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Their differentiated skills help them source deals and aid founders, and ultimately drives returns
Key Takeaways
- Designer Fund is an early-stage venture capital firm focused on investing in areas that have historically lacked design resources - healthcare, financial services, blockchain, AI, climatetech, etc.
- Founding partner Ben Blumenrose has years of experience at Facebook's design team, and Enrique Allen has worked in design across the venture world at firms Venrock, 500 Startups, and Facebook Fund.
- They leverage this design experience to help early stage companies create a differentiated UX, source designers for their teams, and help them scale those resources.
- Typically, they get about a third of their deal flow from top tier venture capital firms who bring them in for design help, a third from their network of designers and founders, and a third through their own proactive sourcing in upcoming sectors.
Transcript
Hi, I'm Ben Blumenrose, managing partner of Designer Fund. Designer Fund is an investment firm that focuses on investing and founders that value design. We focus on pre-seed and seed-stage companies and investing in those founders and helping them succeed by building great products in spaces that lack design innovation - health care, financial services, blockchain, A.I., and climate tech. Today, we've invested in amazing category leaders like Stripe, Gusto, Notion, Omada Health, Netlify, and other amazing companies, many of which are now billion-dollar-plus companies.
Most investors don't have design as a background, and design right now is a very key and critical skill that is needed for startups to succeed. A simple example in terms of the difference design can make is the iPad. Feature for feature, there are many tablets that have the same features as iPads do, but because of the user experience of Apple and the iPad, people pay almost like a 5, 6, 7x premium on the iPad because of the user experience. And we've seen this in other spaces as well, in health care and financial services, where people will choose to pay a lot more for something that's much easier to use, solves their problem much quicker.
Designer Fund's strategy is pretty simple. So the first thing is we want to make sure that we own the design and venture ecosystem. So when people think, I want to have great design great product in my company, they come to Designer Fund. I've been a designer for almost 20 years. Prior to Designer Fund, I led the design of Facebook platform and Facebook growth, and so I have experience building products for hundreds of millions of people. And Enrique Allen is one of the few people that has both a design and venture background. So Enrique has worked at places like Venrock, 500 startups, and Facebook Fund. Number two is build great relationships with the best lead seed and pre-seed funds. So we co-invest with funds like Andreessen Horowitz, Kleiner Perkins, First Round Capital, General Catalyst, and many other amazing individual designers, like Elad Gil and Scott Belsky. And basically, because of our unique value add and a very collaborative check size, they come to us with really great opportunities. And then the third thing that is key to our strategy is part of differentiated design value-add. There are very few firms that can actually offer the kind of design support that we offer. And founders that value design seek us out very consistently for that critical skill. We work with the founders of the early design team to ensure that product and design is established at a really high level within the company.
About a third of our deals come from the extensive design leadership, the network that we've built. So this includes the designers that have come to talk at workshops, designers at our portfolio companies, and founders that value design that we work with. I'd say about another third come from co-investors. We're often sought after by creative lead investors to co-invest alongside them to support the company and product and design early on because investors now really get the value of design. And then the last remaining set of deals is basically proactively sourced.
My partner Enrique and I, we're very intellectually curious. We're always looking at different spaces, and what spaces can design actually make a difference? There's two categories of spaces that we think are really attractive. One are spaces that have been around for a long, long time, but design innovation has been lacking because designers and engineers have simply not been focused on these spaces. The second type of category of spaces that we focus on are new and upcoming spaces. So blockchain, A.I., climate-tech, these are spaces where the fundamental technology is being built right now in those spaces. And once that's built, the next layer of infrastructure that needs to get built is the user experience layer. So a good example is a company like Coinbase. Coinbase came in and put a user experience layer that was much easier for the masses to use. And it made crypto more accessible to a much broader set of people. So that's the second category of spaces that we focus on are new spaces where design innovation is just starting to get developed.
Important disclosures
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