Mike Maples, one of the co-founders of Motive, has been investing “as a hobby” for the last five years under the banner of Maples Investments. Some hobby: his investments include Twitter, Digg, Chegg, Gowalla, ngmoco, Smule, Kwedit and a dozen or so other well known startups. And he’s already cashed in on a few of those investments by selling some of his stock in secondary venture rounds.
At first he put his own money to work. Then he raised a $10 million fund in 2006, and a second $35 million fund in 2008. And along the way he added a partner, Ann Miura-Ko.
Maples now admits that his hobby is more of an obsession, and he’s changing the name of his fund to mark the milestone. Goodbye, Maples Investments. Hello, FLOODGATE.
What’s changing? Not much, which is precisely the point. Maples has focused on finding disruptive startups that don’t need a lot of cash to win since the beginning. That sounds smart, but the prevailing wisdom in Silicon Valley is often still the notion that a startup that wants to disrupt a big industry needs big capital.
You can listen to his outline his investment approach in a talk he gave earlier this year at a Future Of Funding event in Silicon Valley put on by Adeo Ressi. He calls the startups he’s looking for “Thunder Lizards.” He wants startups that are like Godzilla, he says, who eats his competitors and tears apart cities. It’s a fascinating video.
Part of this whole Thunder Lizard philosophy is to find startups that not only have a great idea, but it’s a great idea that everyone else thinks is ridiculous. That gives the startup room to grow before competition hits. It doesn’t matter if a startup idea is wrong, the venture money is lost. But if it’s right and everyone jumps in at the same time, competition eats profits. He’s looking for startups that are “non-consensus right” and he uses Chegg, which rents textbooks to college students, as a prime example. He invested in 2007. Two years later Kleiner Perkins jumped in.
I spoke with Mike and Ann last week about the new launch of FLOODGATE. It’s a fascinating conversation (see video at top of post). Particularly, in my opinion, when they explain how the name of their new fund (Floodgate, which is a gate to stop floods) is actually about opening the floodgate, not being one. They also talk about the proper care and feeding of young startups (my words, not theirs), and how much value the right early stage investor can bring to a young Godzilla-in-training trying to find its place in the world, and a city to destroy.
Maples Investments, run by Mike Maples is now FLOODGATE. (Source: Maples Investments)
FLOODGATE is a venture capital firm specializing in micro-cap investments in start-ups. The firm seeks to invest in technology related sectors. It typically invests between $150,000 and $1 million. The firm prefers to invest in companies located in either the San Francisco Bay Area or in Austin, Texas. It prefers to invest alongside other experienced private investors or top-tier venture firms. FLOODGATE is based in Palo Alto, California.
Mike Maples, Jr. is the managing partner of Maples Investments, and was recently named as one of “8 Rising VC Stars” by Fortune Magazine for his investments in business and consumer technology companies. Before becoming a full-time investor, Mike was an entrepreneur and operating executive who worked in a variety of senior management roles in high-growth companies. His background spans a variety of markets including consumer technology, small business, and the enterprise, and he has led various functions in...
Ann Miura-Ko is a partner at FLOODGATE where her investment interests include capitally efficient software and technology enabled services. In addition to serving at FLOODGATE, Ann is currently a Ph.D. candidate in the Management Science and Engineering Department at Stanford University, where her research focuses on mathematical modeling of computer security. As a part of the program, she teaches several courses in Stanford’s renowned Technology Ventures Program, including Technology Venture Formation, High-tech Entrepreneurship, and the Mayfield Fellows Program. She has...