Our Manifesto: Why We Decided To Launch Kin Ventures | by Tina Hoang-To | Feb, 2022

Where capital meets talent

Capital has become a commodity. We are in an environment where founders have greater leverage and competition among investors is at an all-time high. These are the venture ecosystem stats today:

• There are ~1,965 VC firms with $548 billion of assets under management (AUM)
• This is double the number of firms from a decade ago
• There is $151 billion of dry powder available to companies, up from $72 billion in 2011. The most dry powder available since this data has been tracked
• In 2020, the overall U.S. median VC fund size was $75 million — the highest since 2008 and a 69% increase from 2019

Source: National Venture Capital Association (NVCA).

As an investor, there has never been a time where differentiating yourself and your fund has become more important. At Kin Ventures, we not only have a unique background that spans across early stage to late-stage growth investing, but we are also founders who have real, first-hand experience building from scratch, and we add value to our portfolio companies by giving them access to top talent they would not otherwise have access to on their own.

Our fundamental belief is that we are valuable advisors to our early stage companies given we have been in their shoes. Being a Founder is not a glamorous job. It is a grind. No one else understands this more than another Founder, and this is a role that both my founding partner, Ben Herman, and I have taken on in our respective careers. There are many challenges in the startup phase of a business — getting to product market fit, competing for talent against large companies who can pay way more than what you can afford, constantly fundraising (and likely getting rejected many times), and the list goes on. There is no better prerequisite to having founder empathy than going through that experience yourself, and we both have.

Venture capital is moving into a new chapter in its evolution. One in which operating experience matters and tips the scale in our favor in competitive deal situations. We have observed that this generation of founders care more about finding a true long-term partner and less about working with an established brand. This is why a wave of “solo VCs” are entering the market and why these “little guys” are winning against the traditional Goliaths.

• When Playco closed its $100 million Series A, solo VC Josh Buckley, set the price of the round and took the board seat
• When Notion raised in mid-2019 valuing it at $800 million, there was not a venture capital firm leading the round, instead, it was led by Daniel Gross, Elad Gil, and Lachy Groom
• Successful operators turned investors Lachy Groom (Stripe), Elad Gil (Twitter), and Josh Buckley (Product Hunt) have all raised $100+ million funds

Founders like to work with other founders. This is where venture capital is heading.

There are currently 1.4 million unfilled software jobs in the U.S. In a survey conducted by McKinsey & Company, over 50% of job openings in 2020 were engineering, product and data related roles. This competition for tech talent is especially heightened for young startups that don’t have the brand awareness and recruiting bandwidth of established companies.

This is a critical stage where hiring the best engineering talent matters the most. The first few hires tend to set the quality bar for the next few hires as A+ talent will recruit other A+ talent. A “10x engineer” is a term for an engineer that is super efficient, incredibly talented, and produces 10x output than the average engineer. When you can build a team consisting of these high quality builders, this can truly change the likelihood of success for your startup as they build better software, execute faster, and attract and hire more talent. It is no surprise that finding these 10x engineers is not easy. Jason Freedman, Co-founder of 42floors once said, “The best people don’t submit resumes or interview for jobs.”

And here enters our in-house recruiting team, GT Partners.

Not all engineers want to be the 1000th engineer working at Facebook. When we think about why these startups don’t get access, it’s pretty simple, these candidates don’t know how to discover these companies and are inundated with opportunities from recruiters. It’s like finding a needle in a haystack.

My partner Ben has spent his entire career being an expert in people and recruiting. He founded GT Partners when he was 21 years old and it is now a successful, elite recruiting firm that is laser-focused on working with the top 1% of technical talent.

Here’s the magic behind GT Partners:

• Reputation & access. Their core clients are the world’s leading quant funds who pay the highest compensation package for 10x engineers, which gets the attention of candidates in a sea of noise and email traffic. These clients work with GTP because of their proprietary sourcing methods
• Strong network. They have a vast network given they have placed more than 1,000+ top engineers and benefit from constant referrals
• Qualification process. They have a strict criteria, which results in GTP recruiters only working with 2–3 candidates per month leveraging a highly consultative approach
• Culture of excellence. The team has in aggregate 30+ years of recruiting experience, specifically in technical roles. They are the best at what they do

Together we have a playbook that can’t be compared to the generic recruiting agency. We focus on low volume but high quality. As we provide “first access” to this talent to our portfolio companies, we have high conviction that this will be instrumental in their future success.