Venture Socialism

How "New Power" and the internet is changing Venture Capital

Hey folks!

This week, I’m sharing a Twitter thread I wrote about how social influence is a new form of capital.

I don’t think this trend is going anywhere. If you are a new VC and you aren’t building a platform / community, you’re likely to struggle in the long term, because you need to think about how to channel power through networks like current, not hoard power like currency…

Patrick Ryan @ry_paddy

In the 21st century, social influence = capital (thread)

Patrick Ryan @ry_paddy

1/ The pace of this transformation is accelerating 2007: 50 Cent earns between $60m and $100m after the Coca-Cola Company acquires Vitamin Water

Patrick Ryan @ry_paddy

2/ 2014: Apple acquires Dr Dre’s Beats brand for $3 billion in cash and stock

Patrick Ryan @ry_paddy

2019: @TheNotoriousMMA 's whiskey brand Proper Twelve generates $1 BILLION in retail sales (3.3 million bottles) in its first full year of operations.

Patrick Ryan @ry_paddy

4/ Meanwhile in China, Ruhnn, an influencer factory, raises $125m in IPO on @Nasdaq @ $600m valuation

Patrick Ryan @ry_paddy

5/ 2020: @shl , @gumroad founder, raises a $5 million VC fund with 1 tweet, a Notion memo and a zoom call with 1,800 participants (not a huge fund, but bear with me…)

Patrick Ryan @ry_paddy

6/ New Power is taking over from Old Power. “New power models are enabled by peer coordination and the agency of the crowd.”

Patrick Ryan @ry_paddy

7/ “Old power works like a currency. It is held by few. Once gained, it is jealously guarded and the powerful have a substantial store of it to spend. It is closed, inaccessible, and leader-driven. It downloads, and it captures.”

Patrick Ryan @ry_paddy

8/ “New power operates differently, like a current. It is made by many. It is open, participatory, and peer-driven. It uploads, and it distributes. Like water or electricity, it’s most forceful when it surges. The goal with new power is not to hoard it but to channel it.”

Patrick Ryan @ry_paddy

@BrewDog , the fastest-growing beer brand in history (founded 2007, worth approx $2 billion), has a crowd (army) of over 50,000 shareholders. It has made many of them wealthy.

Patrick Ryan @ry_paddy

9/ Prediction for VC over next 20 years: unbundling and fragmentation, @AngelList’s rolling funds become increasingly influential, some of most successful GP’s are social media influencers backed by thousands of people. Platforms like @Crowdcube also mature.

Patrick Ryan @ry_paddy

10/ The first billion dollar equity crowdfunding platform will emerge, as predicted by @kevin2kelly in “The Inevitable”. Probably @AngelList . @naval be chillin’ 😎

Patrick Ryan @ry_paddy

11/ Long term potential: collective intelligence systems take over as LP’s finally realise they deliver superior returns. (See "Superforecasters" by @PTetlock and "the wisdom of crowds" by @JamesSurowiecki )

Patrick Ryan @ry_paddy

12/ Sign up w/ @JoinOdin to participate in the new power VC economy in Europe.

joinodin.comOdin: the VC Hive MindOdin is a collective intelligence platform for investment. We work as a community to find, assess and invest in early-stage tech companies. Anyone can apply.

Patrick Ryan @ry_paddy

13/ Essential reading: hbr.org/2014/12/unders… Superforecasters by @PTetlock The wisdom of crowds by @JamesSurowiecki

hbr.orgUnderstanding “New Power”The crowd is challenging traditional leadership. Here’s how to harness its energy.

See you next week 😊❤️