March 2, 2023

Felicis Fund IX: helping founders engineer their own luck

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Most people only see the outward successes. The uprounds. The exits. The celebratory tweets. 

Sometimes, it almost looks like pure luck.

But behind the scenes, we’ve seen how the very best founders tenaciously engineer success:

  • It’s the courage to start and the grit to persevere. See Ken, Nichole, and Ryan, who started Credit Karma amidst the 2008 recession and built it into a multi-billion dollar company.
  • It’s an unwavering belief in an audacious vision and the clarity of thought to visualize it. See Melanie, Cliff and Cameron from Canva, who have made creativity accessible to hundreds of millions of people, guided by the north star of a simple two-step plan.
  • It’s understanding that polished results take years of iterations. See Ivan, Simon and Akshay, who brought Notion back from almost ruin and turned it into a thriving platform supercharged by its community. 
  • It’s a relentless commitment to raising the bar. See Rachel from Guild Education, who doesn’t shy away from sharing her ethics while building a conscientious company that empowers millions to thrive in their careers.
  • It’s the under-the-radar discipline that compounds. See Pieter and Arnout, who have led Adyen through remarkably efficient growth that persists years after the company went public.

Outlier founders welcome anything that will make themselves and their companies more resilient – unbreakable, as we call it. We love backing these founders, and will continue to do so from our new core $825 million fund. 

Each new fundraise prompts us to reflect on where we came from and where we’re going. In the last 15 years, we’ve witnessed over 100 exits and $220 billion in market value created by Felicis-backed companies. While we’re proud of these results, it's all the founders we’ve supported, regardless of company outcome, that really inspire us. They trusted us to be there through their highs and lows: the first million-dollar customers, the stellar executive hires, and the “wow” product discoveries, but also the moments of existential doubt, painful separations, and down-to-the-wire crises. We’ve learned the most in the difficult moments.

Losing money on an investment isn’t the hardest part of our job. What’s more painful is seeing a company not reach its full potential due to things that were in its control. Every company encounters obstacles, like macroeconomic or competitive headwinds. How they prepare and respond is what matters. Our team’s diverse experiences, skills and perspectives serve as navigational guides—a GPS that doesn’t make the decisions, but can present the potential paths forward. 

We pioneered the concept of investing directly in founders through our 1% founder development pledge nearly five years ago. We’re approaching 100 founders who have benefitted from the program, which is consistently cited as the most beloved and unique element of the Felicis approach. Empowering founders to scale themselves along with their companies is a force multiplier. 

Every startup is in a race against time, and we feel a great sense of urgency to help founders  optimize the key levers in their control to build efficient, resilient organizations. We see a strong link between culture and performance, and how precise telemetry can unlock inflection points. Outlier companies are built differently than the rest. They’re talent magnets, run like well-oiled machines, and are deeply admired. We’re obsessed with the challenge of helping every team we back get to this level. 

Felicis means lucky or fortunate. To us (and Seneca), luck is where “preparation meets opportunity,” and it’s how we like to invest. We aim to find technology platforms that improve the lives of everyone who comes across them and make organizations everywhere more efficient. Felicis-backed companies are doing just that, whether it’s by reinventing healthcare like Prenuvo, moving creativity forward like Runway, or providing mission-critical code security like r2c.

There are still so many sectors that can benefit from innovation. We’re actively backing teams tackling tremendous opportunities, such as: 

  • Revamping core infrastructure solutions for the cloud era
  • Improving energy efficiency, reducing carbon footprint or otherwise bettering our climate
  • Making people at every age stronger and more resistant to disease
  • Modernizing critical areas like supply chain and manufacturing
  • Reinventing financial services and beyond 

Of course, this list is not exhaustive because there are vast possibilities we can’t yet imagine. But there are founders who can, and we look forward to the magical moment when they let us in on their vision, and we can dream together about what happens if everything goes right - then start creating that better future together.  

Impact with integrity is a key element of our approach: when Felicis-backed companies succeed, they contribute to a global positive impact. Our returns support the work of our thoughtfully curated Limited Partners, including helping students access a college education, increasing childhood cancer survival rates, employing hundreds of Nobel laureates, and protecting hundreds of millions of square miles of land and ocean.

There’s a tremendous amount of luck involved in company-building, but we believe it can be engineered. And while it’s far from easy, it can be incredibly rewarding. Ryan from Flexport said it best: “If your number one value is learning, then there is no better way to explore the entire breadth of the human experience than through entrepreneurship.”

To us, success is about more than financial returns; it’s about finding lasting solutions to some of the world’s most pressing problems. It’s about contributing to a better future for everyone. It’s about continual learning and developing as people. Over the years, we’ve been thrilled to work with founders that also want to go in this direction. We’re excited to continue the journey.