Julia Lipton is the founder and GP of Awesome People Ventures, an early-stage fund focused on world positive investments. Prior to investing Julia led product and growth teams in Silicon Valley startups.
We talk about her journey to investing, investing in Web 3.0, investment DAOs, raising a fund and more!
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NA: I'd love to start with your background. I'm quite interested in how you got into the world of VC?
JP: How I got into the world of VC. Okay. So I started on the operator side.
So when I was still in college, I actually joined a startup. I was going to college at the time in LA and I joined a startup that was in the Bay Area and I'd fly every week from LA to the Bay Area to work on this company. So I'd go to school Monday, Tuesday, Wednesday, and then I'd work Thursday, Friday, Saturday, Sunday, and rinse repeat.
And that was a super high flying company. That at one point it was valued at $700 million and came crashing down to zero. So I learned a lot about what product-market fit doesn't look like and the importance of going to zero to one around that time, I also got super burnt out and very sick and had, you know, a mini-crisis about what I was doing with my life and decided I only wanted to work on things that were going to make people happier, healthier, and quit that startup and joined a nutrition coaching company called Rise, where I ran growth and revenue for them.
That company was then bought by One Medical, where I launched their telemedicine practice. And so I saw these three very different companies. One Medical for people in New Zealand is now a publicly traded primary care practice with a strong telemedicine arm. I saw these three really different companies, three different stages, a high flying rocket ship that never had a product-market fit, a company that was just going to zero to one, and then it got bought and then pre IPO. And I realized that across those experiences while I was running growth and eventually product revenue teams, what I really loved was helping the founders make their dreams a reality.
I was always advising my friend’s companies, I was always just chatting with new founders about startups and I really loved just learning what was new and interesting. And so after One Medical, I took a bit of a sabbatical and after the sabbatical, I started consulting, consulting, turned into angel investing and angel investing turned into starting a fund.
NA: That's a great journey. It's great, how you went through phases of different startups and then you got to angel investing. What was the change from going from angel investing to raising a fund? How different are the two?
JP: So my first fund was very small and so I almost consider it like a friends and family fund where it wasn't like I went out and raised from big institutions.
It’s something that I'm now doing with fund two, but the change wasn't so much around, oh I need to go raise a big fund, the change was really around the mindset, right? As a fiduciary, I feel different about deploying capital, when it's my capital versus someone else's capital. And when it's my capital, if I like someone, I don't totally understand the market, but I liked the person, I liked the story, liked the video, yeah, I'll take a flyer. When it's someone else's capital, I feel a responsibility and therefore am much more diligent and much more thesis-driven. I'm much more structured in my investment process than I would be with my own capital.
I think that's something that people don't necessarily think about when they go from angel to fund manager, is that it is psychologically different and add fund admin on top of that, add LP relations on top of that, add the fact that you have an LPA, so you need to invest against certain things. Add that against the fact you have a deployment appointment timeline, so you have to be investing. It is quite different.
NA: Yeah, no, that definitely makes sense. I'd love for you to talk about the thesis that you came to after doing your angel investing and raising your first fund. What is your current thesis now?
JP: Well, I invest in a couple of different themes that I'm most passionate about. There are the web 2 themes and then the web 3 themes. And I basically invest in things that I'm passionate about and that I know. And so in web 2, that's a lot of the health care stuff, wellness stuff, tooling, remote work tools, a lot of the future of work tools that were previously built-in web 2, I think will actually be built in web 3.
So most of my future of work investing and most of my creator economy investing has moved from web 2 tooling to web 3, just because I think that's where the breakout companies are in those spaces and that's where the models work best. And so we talked about a bit how in web 2 healthcare, climate, B2B, SaaS, tooling. Web 3, I'm very interested in DAOs right now.
I think they hold a lot of potential to unlock new types of development, and new types of financial access, new types of frankly companies and ways of working. And so a lot of my investments in web 2 are in web 3 right now are around DAOs and community.
NA: Exciting. Yeah. That, I guess that leads to your journey from going from investing in web 2 and healthcare and SaaS to web 3 and the difference that is like, do you have to have a different kind of mindset when you're looking at web 3 companies?
