The idea of someday becoming a venture capitalist was always in the back of TJ Taylor's mind.
After all, he had an extensive technical background. He co-founded Stock Apps and worked in the communities of dating app Raya and photo-sharing app Dispo. After retiring from Dispo at the end of 2022, he found himself in a new situation. “It was the first time I didn't know what was going to happen next,” he told TechCrunch.
He wandered a bit and started a startup consultancy, where he said he loved working with early-stage teams. “Some people in my network straight up said to me, 'Why don't you consider starting your own small fund?'” he recalled. “'Where do you start? I didn't even know if it was okay.''
There he became a scout for Headline, finding footing in an industry that was experiencing a historic recession at the time. While the headlines focused on Series A and beyond, Taylor was always trying to convey early-stage deals. Once the headline passed, he continued to send it to his network until it became clear that his friends were right. I should have started my own fund.
There he founded Hobart Ventures, named after one of the streets in South Central Los Angeles where Taylor grew up. He started working on it last December, started publishing it a few days ago, and has already produced several LPs. The company has raised $8 million in funding focused on early-stage consumer startups. He hasn't invested from the fund yet, but said there are several startups he'd like to write checks to. The average check size will be between $150,000 and $300,000, he said.
His consumer focus is a natural fit given his background. Consumer startups can be hit or miss for investors. Some people are extremely bullish on the category, while others sigh at its mention. Still, as Taylor pointed out, consumers are a very large category. According to Carta data, consumer technology raised 7.1% of all venture funding last year, down slightly from the previous year but more than hardware, energy and cryptocurrencies.
“As technology changes, as the macroeconomic climate changes, behavioral changes occur, and generational changes occur. That's an opportunity, right?” He noted that society is currently undergoing change. “Consumer spending is still hot. Consumers are still spending money. Consumers will always find ways to spend their money.”
He said that while raising capital for the fund wasn't too difficult, he realizes that investors have not yet returned to the free-flowing days of the ZIRP era. But he's optimistic about the future of the industry, especially once the IPO market opens up again and LPs start earning profits and returns and are ready to reinvest. “Obviously, with the rate cuts, there will be more money for LPs on the sidelines, or hopefully some distributions will go back to LPs to invest in funds and startups.”