If I Started an Investment Fund

by mikekarnj on November 22, 2009

Someday in the distant future, I would love to be an investor.  I’m a huge supporter of nurturing entrepreneurship (tech+social) in New York City, and would love to see more startups launching in that space. Let’s say I started a small $50M fund, I would split my investments over the following: 1) investing in companies; 2) investments to support the NYC startup movement; 3) donating to innovative non-profits; and 4) investing into people.

The companies listed below are in no particular order, and I selected them based on innovation/idea, management team, opportunity, and “excitement.”  Or in other words, whether I get excited by the idea or not.  The reason I have “excitement” listed as one of the filters for companies is because I would love to spend time with each of the companies and lend my ideas, creativity, connections, etc to make their ideas and companies more successful.

New York Based-Companies

  1. Kickstarter is a new way to fund creative ideas.  Kickstarter is a funding platform for artists, designers, filmmakers, musicians, journalists, inventors, explorers…
  2. Behance is a company that organizes the creative world to make their ideas happen.
  3. Harvest allows small businesses to track time, log expenses, invoice clients, keep track of account receivables and revenue.
  4. Foursquare gives you and your friends new ways of exploring your city.
  5. 20×200 (Jen Bekman Projects) is a website for art collectors. The site releases at least two new limited-edition prints a week: one photo and one work on paper.
  6. Hunch is a decision-making site that gets smarter the more it’s used.
  7. By/Association is a private service for personal introductions to remarkable people.  (Disclaimer: I’m Co-Founder)
  8. Eat.ly allows you to track your meals and discover new social food via images.
  9. TBD is a free email newsletter that delivers one world-shaking idea and one collective action to improve our future.  (Disclaimer: I’m Co-Founder)
  10. Hello Health is an innovative new primary care practice platform that helps doctors communicate, document, and transact with their patients in person and online.
  11. Quirky is a social product development company.
  12. Boxee is the first social media center, an open-source software platform for entertainment across computers or traditional living room devices.
  13. Carbonmade helps you build and manage an online portfolio website.
  14. Frogtek is an early-stage social venture that will bring the IT productivity boom to micro-entrepreneurs in the developing world.
  15. SHE “is developing a franchise model to manufacture and distribute eco-friendly sanitary pads using local materials, such as banana fibers. The aim is to sell pads for 30 percent less than existing brands, while creating a profit so that the model can be self-replicating.”

Outside of NYC Companies

  1. Vittana is an early-stage startup bringing student loans to the developing world through the power of person-to-person microfinance.
  2. Fitbit accurately tracks your calories burned, steps taken, distance traveled and sleep quality.
  3. 23andMe provides genetic testing for over 100 traits and diseases as well as DNA ancestry.
  4. NAKEDpizza’s mission is to make an unhealthy and popular fast food healthy, raising consciousness about nutrition, health and the food supply, as well as the social impact and obligations of modern business.
  5. Full Tilt Poker is the fastest growing online poker room.

Investments to Support NYC Startup Movement

  1. I would invest into incubator programs like the Y-Combinator, Unreasonable Institute or Techstars version based in NYC.
  2. I would invest into world-class events like The Feast (Disclaimer: I’m Co-Founder) or TEDxNewYork (if there is one).
  3. I would invest into co-working spaces such as New Work City and Green Spaces.

Investments in Innovative NYC Non-Profit Organizations

  1. charity: water is a non-profit organization bringing clean and safe drinking water to people in developing nations.
  2. Echoing Green invests in and supports outstanding emerging social entrepreneurs to launch new organizations that deliver bold, high-impact solutions.

Investments into People (Superstars)

Rafe Furst wrote an article on “investing into superstars” where investors would buy a percentage of someone’s expected lifetime earnings.  I followed up with a whole article on why the idea is so revolutionary (and light years ahead of its time).

Imagine you are in your early twenties, out of college several years and your best friend, who recently came into an inheritance of $300K cash told you they could think of no better way to invest the money than to invest it in you.  Not the company you started, not as a loan, but invest it in YOU, as if you were a startup.  In return your friend said all they wanted was 3% of your gross income for the rest of your life.  Do you think you would take it?

Now what if your friend said that they didn’t care what you did with the money or how much you made each year.  If you wanted to sit on a beach in Nicaragua learning to surf, go work in the Peace Corps, stay at home and do your art projects, whatever you want it would be fine, just as long as you made sure to always pay the 3% of whatever you make (as little as that may be).

And finally, what if your friend said you could buy out of your obligation at any point for $6 million in cash.  Then would you take the deal?

I would do the same for this investment fund.

So, all in all, these are the companies, ideas, and people that would make up the portfolio of my investment fund.  Obviously, the fund would make these investments to turn a profit and get a nice return.  But, I also believe in supporting the greater good — supporting the startup movement already happening in New York City.  Who would you add to the list?

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