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/).
Nvidia on Wednesday became the first public company to reach a market capitalization of $5 trillion. The ravenous appetite for the Silicon Valley company’s chips is the main reason that the company’s stock price has increased so rapidly since early 2023.
Chris Williamson, Chief Business Economist at S&P Global, breaks down September’s CPI print and inflation trends, explaining what it means for markets.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
