By Christos Makridis
Investing has long been criticized as an activity for the elite and powerful, especially in the flow of venture capital for startups. The burgeoning Web3 community has not been immune to these criticisms. But one company is determined to make a change.
Launch House has “launched” a $10 million fund called House Capital using a 506(c) vehicle that allows additional accredited, but smaller-sized limited partners, to participate in their ecosystem of founders and startups.
Launch House is an exclusive membership community focused on connecting and supporting top entrepreneurs. Unlike the vast majority of accelerator programs that exist for entrepreneurs and founders, they are committed to creating a space where people can not only work together, but also live and learn together—through the highs and the lows. Physical communities already exist in Los Angeles and New York City, and Launch House is considering additional locations.
Traditional venture capital is lucrative, but hard to enter. “Partners at most top-tier venture capital funds have generally achieved prior success with their own startup companies before joining—a journey that can require years or even decades. When hiring entry-level employees, those funds may occasionally hire a few young graduates from the world’s elite universities. Yet most startup founders can readily distinguish between the VCs that have ‘paid their dues’ in their own startups and those who have not acquired the critically important experience of building their own company,” said Kevin Virgil, chief investment officer for Meta Impact Capital.
Launch House co-founders Jacob Peters, Michael Houck, and Brett Goldstein.
That’s where House Capital contrasts with the traditional approach: they reduce the barrier to entry for participating in venture capital, and they will funnel capital back into Launch House.
“We want to allow a wider range of people to benefit from the upside of a venture fund,” said Brett Goldstein, co-founder of Launch House. Rather than just disbursing the returns all to shareholders, House Capital will largely reinvest returns into Launch house, “creating stronger programming and better experiences for members,” they announced on July 27. That makes investments into House Capital investments into the underlying people who compose the Launch House community.
“Founders of startups that House Capital invests in will get lifetime membership to the Launch House community, and full access to community amenities including fundraising support, digital cohort-based cohorts and exclusive in-person residencies and retreats around the world,” they continued. Members of Launch House access more than traditional mentoring and networking than is present in a conventional accelerator program; they access co-living residences, conferences across the world, executive coaching, and a space to openly share challenges and uncertainties.
The genesis of Launch House is very personal. After taking the conventional route, Brett Goldstein was dissatisfied. “On the outside, my life looked great, but on the inside I was lost and confused,” said Goldstein. “What I realized was that everyone is looking for community, so I wanted to build a place where people can grow not just professionally, but also personally, with one another… to create a sense of belonging for everyone,” he said.
A group gathering at a Launch House event.
House Capital’s limited partners (LPs) feature an interesting and accomplished group of people, including: the cofounders of Dropbox, YouTube and Riot Games, as well as Michael Ovitz and C-level operators from Polygon Studios. Members are signing up for not just a predictable rate of return, but a community that mentors and builds experience with one another. “The value that venture capitalists provide besides the capital is not always there… I want to be able to add and share my experience,” said Ryan Wyatt, CEO of Polygon Studios. “What we’re seeing is younger founders getting access to capital… everything from top to bottom feels different and it’s a good time for that… really talented individuals are going to come through it,” Wyatt said.
“The rapid growth of today’s Web3 ecosystem is the most exciting innovation we have seen in years – perhaps since the creation of the internet itself… Web3 represents not just new technology, but a structural shift in how online communities are created and connected,” Virgil said.
Web3 investing is bringing many new ideas and opportunities to create community, particularly with the expansion of the metaverse. If augmented and virtual reality products continue making progress, soon we might be able to spend time with one another even if we are geographically separated.
