Soma Capital?
Currently going through the recruiting process with my friends from other consulting firms. Anyone have any idea of the team? Quick read seems like a throw spaghetti on the wall and sees what sticks approach.
Been speaking with them since December through a recruiter for investor role, but seems like process is slow and unorganized.
Doesn't seem like they are taken seriously or respected in the industry. Brand matters a lot in VC, so I would recommend doing some research on how they are perceived.
Founder is the son of Sacramento Kings I believe. Not sure they have the greatest rep in the Industry.
They’ve had a “chief of staff” role open for over a year. Heard the founder / partner Aneel can be a hardo and difficult to work with.
My friend who works at VC basically told me they are a complete joke and its just another rich kid playing at investing with daddy's money. Nothing necessarily wrong with that except he apparently isnt much good at it and doesn't take investing that serisouly which is bad combo for someone who is looking to actually build a career in the space. Would avoid.
I am quite familiar with Soma Capital. Met Aneel once a long time ago, but my most up-to-date intel is mainly through several startup founders I am friends with that have received investment from Soma. Aneel is not so much a hardo as he is a spoiled, entitled brat who would be nothing if it were not for his father. A startup founder friend had a Zoom call with Aneel when he was fundraising and, kid you not, the first words out of Aneel's mouth (word-for-word) was: "My dad founded a multi-billion dollar company, so I can get you connected to anyone in the world."
The fund's approach is very much "spray and pray" as they make many small investments in mostly Y Combinator startups. In fact, I think they might be the all-time leader for investing in YC startups with over 600 investments? (which would be about 13% of ALL companies that have been funded by YC)
"Founder-friendly" is very much the way of VC / early stage investing nowadays, but Soma takes this to an extreme by committing to invest after just one call and wiring funds to the company on the same day or next day. In other words, they barely do any (or zero) due diligence on the investments they make.
I suppose part of the reason they are lax about due diligence is their primary decision-making criterion is who else is investing in the current round ("Cool company, dude! Ah, yea, so like who else is investing?") If another reputable investor has already invested, they are "in" before you can even finish your sentence. If not, they will drag out the process with some perfunctory due diligence (mainly waiting to see if any Tier-1 investors commit) and will invest if a reputable investor comes through or pass. In other words, very low conviction investors that lack independent thinking and are mainly driven by FOMO.
Typical investment is low six-figures and they are obviously not very disciplined about price (or you can call them "valuation-insensitive" if you wish to be charitable) since they invest almost exclusively in Y Combinator startups, so they would be lucky to get even 1% ownership given how inflated those valuations are.
I’m seen them hint at some impressive returns (suggesting some funds are on pace to 6-7x net), and being in a number of companies starting from pre-seed (e.g. Ramp, Deel, Cognition, Rippling, Mercor). So it does seem like this spray and pray, tag-along-leading-VCs approach seems to work (provided the companies get really sizable in the $10s and $100s of billions, or if they manage to do pro rata or more on the ones that get to low $1 B’s…). And maybe this is also just a function of this current, ridiculous environment.
But I’m wondering how exactly they are getting the opportunity to spray and pray into some of these names… Is it mainly a function of Aneel’s father / family network? Or some other value add?
I would think it can’t just be being able to invest in a bunch of YC firms, cause wouldn’t some of these positions be taken up by more “respected” or high conviction early pre-seed investors?
It's 100% Aneel's dad. He has quite litearlly 0 experience that's relevant to these founders. His only value add is money + dad's rolodex (who is connected to many of the funds he follows as an LP/friend of LPs) - granted that last part is lights out more valuable than what 90%+ of VCs bring to the table. That + tagging along on the heels of top-tier early-stage funds who actually do the heavy lifting is undoubtedly a winning combination.
Is it a red flag to work at Soma Capital?
It is a red flag to read all of the above and not be able to answer your own question
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