At 26 years of age, Ramtin Naimi, has already made a small fortune as a hedge fund investor. Now, the founder of Abstract Ventures, an early-stage venture investment firm, is looking to rethink how early stage deals are done. Specifically, he’s hoping to combine an emphasis on community and philanthropy with investing to both draw in deal flow while also helping his network of young, ambitious founders.
Naimi began his investment career at 15, when he started tracking the stock market trades he’d overhear on CNBC, a TV network that his dad — a partner in a Bay Area auto dealership franchise — watched incessantly. His first foray centered on trading options, acclimatizing him to large market swings. “I became way too comfortable with risk at way too early of an age,” Naimi tells me. “Massive fluctuations in the accounts became a normal thing to me.”
By age 16, Naimi was interning for a fund manager in Tiburon, Ca., and by age 18, he’d secured an investment advisor license and began managing money for family, friends, and friends-of-friends. Little surprise that by the time Naimi was 22, in 2012, he’d launched his own fund, Opes Cura, with $600,000 — capital he says grew to $18 million at its peak. (Naimi says he grew the fund through options trades on the banking sector, along with an early, big bet on steel.)
What Naimi wasn’t dabbling in was venture capital. And based in Northern California, he was unsurprisingly was eager to learn the tricks of the trade. His first step toward that end? To reach out to Stuart Peterson of Artis Ventures, as well as renowned angel investor Gil Penchina. “There were a bunch of guys whose careers I tracked,” Naimi says. “I wrote them both blind emails telling them about my interest in the space. And got mentored.”
It helped that Naimi was already a millionaire, providing him the luxury of spare time to devote to pitching in around the Artis Ventures office as an investment intern. Soon, he says, he was hooked, too.
“I’d never had any exposure to the startup world; I had so much more fun doing it than investing in public markets,” he says. “When I started getting venture exposure there were a lot of things I hated about hedge funds that I didn’t know I hated about hedge funds.” Not only did venture investors seem to be in it for the long haul, but the liberation from being tied to a computer screen and watching chart patterns and stock fluctuations for days on end also appealed to the young investor.
“I had so much more fun meeting people and learning new concepts,” Naimi says. “[And] having the ability to have some say in the outcome of the portfolio.”
Indeed, by January of last year, Naimi had struck out on his own again with his own venture firm, Abstract Ventures, where he’s both employing the lessons he learned at the feet of of his mentors, as well as making some tweaks to the traditional venture investment model.
Abstract Ventures is Naimi’s fund, for example, but every deal that Naimi does is structured as a special purpose vehicle. He doesn’t take a management fee on the SPV, and he draws down capital for deals on a deal-by-deal basis.
So far, he’s put about $16 million to work in over 30 deals in the last six months alone. Capital pools include family offices and high net worth individuals from Naimi’s hedge fund days, along with general partners at venture funds, and the AngelList platform funds like CSC Upshot, which participate frequently in Naimi’s deals.
Other participants in Naimi’s investments include the founders of his portfolio companies themselves. Naimi carves out a piece of every investment he makes for other portfolio company founders — especially if they referred the deal to him.
“I started saying, ‘If you send me a deal and I invest $500,000, you’re going to earn yourself the upside equivalent of a $20,000 angel investment and you’re going to earn carry throughout that process,'” he says.
Beyond making sure that the founders have a stake in the community and portfolio that Naimi is looking to create, he also tries to encourage philanthropic giving as part of the investment process. “I’ve always had a firm belief that if many people’s interests are aligned with you, you’ll do better,” he explains. To that end, 5 percent of any return that Naimi makes on an investment is reserved for a donation to the charity of the company founders’ choice.
Primarily, however, Naimi focuses on earlier-stage companies, with bets that include Starsky Robotics, the driverless company (which may have new life thanks to the problems at Uber’s Otto subsidiary); and Brave Software, the Founders Fund-backed attempt to make browsing faster and safer.
Typically Abstract Ventures will write checks somewhere in the $250,000 to $750,000 for seed stage investments.
To ensure that he can keep his pro rata as these companies mature, Naimi says he has also locked in additional pools of capital outside of the Abstract Ventures fund. “I have committed pools of capital I can draw down on… through AngelList and … ultra high net worth investors,” he says.
Certainly, his earlier experience with Opes Cura suggests that he knows a thing or two about fundraising.
With Penchina and Peterson continuing to serve Abstract as strategic advisors, there’s reason to think it could be as successful, too.