- Venture Capital
Sid Mofya on Building and Scaling the Draper Venture Network: an International Network of Funds
What is the Draper Venture Network?
The Draper Venture Network is a global alliance of over 20 independent venture capital funds: each firm raises its own money, has its own investment thesis, and is typically a leading fund in their geography.
All these unique firms are joined together as part of the Draper Venture Network’s mission to unify entrepreneurial hotspots around the world.
Sid Mofya, a Kauffman Fellow, is the COO of the Draper Venture Network and has one of the most interesting roles in venture capital: helping his team coordinate the alliance of member funds and providing post-investment support for their collective portfolio of over 900 companies.
Sid’s journey into the venture capital world is fairly non-traditional. Sid was born in Zambia and studied in the UK as a chemical engineer. After college, he went to work for Shell as a chemical engineer at an oil refinery. Sid yearned to move back to Africa and make an impact on the local communities there, so he left Shell for business school and eventually moved to Tanzania to work for a healthcare organization doing medical research that focused on diseases such as HIV/AIDS, malaria, and influenza.
It was around this time Sid started looking into venture capital and entrepreneurship with a greater focus.
“I looked at the local entrepreneurial ecosystem and thought about the various constraints and was trying to figure out how I could help,” says Sid. “To a great extent, availability of venture capital was limited in Africa and I wanted to help change that. I got in touch with as many people as I could, including the Kauffman Fellows, to learn about how people around the world have been deploying venture capital in their respective ecosystems.”
Sid eventually got in touch with the Draper Venture Network, which was searching for someone to help build a support platform for their global investments. He has been helping the Network grow since.
How did the Draper Network evolve into what it is today?
The Network was started by Tim Draper in 1990 when he formed a government-backed fund in Alaska called DFJ Polaris. At the time it was called DFJ Network, and each of the funds affiliated with it had a DFJ prefix. The whole idea was to bring together investors from all parts of the U.S. so they have more access to deal-flow. Draper’s conviction back then was that entrepreneurs are going to come from everywhere, not just Silicon Valley– and this is an idea he’s been advocating ever since.
The Network grew quickly and went international in the 2000s with pivotal spokes such as DFJ Esprit in Europe and DFJ JAIC in Japan.
The model proved its value very quickly by sourcing investments in notable companies like Baidu, DivX, Skype, and Hotmail.
In 2013, the Network was spun-out from DFJ and became Draper Venture Network. The changes included a new, independent governance process and a greater focus on the services that the Network team would provide to the member funds.
“The idea was always to have a member fund in each global tech hub,” says Sid. “The spin-out allowed us to improve the value offering and begin recruiting high-quality regional funds, all of whom wanted access to a team in the Valley but also valued the VC relationships around the world.”
Today, DVN consists of over 20 member funds and supports a full-time Services team based in Silicon Valley, of which Sid is COO. The Network currently has member funds across Asia, Australia, Middle East, Europe and North, and South America. The funds are currently deploying over $2B in assets and are invested in almost 1000 active portfolio companies.
In 2015 they launched the “DVN Seed” program, which was aimed at bringing in earlier-stage funds investing at the pre-seed and seed stage. The program runs alongside the main Draper Network and member funds have access to the same resources and events. The intent is to build relationships with budding VCs and expose them to the world’s best investors and investment infrastructure. It is also meant to be a testing ground for first-time funds, emerging markets, and alternative funding platforms.
“Today our Network consists of funds investing in pre-seed to growth stage, and across every sector and sub-sector you can imagine!” added Sid.
Can you tell us a little bit about what your team does?
The DVN Operations team manages the Network and ensures the various needs of its member funds are being met. In addition to providing valuable shared services to the DVN Funds and their 900+ portfolio companies, the team also serves as the coordination hub for connecting Member VCs and CEOs to one another. It is a small, entrepreneurial team that is continually innovating to improve its offerings to its members.
“Ultimately, our priorities are set by the member funds. The main thing we do is make sure our funds and entrepreneurs have the clearest path to success as possible. Over time we have learned that the relationships we build with other players in the ecosystem (corporations, accelerators, and the broader VC community) have a compounding impact when brought into a Network like ours.
Some of the services offered by the DVN Ops. team includes a dedicated team for Business and Corporate Development (for Portfolio Co.’s), Due diligence and deal-sourcing support (for VCs), Deal syndication and follow-on funding, VC intros, and more.
The most actively used offering by DVN’s members is the Business and Corporate Development effort. Having one shared team build deep relationships with global corporations – on behalf of 20+ funds – makes sense for both the startups and the corporations who end up becoming their customers, partners, and acquirers. “The large corporations are keen to work with us because we offer them a large and diverse portfolio of global startups that not many other entities can match” added Sid, who was responsible for launching the Corp Dev effort.
DVN’s Corp Dev team is leveraging some of its own technology to amplify its efforts. Last year they partnered with a portfolio company in Spain to build an online platform to connect startup founders to corporate innovators. “Our hypothesis was that corporates wanted two things: good curation to help them identify relevant startups, and frictionless but not-spammy ways to connect directly with their founders.” An enhanced version of the platform, called Virtual CEO Summit, will be rolled out to a larger group of corporations this year.
DVN provides additional services for their portfolio CEOs. Through a private Member Web Portal, they enable CEOs to request introductions to hundreds of VC firms that the Draper Network VCs have co-invested with, including those on Sand Hill Road and other blue-chip VCs. The Portal also includes a database of preferred vendors, media/PR contacts and special discounts from large vendors (think Apple, AWS, etc.) and smaller DVN startups offering special deals to their fellow CEOs.
How do you go about setting a regular cadence for your community to interact?
DVN hosts a series of online events, roundtables, and webinars, but it’s the in-person events that are critical to maintaining the human connectivity that helps their network flourish. They host an annual CEO summit every Fall with over 200 of their startups and about 100 corporations.
“It’s a great time for founders to meet other DVN founders,” says Sid. “As part of this Summit, they curate 1-on-1 between corporations and their startups. In Spring, we host an annual retreat for the fund managers, called the GP Spring Forum, hosted by a different fund in a different part of the world each year.”
The idea behind these meetings is that the fund managers come together to explore an emerging tech ecosystem, further deepen their relationships and participate in structured sessions to share VC best practices. Their upcoming Spring Forum happens to be in India where host member fund Blume Ventures will guide the group through Mumbai and Bangalore, and end with an excursion in Goa.
“The Network gets stronger after each of these events,” comments Sid. “You can see the emails and phone calls amongst the members increase and more co-investments get done. But engagement is also as simple as having an active WhatsApp group. Our team’s biggest challenge is maintaining that level of engagement throughout the year.”
The Draper Venture Network is a unique entity in the venture world, there is nothing quite like it.
“It’s an ambitious concept that Tim Draper set out to build 30 years ago”, says Sid, “and we’re proud of what it’s become and the success it has catalyzed for so many startups across the globe.”
By creating a platform to connect entrepreneurs, funds, and corporations, Sid and his team have been able to shine the spotlight on more nascent ecosystems, like those in Africa which he envisioned helping before landing at DVN.
“I feel very grateful to be at this nexus of activity in the venture space,” comments Sid. “It is rewarding to know that my efforts can be making a meaningful impact, either by helping one of our portfolio companies land a customer, or our fund land an exit.”
The DVN Operations team is looking to add more remarkable people to its team this year. You can find out more at www.drapernetwork.com