are and acting accordingly. The best founders tend to have a lot of choice. I wanted to make it easy for them to choose me by clearly communicating my specific areas of value add (narrative + community strategy). And, while my thesis is horizontal not vertical, I’ve collected many patterns and lessons in my 15 years as an operator and ~40 angel investments with the same focus; products with community at their core. I became irrationally convinced that a fund with this thesis could win if it had distinct operational expertise (an LP said to me once “this fund is clearly your life’s work”).

Ultimately, it’s hard to build your own path if you’re walking up to someone else’s house.

As I work on building that path, some things I’ve been thinking about:

One is the rise of the meme. Memes are cultural artefacts, images or phrases or both, that represent or become a shared touchpoint. They used to be for the terminally online but increasingly memes get everywhere. Last week I was buying a bottle of wine when the owner (not 21) complimented me (also not 21) on my “brat summer” nails (aka pale green) the same day the term popped up in four other places including a print version of a serious newspaper.

Memes can be essential tools of movements; just look at the absolute vibe shift happening in the US election right now enabled by harnessing cultural capital (given summer 2024’s speed of vibe shift, it’ll probably be over by the time I publish this).

So I don’t mean to ding on pop culture or the joy of a shared reference (I love both) but memes are a Rorschach test. They often become shorthand for what we think we share but refuse to probe more deeply.

That matters because human brains are what we train them to be. Even if we love and want things expressed in simple terms, there’s a ton of nuance and beautiful complexity out there.

Independent thought has always been something that matters to me.

As one small example, my Twitter feed used to be interesting shares and public questions; now it is just memes. And even good memes can feel flat sometimes.

Mimetic; characterised by, exhibiting or of the nature of imitation of mimicry.

Venture capital as an industry can be mimetic; sectors rise in terms of capital and attention, while others are ignored.

I felt this very strongly during the brilliant few weeks I spent in my old home, San Francisco, in spring. Let’s start by stating the obvious; SF has incredible density, energy and velocity that any ambitious European founder or VC needs to be in the orbit of regularly. It’s a good kick up the arse to be serious about what you do.

At the same time, any one-industry city sometimes falls into groupthink. Building the same things, crowding into the same spaces.

Why does this matter?

Because two things which have been on my mind are true at once:

1. Venture capital at its core is all about finding the new — this is where outsize returns are made. If an LP is investing into a new or emerging fund versus a larger brand, it’s because they’re seeking those outsize returns versus the brand association and more stable returns a larger fund may bring. True venture capital is meant to be about the risk of the new; finding and funding hard things, weird things, things that are not yet consensus. The future will not look like the past and the risk/reward likely won’t be as extreme if you’re thinking about and doing the same things as everyone else.
2. At the same time, unless you’re the rare kind of company that only wants to raise venture capital once and focus on profitability*, to be able to raise then any founder and their investors will need to persuade others — in current and future rounds — that this company justifies further backing. So too weird or too early or too [insert adjective] won’t work.

As an angel, I thought I spoke to a lot of VCs but something founders should understand more deeply is the sheer volume of information exchange that happens. Between founders, peer and follow on investors, Whatsapp is definitely the backbone of my business. And one of the most important skills that was not clear enough to me a year ago is the need to map and pitch my companies to the right follow-on investors.

It’s very seductive to consider yourself some kind of magical lone wolf but unless you’re a lead investor with a gigantic fund this is simply not possible.

A big lesson from the early part of my fundraise was lean into who you are and don’t try to be someone you’re not. You can only really do things your way but how does a new VC think through the need to get the balance right between mimeticism and independence?

An example I’ve been thinking about is Dolores Park. San Francisco is many things at once but Dolores Park is pretty distinctive; circles of tech workers and local teens having BBQs, cut fruit wagons, discarded joints, a DJ who seems to have dragged their record player into the park. And, nestled between the beautiful chaos of the Mission and Noe Valley’s clean cut bakeries and buggies, it does its thing. And it just works.

*There’s a larger conversation to be had in the emerging manager world about the mixed incentives of this; on the one hand, focusing on revenues and profitability means less dilution and more profit for the fund on exit in the longer-term. But, given managers need to raise new funds on a 3 year cycle, many LPs seem to prefer a paper mark-up even if in the long-term that leads to more dilution and less profit.