Startup studio super{set} made another exit in January when it sold marketing company Habu to LiveRamp for $200 million. Now, super {set} has doubled down on his enterprise startup building strategy and added an additional $90 million to his coffers.
“In some ways, not much has changed since our launch. We remain a venture studio focused on building a company rooted in data and AI. We found, funded, and built new technology startups in the enterprise space,” founding managing partner Tom Chavez told TechCrunch.
But it’s other parts of the market that have changed since 2019. And it sounds like Chavez was right. As TechCrunch reported at the time, building a “definitely boring but rich product” turned out to be a good enough bet for super{set} to now double down. To date, it has secured a total of $176 million in funding.
According to Enhance Ventures, one of the many venture studios in the world, “The venture builder phenomenon started in 1996 and has gained momentum over the past decade, with large amounts of capital and a long list of exits creating new opportunities.” It has become the standard.” However, the advantage of super{set} is that it is run by a builder with its own proven track record.
super{set} is backed by outside investors, including family offices and tech investors, but some of the capital comes from Chavez and his co-founding managing partner Vivek Vaidya. The two previously co-founded Krux, which he sold to Salesforce. And previously, Microsoft acquired Rapt, a company that Chavez co-founded and Vaidya served as CTO. Together, these two exits brought him $1.2 billion, and the two are currently putting some of their proceeds into super {set}.
“Our investors want to see that. They know that we're completely aligned in terms of the results and investments that we're making,” Chavez said. “But we're also very fortunate to have a very interesting and diverse LP base, who bring a lot of expertise and ask a lot of useful questions about what we're doing. I'll give it to you.”
There's no question that the studio is focused on AI, but unlike many investors who support fundamental AI, super{set} is more interested in what it calls AI engineering. Masu.
“The LLM foundation creates great opportunities for people like us who want to find ways to design useful applications that take advantage of all these types of systems,” Chavez said, adding that the LLM foundation We discussed the growing interest and innovation in language models.
Entrepreneurs could try this on their own, Chavez said, but Superset gives them an alternative to driving up and down Sand Hill Road trying to raise money for an unproven idea. It is said that it will be provided to you. “We remove all of that and allow the team to focus solely on the product and the customer.”
Venture studio, superset style
A more difficult funding environment could create a tailwind for venture studios, and not just because it makes it easier to attract entrepreneurs. Investors also want to know that if the company is successful, the studio will have enough ownership to make a significant profit.
However, there is a line between sufficient ownership and excessive ownership, especially when the added value is not clear. Although Venture Studios' territory is still fairly broad, Chavez says Superset's model is “completely different from what most Venture studios are doing.”
One big difference is volume. His super {set} of 16 companies in his portfolio is much more practical than a studio that creates a dozen companies every month. Initially, the number of companies established per year was 4-5, but this will further reduce to 2-3.
The two don't pursue every idea they come up with. One of her tools is Solution Notes. This is a version of a typical venture capital investment memo, which analyzes whether an opportunity is worth pursuing. Chavez said one aspect of the Super Set that has changed compared to 2019 is that the Super Set's methodology has moved from an art to a science.
Whether it's science or craft, Chavez and Vaidya are good at choosing the people they work with, said Alex, a limited partner at VC fund Transpose Platform, which has several startup studios in its portfolio. Bangash said. “Tom and Vivek are not only focused on hiring the right people, but also on identifying people with the grit to become co-founders and helping them develop and grow with the company. I'm leaving it there.”
After validating an idea, super{set} finds a product-oriented co-founder for the idea. Over time, that support moves from hands-on instruction to lighter-touch instruction, but without the cliffs of an accelerator program. In the early stages, recruitment, marketing, sales, and financing were supported.
Co-founders and subsequent companies can also work across the entire fourth floor of San Francisco's landmark 140 New Montgomery Building, which is also home to VC firm Greylock, in a new space that Super {Set} recently moved into. . Born and raised in Albuquerque, Chavez moved to San Francisco nearly 30 years ago and is bullish about the city, especially in its current “AI revolution.” Super{set} wants to keep it that way.