The Ledger
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Top-performing venture deals frequently lack consensus conviction among firm partners
“It's really hard to get two or three people to have the same conviction on similar deals, but it doesn't mean that the deals aren't great because a lot of our winners were deals where we weren't both positives.”
Pierre-Jacques: Silicon Valley's ecosystem does not exist for diverse founders
“Silicon Valley exists for other founders, but doesn't exist for the founders that we're serving.”
VCs backing the best founders cannot ignore 70% of the population
“And so I don't believe what any VC says, hey, we're backing the best founders when you're only investing in 30% of the population.”
Harlem Capital automatically exercises pro-rata rights unless a startup significantly underperforms
“We typically do pro rata for most of our companies. I mean, unless you fall off a cliff, we're going to do pro rata, and we signal that to the founders. Part of, hey, we're leading Your seed round, we're going to be supportive in your seed plus or your series …”
Klein: MSK backed Harlem Capital for returns, not purely diversity
“And we didn't approach them as a diverse manager per se. We approached them as a manager that was going to make a lot of money and had a good objective, a good strategy, a good philosophy.”
Partners shared positive conviction on only two of 28 Fund I deals
“Of the 28 deals we didn't fund one, I think two of them, maybe three, Jerry and I were both positives.”
Pierre-Jacques: Only one or two firms backed diverse founders at scale in 2018
“Essentially there was like one or two firms Three years ago that we're doing this at scale.”
Tingle: Harlem Capital ignores deal terms outside of economics and control
“We don't spend time on things that aren't economics or control.”
None of Harlem Capital's team had prior VC experience before joining
“No one who's worked with us has done VC before, but they're incredible, capable folks.”
Pierre-Jacques: Diverse founder density is highest in e-commerce, fintech, wellness, enterprise software
“I think from a, where we've seen density for diverse founders has been e-commerce
Fintech, wellness, enterprise software, and now we're diving into crypto as well, which I think it's undiverse, but we're hoping it does become more diverse.”
Pierre-Jacques: Harlem Capital leads probably 80% of its deals
“I mean, we lead probably 80% of our deals and then help our companies fill the rest of their syndicates.”
Harlem Capital prefers to back spiky founders over well-rounded ones
“We're not looking for founders that have everything. We're looking for people that are exceptional on those critical dimensions.”
Harlem Capital caps partners at seven deals annually to manage deployment
“Fund two, it's pretty similar, but now there's three partners, so seven deals per partner per year is kind of the max, and four of those seven deals, it can be a single partner positive for the deal to go through, and then three of the deals, you have to have …”
Harlem Capital hired its entire investment team from its intern program
“All of our investment team has came from our intern program, so having that ability to take this huge filter for talent Work with them for three to six months, and then hire them means that we know these people tremendously well.”