Alexis Ohanian's Initialized Capital Closes $225 Million Fund
*By Hope King*
Initialized Capital on Tuesday said it closed a $225 million fund ー its fourth and the largest since the VC firm's founding in 2011.
Alexis Ohanian and Garry Tan, former Y Combinator partners, launched the company to focus on early-stage start-ups. With the new money, Initialized now oversees more than half a billion in committed capital, more than 70 times the size of its first fund of $7 million.
"When we first started, we'd buy less than 1 percent of a company," Tan told Cheddar in an interview Tuesday morning. "What we realize now is we can buy 10 to 20 percent of companies. From there we want to be the best investors ー helping them week to week on every aspect of the \[business\]."
Those aspects? Tan listed design, product management, operations, sales, marketing, legal, and finance as examples.
"Before, you’d have to bring those skills across a syndicate, and not all of them would be responsive," Tan said. "We can do the entire round, and on the flip side a company doesn’t have to worry about missing out \[or\] building out a complete syndicate."
Early stage companies, particularly those rooted in software, are Initialized Capital's sweet spot.
"Engineers just want to get back to building a product," said Tan.
Tan understands that mentality given his own background.
Before Initialized and Y Combinator, Tan was an engineer at Palantir, a secretive data-mining start-up founded by Peter Thiel. He was that company's tenth employee. Ohanian, meanwhile, famously co-founded Reddit with his college friend Steve Huffman.
"We're builders ourselves," said Tan.
One goal for Initialized ー not unlike many other venture capital firms ー is to discover the "Next Big Thing".
“The most valuable thing is to invest in the thing that will become the future before anyone thinks it is," Tan said, referring back to his experience working with Peter Thiel.
"You have to be contrarian and right," he continued. "Consensus thinking just results in infinite competition."
Initialized has already seen a lot of success with its portfolio companies: six are worth more than $1 billion.
One of those is Instacart, which Tan said Initialized jumped on when the app was still in TestFlight status. The other is Coinbase, founded by Brian Armstrong who had just left Airbnb. The former is now worth more than [$4 billion](https://www.reuters.com/article/us-instacart-funding/instacart-valued-at-4-35-billion-after-latest-funding-round-idUSKCN1HC2LY), while the later is said to be worth about [$8 billion](https://techcrunch.com/2018/10/02/tiger-global-is-in-talks-to-invest-in-cryptocurrency-unicorn-coinbase-at-8b-valuation/).
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
U.S. sports betting is booming as NFL and college football fuel massive activity. BetMGM CEO Adam Greenblatt breaks down trends, growth, and what’s next.
President Donald Trump says a deal struck by Netflix last week to buy Warner Bros. Discovery “could be a problem” because of the size of the combined market share. The Republican president says he will be involved in the decision about whether federal regulators should approve the deal. Trump commented Sunday when he was asked about the deal as he walked the red carpet at the Kennedy Center Honors. The $72 billion deal would bring together two of the biggest players in television and film and potentially reshape the entertainment industry.
Disney's changes to a program for disabled visitors are facing challenges in federal court and through a shareholder proposal. The Disability Access Service program, which allows disabled visitors to skip long lines, was overhauled last year. Disney now mostly limits the program to those with developmental disabilities like autism who have difficulty waiting in lines. The changes have sparked criticism from some disability advocates. A shareholder proposal submitted by disability advocates calls for an independent review of Disney's disability policies. Disney plans to block this proposal, claiming it's misleading. It's the latest struggle by Disney to accommodate disabled visitors while stopping past abuses by some theme park guests.
With a merger this big, creators, studios, and theaters all face uncertain futures. Here’s what experts are worried about and what good could come from it.
With disengagement rising and hybrid work shifting, 'Everybody Matters' author Bob Chapman explains why treating people well could define the future of work.
We sat down with Ali Furman, U.S. Consumer Markets Industry Leader at consulting firm PwC to ask what trends she garnered from the initial data this year.
