VENTURE CAPITAL

VC Fund Built from a Meme (Well, Kind of)

Turner Novak launched his debut fund for Banana Capital with $9.99M and was oversubscribed.  That popularity is due in large part to the unique approach he has taken both with the investing strategy of his fund as well as the ways he gains attention for it.  The meme below tells all.

announcing TikTok startup pitch: duet this video pitching your startup

👉 https://t.co/gNTBfrUzW7 pic.twitter.com/aJUtmcYgIx

— Turner Novak (@TurnerNovak) October 20, 2020
This ‘mock pitch to a VC’ was a viral tweet with over 186,200 views on Twitter – it should probably be an NFT.  It actually led to an investment in a company as well.

Internet first approach
Banana Capital looks for consumer tech founders from all corners of the web – its hunting grounds and network are the internet rather than any geography like Silicon Valley or Miami.

“My network is not in San Francisco and New York, it’s more so just people like on the internet,” he said. “That’s just how I meet people.”

The plan for average check size is between $25,000 to $300,000. Investors in Banana Capital include Winnie co-founder Sara Mauskopf, Andreessen Horowitz general partner Sriram Krishnan, GGV managing partner Hans Tung and VC Starter Kit.

Low ownership stakes.  Novak is especially interested in early-stage startups in the social, healthcare and e-commerce sector. Unlike most seed/pre-Series A funds which want 15-20% ownership stakes in their portfolio companies, he is targeting ownership between 0.2% to 3%.

According to Novak, this allows him to have flexibility in what funding rounds he can participate in with his companies in the long term.  There are 11 companies that have been disclosed in the firm’s portfolio, including Flexbase, Skillful, Bottomless and Lolli.

Why Banana Capital for the name?  “There really are no fruit funds out there,” Novak said. “My vibe is that I take myself a little less seriously than other people and the name just reflected that.

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