Rumor has it that if you whisper the mafia to a venture capitalist or tech reporter, an initial investment and a headline show up within minutes. This process quickly turns into seconds if the mafia reference includes the letters S, T, R, I, P, and E before it.
Tech mafias, otherwise known as a group of early hires within a company who go into setting up their own independent businesses, became a popularized term thanks to PayPal in the early 2000s. As my lede mentions, the term has since become something of a cliché. Everything is mafia, including you, dear subscribers to the Startups Weekly newsletter. Kidding aside, I would say the term is still a useful way to track how talent is evolving in the ever-growing world of startups.
Many venture capitalists have made subtle and not-so-subtle efforts to support the next cohort of star employees who become star entrepreneurs. Wave Capital originally started as an institutional venture capital fund specifically for Airbnb alumni starting new businesses. Ross Fubini of XYZ Ventures introduced Palantir’s first venture to its first engineer and is now investing in the community from his fund. Eric Tarczynski of Contrary Capital launched Contrary Talent, a program that helps early-career professionals navigate the world of entrepreneurship.
This newsletter was going to focus on the secret mafias brewing in technology, but a recent exchange with some of you on Twitter took me in a whole new direction. Check out the thread if you want to know about the next Mafioso, but today I want to explore a more modern way of thinking about these entities.
Glamourization of the Mafias
Rebekah Bastian, CEO and founder of OwnTrail, isn’t the biggest fan of the Mafias, although she’s technically a part of it herself. Zillow’s first founder was the former vice president of product and community and culture at Zillow, who believes the growing world of mafias comes with problematic truths.
“While it is true that these ‘mafias’ are good for the people who make them up and often praised with pride, there are reasons why they are problematic from an equity point of view,” she said. declared. First, she pointed out how hiring and funding employees of a given company, if that company does not have a diverse representation (especially at the management level), propagates the unfair cycles of which is hired and funded. Second, she thinks the press is focused on startups from those companies that serve a privileged subset of the population, instead of mission-oriented ones.
What do you think? His argument is basically not to glorify the concept of hiring within existing networks, because if white and male entrepreneurs only hire within their existing networks, the resulting business will look and act white and male. On the other hand, and this is what excites me, the underrepresented founders who raise millions of dollars suddenly have the power to usher an entirely different group of techies into this world. The Glossier mafia would be very different from the PayPal mafia.
As I said before, I think the “mafias” are certainly a compelling way to keep up with the development of talent. I don’t think we should stop paying attention to the phenomenon or shame people for being opportunistic about alumni groups. This is how the world works. Instead, I think there is hope that the issues inherent in them change as the founding groups themselves diversify. From Bastian’s perspective, I think there’s a way to be more intentional about what’s idolized and what isn’t.
A new descriptor
A few people also mentioned that we should start using a different word to describe this dynamic instead of “mafia” because of its more nefarious connotations. Here’s a list of your top suggestions:
Let me know what you think of any of the above by replying to @nmasc_. In the rest of this newsletter, we’ll cover BuzzFeed’s SPAC, the early stage venture capital market, and GM’s startup incubator strategy.
The public market is racing
We kicked off Equity Live this week with hot news: BuzzFeed goes public through a SPAC and will merge with 890 Fifth Avenue Partners Inc., a publicly traded company. BuzzFeed also announced that it would buy Complex, another media company, for $ 300 million in cash and stock in BuzzFeed itself; the PSPC agreement will help finance the purchase of Complex.
Here’s what you need to know: Alex has given you five takeaways from BuzzFeed’s SPAC platform so you can better understand what’s going on, beyond the cat pictures and fun quizzes.
As with other public market news, subscribe to The Exchange written by Alexis, which includes a handful of the following:
Late for the debut party?
No problem. Here’s what to put on your bingo board at an early stage: Emerging fund managers are emerging thanks to new capital backer, Li Jin of Atelier Ventures has a thread to read absolutely, and even though summer is in full swing, the offers are always frantic.
Here’s what else to know: Kirsten took Extra Crunch readers into GM’s startup incubator strategy, including how they take early concepts and turn them into startups and the company’s favorite ideas for the complicated stages.
Next week, we’re taking you to Pittsburgh to hear from Karin Tsai, the head of engineering, as well as Carnegie Mellon University President Farnam Jahanian, Mayor Bill Peduto, and a handful of local startups.
Our TC City Spotlight: Pittsburgh event takes place on June 29, so be sure to register here (free) to listen to these conversations, enjoy the pitch-off, and network with local talent.
All week long
Seen on TechCrunch
Seen on Extra Crunch
Thank you all,