JP: Well, I think it's really different, right? Like you can have a B2B SaaS tool that is, there's B2B SaaS tooling in both ecosystems, right? You have like payment infrastructure in web 2 and payment infrastructure and web 3.
But what's interesting is in web 3, the economics are so different. So if you look at a web 2 funds returns, and you look at a web 3 funds returns, the web 3 fund is going to on average, outperform the web 2 fund, by orders of magnitude. Right? So I have friends funds in web 3 that have like 30X, 50X their funds in three to five years.
I don't know anyone who has done that at the fund level in web 2, and part of that comes down to just the way that these companies are structured and the tokenomics, and the fact that right now, in a bull market, you have these projects, where if there's a token associated with the project and some path to liquidity just has a tremendous amount of upside in comparison to the web 2 companies.
And so what's the difference? I think part of it's the deals and the companies are fundamentally structured differently. I was talking with some people who I'm in an investment DAO with earlier today and they just categorically don't do anything that doesn't have a token because where they're getting their returns are on these tokens.
Right. And so how is it different? I think the structures of the deals and the economics from an investor standpoint are fundamentally different. And I also think the people who are successful in web 3 as founders are different because most web 3 companies require some sort of protocol or DAO or something that encourages community participation.
The importance of distribution and creating something that's valuable for a community is way different than in a B2B company. When you can have a really top-down approach and just nail an enterprise sales motion. To summarize the structures of the deals are different, but the founders are different and the way that you build one of these companies is inherently different.
NA: And when looking at these deals at this point, have you come to a preference yourself, like token or equity?
JP: Most of the stuff I'm doing is equity with a token warrant. I personally haven't drawn a hard line. It's hard, right? Because even the B2B SaaS tools in web 3 would outperform the B2B SaaS tools in web 2. So it depends through what lens.
NA: Yeah, no. Fair enough. And what, what are your further thoughts on investment DAOs? Like where do you think that they will actually disrupt VC? Or is that just a story?
JP: I do. I think it's going to take a lot of time. There's good reason why right now investments are centralised. Historically to build a venture scale company required a very specific type of founder with very specific domain knowledge with a very specific tech stack, but in the last 10 years, a lot of that has changed. And so a lot more people can recognize what a good product or company is, as opposed to being a small subset of people.
But, there is good reason. Many of these tier one funds have worked years on perfecting what we would call governance. Right? How do they make investment decisions? How do they structure their org? What's the relationship between Analysts and Principles and GPs and how is ownership split between the fund who has carry, who doesn't?
There was a lot of thought that went into the design of that structure. I think we will also have to put a lot of thought into the design of an investment DAO. I don't think it's the sort of thing that's going to just work right off the bat. And I see this in some of them I'm in now where I've developed a belief that not everyone should be voting on every deal.
There's probably some sort of collective based or squad-based system, based on expertise to know how and what part of the investment DAO you're contributing to, where members of the DAO should participate on that squad or in that collective?
I think what will happen is you will have, and you see this already, you don't necessarily have the GPs that are only committed to their fund, right? Like I'm in multiple investment DAOs where multiple people in each DAO are in a bunch of other DAOs right? And so you don't have this notion of owning the GP and that being your full-time job, it's more, you have a bunch of people who are investors, but investors are like any other contributor and they're contributing to these DAOs in the ways that they can best contribute to the DAO.
And so I think you might have centralized like leadership teams for each DAO, but it's going to be much, much more flexible than right now. In the investment world, you have these walled gardens, siloed, big firms, and I think that's going to get broken. And I do think if you look at who has the best insights, especially at early stage it's people who are using these products, it's people who are in the community, it's customers.
It's the people on the ground floor that look the exact opposite of an old school, General Partner at a tier-one fund. And so if I had to bet on who's going to find these deals and pick winners in web 3, I would bet on the people using the protocols and in the DAOs all day. And therefore, if we think that they can find the best things first, I think it's fair to assume that with the right structure and system, we should be able to collectively make good investment decisions.
NA: Yeah, I hear you. I think there is definitely a little bit more time until it plays out. And I agree with you that I don't think everyone in the DAO should be making the investment decisions. My most recent guest used to work at a fund of funds investing in crypto funds. And I asked him a similar question and he had some great insight.
