An Overview Of FJ Labs As A Marketplace Fund & Investors (Jeff Chat Clip)

8 Nov 2021 · 3 min

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This content was created by Max Brun. This content was uploaded by Max Brun. This is a YouTube clip titled "An Overview Of FJ Labs As A Marketplace Fund & Investors (Jeff Chat Clip)" (published Nov 8, 2021). The excerpt is an interview-style explanation from a representative of FJ Labs describing the firm's model: two practices with a primary focus on angel investing at venture scale, building the world's largest portfolio of online marketplaces, and providing passive, non-leading capital ($250K–$500K checks; typically 5%–20% of a round). The speaker explains their quick two-call decision process, the value they add (sharing KPIs and best practices), and how they facilitate future fundraising via warm introductions to marketplace investors. The transcript shows two participants (an interviewer and the FJ Labs speaker).

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I think most of us here are familiar with FJ Labs, but I guess for those that might not be as familiar, could you give us a high-level overview of it?
Sure. So we really have 2 practices and one has really become the main focus. And the way you can think of us is you can think of us as angel investing at venture scale. And so when I say angel investing, what that means is truly act like individual business angel investors. And so that means we're not leading deals, we're not setting the terms, we're not taking board seats, we're not hands-on, but we have assembled the world's largest portfolio of online marketplaces. We have vast experience running and incubating marketplaces. And so our value-add to entrepreneurs is we have this incredible portfolio of marketplaces that we can share learnings, we can give you KPIs, we can help you understand best practices, we can give you advice when you ask. It's purely like a passive thing. You come to us and you tell us what questions you have. We will never impose on you. And we write small tickets and decide quickly. So our typical investment size is $250K to $500K. We're typically making up something like 5% to 20% of of a round size. And we decide in 2 phone calls, provided there's a lead and terms in place. So a typical round might be a $3 million seed round led by NFX, and we'll come in for $150K to $300K. And we will, once the lead is in place, we take our— so we have a first phone call where we get to know you, we ask a series of questions, we try to understand the business. You have your lead investor, we take a very quick second call from someone else on the team. And then we make our final yes or no decision. And it's really that simple. And, and the other thing that we're super helpful on is not only just the marketplace portfolio and expertise, but it's actually future fundraising. Because we are angel investors, we're not leading, we don't have— there's no incentive misalignment. When you raise your next round, we're happy to introduce you to all of the marketplace investors around the world that matter. And Fabrice at OLX was backed by Jeremy Levine at Bessemer, who's backed by Founders Fund, Peter Thiel, who's backed by General Catalyst, all these amazing marketplace investors. We can get you in front of them and get you a warm intro. So helping you raise your, your future next round.