In New York in early November, Dave and Brit Morin felt transported back a decade. The entrepreneurial duo were a fixture of SXSW’s tech startup “jam sessions” of the last decade. Rubbing shoulders with web3 creators and crypto enthusiasts at the NFT.NYC conference, they felt transported back to those frenetic, optimistic days.
“I haven’t been this excited about the internet since 2003,” says Dave Morin, best known for a key early role at Facebook and later cofounding defunct social network Path. “The internet’s really unhealthy right now, and I think we can do better, and that web3 is our chance.”
So, far from fade away after he stepped back from the venture capital firm he cofounded, Slow Ventures, and Brit Morin handed over day-to-day operations of her media and commerce site focused on women, Brit + Co, the married couple with two children are casting their lot to be important players in the internet’s next ten years. They’ve launched a new venture capital firm, Offline Ventures, with former Apple executive James Higa and Tonal cofounder Nate Bosshard.
Now, Offline Ventures is announcing that it has raised $100 million to invest in startups around personal health, web3 and consumer tech. Apple, where David Morin worked before Facebook, and where Higa was a long-time confidante of Steve Jobs, is backing Offline as an anchor limited partner.
First word on the fund was reported for subscribers to the Midas Touch newsletter on Saturday.
The investors chose Apple for its focus on health, the Morins say, as Offline will focus on investments in that sector, including personal health, women’s health and mental health, alongside bets on web3 and crypto companies and consumer tech startups. “The world has gone from mainframes to computer labs, to personal computers, to mobile phones and stuff in our ears and on our wrists. We’re getting to the point where the human is the interface, the human is the network,” says Brit Morin.
Offline Ventures has made 12 core investments to date across its three areas of focus. The partners will look to write $1 million to $2 million checks as the first lead institutional investor in companies moving forward, meaning Offline will be found at the pre-seed and seed stages. But the firm will invest larger sums if needed through special purpose vehicles, as it did for Clubhouse, the audio-based social network the Morins backed while it was still just a concept.
The $100 million fund does not include three rolling funds the Morins set up last year, as reported at the time by Axios. Those funds were a stopgap, they say now, after the partnership set out to raise Offline Ventures with exquisitely bad timing on February 28, 2020. Covid-19 paused fundraising until the beginning of this year, but wanting to stay investing, they deployed about $5 million in several dozen investments through the rolling funds, backing Clubhouse and productivity app Notion, now valued at $10 billion, among others.
Learning from the “solo capitalists” writing fast checks in the current funding environment, Offline partners are empowered to make their own investment decision after sharing their diligence and discussing a startup with the group, Dave Morin says. One common thread: all will continue to plan “offline” excursions for entrepreneurs, as Bosshard, a cofounder of smart home gym Tonal and a veteran of Burton, The North Face, GoPro and Khosla Ventures, is known for taking founders skiing in British Columbia; Higa, meanwhile has helped organize visits to Japan for entrepreneurs from the likes of Allbirds, Robinhood and Sweetgreen.
The firm’s focus on health, meanwhile, extends to its term sheets: Offline’s partners say they’re working out new metrics to include in the agreements they sign with portfolio founders to make a “well-being term sheet” a reference point of their company building with measurable impact. “What we’re trying to get out of this is more direct incentives, like where are you accounting for this in the P+L [profit and loss],” says Brit Morin. “It’s not just a bucket of money coming from us if you need therapy.”
A fund of Offline’s size can prove a ten-year commitment for its investors, especially if they take board seats or a more active role with their entrepreneurs. Such a new foray may seem a surprise for all of Offline’s partners, but especially the Morins, who have already made hundreds of startup investments to date, been in Silicon Valley’s scrutiny for years, and for whom it will prove a challenge to be known for new career acts versus their previous. But the Morins say they love tech, and Silicon Valley, too much to “just fade out.”
Why should a new generation of entrepreneurs turn to power brokers from the last one for help building their businesses? By working hands on with startups – Brit Morin is working on incubating several projects in web3 and women’s health – the two argue they keep refreshing their credentials by “staying in the arena.”
More personally, Dave Morin admits that he’s also asked often about what early Facebook employees knew about the later ramifications of what they were building. To hear him tell it, much of the promise of the big tech companies like Apple, Google and Facebook remains unfulfilled, in large part due to the “ad-driven internet.” “I feel a great sense of responsibility in that,” he says. Web3 – and the promise of a creator-driven, decentralized internet – represents to him “another swing at it.”
“If you have a platform right now, I think you have a responsibility to meet the moral moment as much as the business moment,” he says.
Forbes – Entrepreneurs