He said it's quite difficult for investors to have contrarian views and it's even more difficult for investment DAOs which usually have a hive mind to make contrarian bets. So it'd be interesting to see how they perform in a bear market compared to the current market where nearly everything kind of is a hit.
JP: I agree and I think that's the other thing. I'm starting the process of decentralized Awesome People and I thought a lot about how we're going to do this, and I've been really grateful to study with a lot of the best web 2 investors that have been through multiple cycles. And one of the things that I've taken, especially from the team at Floodgate, Ann Miura-Ko and Mike Maples, is the importance to have certain investment frameworks and I think that is something that's going to be important to our investment DAO as well, as opposed to like, here a quick pitch, everyone gets to vote, you know, sign a multisig and like transfer money from one wallet to another. I think there to make world-class decisions, there has to be a little bit more structure to survive a bear market.
NA: What are your thoughts on one of your most recent investments, Syndicate Protocol, regarding what we just spoke of?
JP: I mean, I love Syndicate. I think I'm talking to them right after you. I think the opportunity to decentralize the private markets is huge and I'm not even going to say like, just decentralized, early-stage investing because you can imagine you and all your friends, forming different syndicates and different friends, you know, managing, you know, DeFi, managing NFT buying, managing angel investing and it's really anything that you can invest in the ecosystem. It could be a startup. It could be like a plot of digital land, right? But this ability to pull and invest money together in a really fluid way is a huge unlock, especially because this is the part of the market that has the returns.
So previously markets with the highest returns have been inaccessible to people. Whereas now anyone with an Opensea account, if you've been riding this NFT wave can outperform top tier venture funds.
NA: Yeah, for sure. Have you been buying many NFTs yourself?
JP: I can't say I'm super deep down the NFT rabbit hole. I'm trying to stay focused on building Awesome People, but it is very tempting. Then again, I think any time there is a bull market and quick money somewhere, it can be really tempting. I just am really passionate about building Awesome People.
And so I'm trying to stay focused. I'd say my one side project, which is become more than a side project is probably DAO Masters, but that's, that's just so core to the things that I care about and ladders up to being helpful for Awesome People as well. I'm learning a ton.
NA: Yeah, no, I love that. What's a secret obsession of yours that not many people would know about?
JP: I'm really obsessed with watching the sunrise and sunset. I try really hard to see the sunset every day. It's a bit hard right now. My calls are all during the evening time because I'm in Europe, but I think it is the most grounding, centring, beautiful part of the day.
NA: Yeah, I love that. What's the most recent investment that you've made that you can publicly speak about and why did you make it?
JP: I don't think this team has announced, so I won't say the name, but I can say why I made it. There was a product that I saw in the wild that I loved and it had the easiest UX of any web 3 product I'd ever engaged with, and web 3 products are notorious for having terrible UX and terrible onboarding.
And so I started playing with it and then realized, not only was it a cool thing to play with, I actually had a use case for it. And so then I wanted to become a customer, this particular tool isn't paid, but at which point I wanted to get onboarded. So I met with the team and ended up in their telegram and could just see all the activity and see the community they were building.
And then at that point, I was like, this is a fire product. Clearly, this team is thinking differently because they've really prioritized UX in a way that's hard. Great community, great team, great product. If I can use it, a lot of people can use it because the barrier has to be quite low and I was in their telegram so I could watch them iterate.
I was seeing how fast they ship. They ship so fast, and so that combination, I was like, yeah, can I write a small angel cheque.
NA: Yeah, that's fantastic. That's all the questions I had Julia. Thanks so much for jumping on. I really appreciate your time.
JP: Yeah. And you, and your morning, I hope your day is super exciting and fun
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Disclaimer: The Inquisitive VC is provided for informational and educational purposes only and is not intended to provide commercial, financial or legal advice. Nothing in this article constitutes an offer of securities or regulated financial products or financial services to any persons or a solicitation to buy or sell any tokens or securities or to make any financial decisions. Do not trade or invest in any project, tokens, or securities based upon this podcast episode. The host may personally own tokens that are mentioned on the podcast.
Julia Lipton - Awesome People Ventures