Upfront Ventures, the 23-year-old, LA-based venture capital firm, is gearing up for far more deal-making.
In addition to filing paperwork with the SEC this summer to raise its third growth-stage investment fund (it is also investing a $400 million early-stage fund and probably announcing another soon), the firm just added two new general partners to its lineup of investors.
One of them, Michael Carney, joined Upfront as a principal in 2015 after working as an editor at the news site PandoDaily, and, before that, working as an investor and analyst at a boutique merchant bank called Worldvest.
The firm’s second new general partner is Aditi Maliwal, who has also circled in and out of investing before, including stints as an associate with Crosslink Capital and, more recently, spending several years with Google, where Maliwal worked in corporate development before becoming a product manager.
We talked with both this week to congratulate them, as well as to learn more about what they’ll be shopping for — and from where.
For her part, Maliwal, who begins work at Upfront next month, says the idea is for her to eventually open a San Francisco office, though for now, she’ll be operating from the Bay Area out of a space that’s yet to be determined and spending every Monday or every other Monday down in LA with the rest of the team.
She got to know Upfront through another general partner, Kara Nortman, who joined Upfront in 2014 and who Maliwal would continue to see at events, as well as on the occasional trip to LA to see extended family. Maliwal also says she would observe on her trips that the “ecosystem in LA has really grown from 2014 to where it is today. I think the Bay Area continues to see how important it is, too.”
As for becoming an investor again, Maliwal says she was always interested in becoming a VC, thanks in part to a class taught at Stanford by renowned venture capitalist Heidi Roizen that inspired her. She says spending time with founders in her husband’s business school class at Stanford this past year whet her appetite anew. “There are four or five companies I’m close to and they’re good friends and when I was up at 11 pm working on a company idea with one of them earlier this year, I just realized that this is what gives me a lot of energy and this is a space I want to [get involved in again].”
She says she’ll mostly be focusing on business to business to consumer models, as well as SaaS applications, fintech and, when the opportunity arises, consumer products. More broadly speaking, says Maliwal, she hopes to serve as a bridge for Bay Area startups looking for a foothold in the LA market and vice versa.
Meanwhile, Carney is, and will remain, more focused on later-stage bets that Upfront funded early on and whose success the firm wants to ensure (to the extent that any firm can).
Understandably, he sounds excited — still — about the work.
“In 2012, [when I was at PandoDaily] LA was crossing an inflection point, with a number of second- and third-time founders coming out of later-stage marquee companies. When I joined Upfront, it felt similar. It was an incredible platform, it was a year or two after the firm was rebranded [from GRP Ventures] and Kara had been there less than a year and [fellow general partner] Greg [Bettinelli] had been there maybe two years. The team was kind of maturing and I feel lucky to join when I did.”
Carney suggests the opportunities have only grown stronger based what he’s seeing in the later-stage world. “We’re definitely seeing [greater bifurcation] between the haves and have nots, with companies that can break out as clear leaders tending to have access to larger amounts of capital than in past years. For the best of the best, the conditions remain as favorable as possible, while it’s gotten harder for companies to raise capital that fail to hit those growth rates, even in good times.”
Being able to recruit employees from roles at top companies in the Bay Area is just one reason solid LA companies have attained more momentum. “I think that owes to the maturation of the LA ecosystem. I think people are drawn to LA because Silicon Valley, for all its incredible success in the tech sector, is an industry town and LA has a more diverse economy and ecosystem. But also, five years ago, people would ask themselves, ‘If this new role [in LA] doesn’t work out, what do I do next?’ And I think the answer to that question is much clearer and more positive today.”
According to Upfront, 40% of its initial checks are written to companies based in LA, though it has bets in other parts of the U.S. and world. Some of the best-known deals in its current portfolio include the scooter company Bird, the sneaker marketplace GOAT and the online resale store ThredUp. Upfront was also an investor in Ring, the smart doorbell company acquired early last year by Amazon for $1 billion.
In addition to Maliwal, Carney, Nortman and Bettinelli, the firm is managed by general partners Kobie Fuller, Kevin Zhang, Mark Suster and founder Yves Sisteron.