ODX Investment Memo: Exploring the Intersection of Silicon Valley and Not Boring Capital

ODX Investment Memo: Exploring the Intersection of Silicon Valley and Not Boring Capital

Silicon Valley has long been hailed as the epicenter of technological innovation and entrepreneurship. It represents a mindset that thrives on unconventional ideas and embraces failure as a stepping stone to success. In this digital age, the influence of Silicon Valley extends far beyond its physical boundaries, as it has become a virtual hub of knowledge and collaboration.

Technology has emerged as a key driver of global economic growth, fueling job creation and improving the quality of life. From tackling climate change to developing vaccines, technology has played a vital role in addressing some of society's most pressing challenges. It is through technology that humanity primarily progresses, and this progress is often spearheaded by startups.

Enter Not Boring Capital, an $8 million venture fund that seeks to invest in companies with compelling stories and helps amplify their narratives. This fund primarily focuses on seed through Series B investments, although it occasionally makes pre-seed and growth-stage investments. The founder, Packy McCormick, believes that his dual roles as an investor and writer create a powerful flywheel that enhances his abilities in both domains.

Fintech emerges as the leading vertical for Not Boring Capital, with the fund making six investments totaling $525k in this sector. However, the fund also diversifies its investments across various other industries, recognizing the potential for substantial returns. There are three investment approaches employed by Not Boring Capital: Core, Explore, and Growth.

The Core strategy entails investing in companies that have the potential to generate significant returns, potentially even returning the entire fund in the best-case scenario. This approach accounts for approximately 75% of the fund's investment portfolio. On the other hand, the Explore strategy involves smaller investments aimed at securing a seat in subsequent funding rounds or increasing deal flow. While these investments may have high upside potential, they are too small individually to expect fund-level returns. Explore investments typically comprise 5-10% of the total invested dollars. Lastly, the Growth strategy focuses on safer, later-stage investments that offer a lower ceiling but a higher floor. This approach aims to collectively return the fund once and typically represents around 20% of the invested dollars.

Not Boring Capital recognizes the power of community in driving success. It leverages the vast network of Not Boring readers and portfolio companies to create a virtuous cycle of support and collaboration. By engaging with smart individuals, sharing knowledge through writing, and making strategic investments, Not Boring Capital aims to make a lasting impact on the startup ecosystem.