When it comes to backing startups, Hawke Ventures offers more than just funding.
An offshoot of prominent marketing agency Hawke Media, the venture capital firm was launched by Chief Executive Erik Huberman and Managing Partner Drew Leahy in September 2018 with the goal of blending early stage capital and media strategy knowhow.
Although Hawke Ventures has yet to secure the massive exits of more established Silicon Beach VCs, the firm is gaining attention by providing a suite of advertising tools to some of the area’s most active media, marketing and technology startups.
Its roster includes the subscription box service FabFitFun Inc., Tapcart Inc., Brandable Inc. and Rebelmail Inc., which sold to Salesforce.com Inc. in October. Hawke Ventures also recently funded Steereo Inc., a downtown-based technology startup that operates a music-sharing application for rideshare drivers and customers.
Huberman and Leahy sat down in Hawke’s West Los Angeles office to talk about why their unique approach is already paying dividends.
What are some of the synergies between having a media company and having an investment arm?
Erik Huberman: There’s kind of a double-positive where we can be a totally unfair advantage for our investments and give them an outsized chance of success because of the knowledge we have on growth marketing and our network, which most funds can’t do.
Where does Hawke Ventures fit into the funding equation?
Huberman: We’re not trying to cut out other funds. Let them cut the big checks. We’ll come in as a partner and be the one that’s actually strategic. When everybody’s arguing over trying to be the other check, we come with a differentiation that most others can’t.
Drew Leahy: Founders need to be focusing on big expectations, growth and sales, and we’re able to help founders refocus and take care of some of the core marketing services.
How did you decide to spin off a venture arm from your advertising company?
Huberman: Drew joined us a year ago. We were doing a decent amount of angel investments along with sweat equity — free work for equity. We were doing marketing and just taking the equity in a company. Drew said, “Objectively, we’re getting better returns on the checks you’re writing than the sweat equity, so we should just either stop or do way less sweat equity and look at doubling down on investing.”
When did you know you were on the right track?
Huberman: We invested in eight companies off the balance sheet. All had done well with investments between $10,000 and $100,000. (We thought) why don’t we scale it up to $250,000?
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