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In the tech world, no one gets a bad rap like the venture capitalist. Often derided as opportunists and gold diggers who take advantage of passionate and eager startups with unfavorable valuations, some entrepreneurs see VCs as a necessary evil to scale their disruptive idea to a national or global stage. Yet, sometimes these VCs are the greatest allies and closest advisors to the founders. They are often the unsung heroes who have fueled and guided the innovation we adore, and eventually take for granted. But still, nowadays with the cost of starting and operating a company dropping precipitously, where do Venture Capitalists fit in, if at all? How can they bring value to an up-and-coming business? As every aspect of our lives and how we do business changes due to technology and the Internet, so must the financing of the very companies who are causing the disruption.
In the coming months, we will visit and profile disruptive VCs and angel investors the likes of Paul Graham, Dave McClure, Mark Suster, Christine Herron, Tim Chang, Raj Capoor, Angel List founder Naval Ravikant, and more for A TOTAL DISRUPTION series called “VC Visionaries.” We will look at what drives them from an anthropological perspective, just as we have studied the DNA of the entrepreneur, and discover brilliant companies in their portfolios – while getting kickass advice. We’ll explore how they are challenging the typical financing structures that have ruled Silicon Valley for decades.
This week’s episode focuses our lens on Andrew Chung of Khosla Ventures, both an artist and entrepreneur, who breaks the mold of the stereotypical shark investor while financing groundbreaking technology that affects how we re-charge: intellectually, monetarily and literally (how we will power our lives.)
What marks a wise VC in the tech world is someone who knows and understands the challenges of the entrepreneur from the inside out. Andrew Chung began his entrepreneurial education at five years old working in his family’s Chinese restaurant, where he learned the values of hard work, customer service, and perseverance. Not only did he get ground-level experience in a small business, but one customer, a local scientist from Princeton University, saw the boy’s potential and visited every weekend to teach Andrew advanced math and physics. He mastered Geometry at age 6, Calculus at 10, and Relativity by 12. It wasn’t long before Harvard came calling.
By 19, Chung had started his own company and built some of the first Flash-based websites for local business around campus. Not longer after, he co-founded a startup called Uberworks, an e-commerce platform and successfully steered it to a successful acquisition by a public company. Soon, Chung was drawn into the world of investing through stints at Bain Capital and worked in the arenas of energy, healthcare, and software.
During this time, his commitment to a career in business was challenged by the other great love of his life: Music. A talented vocalist, Chung won Chinese-American Idol and was a finalist in Hong Kong’s version of American Idol, upon which he was offered a major record deal. Flipping the familiar narrative, he chose entrepreneurship over art, because he loved it so much and thought he could make a bigger difference in the world.
Now a partner at Khosla Ventures, Chung’s goal is to disrupt traditional industries, revolutionize humanity and in his words “invent the future”. To do this, Chung has access to a $350 million dollar seed fund to allow new companies and scientists to explore and experiment and help them grow their reach. Then, he has access to a main fund of 1 billion dollars to help those companies scale to full maturity. Khosla Ventures was an early investor in Jack Dorsey’s Square, which developed a way for mobile devices to accept payments, allowing anyone to operate as a small business and challenging the chokehold of the old guard. Another democratizing platform Chung is fueling into existence is Wattpad, a social reading platform which allows writers to upload their work and get real time feedback, outside the norm of existing publishing outlets. Wattpad is like Youtube, but with user-generated writing – and already has millions of users, where teenager writers are experiencing fan bases the size of multiple NY Times best-sellers. Chung sees this as the first step to toppling the publishing industry.
There’s one early investment of Chung’s that I’m most excited about, probably because of my background in studying innovative solutions to climate change for my feature film COOL IT – his massive contribution to the development of the liquid battery, a potential game-changer in the fight to preserve life in the face of global warming. The genius of their technology is that it stores and deploys renewable energy sources like wind and solar generated electricity across the grid as needed. That power outage in the South Bay that knocked out electricity in over 115,000 homes earlier this week (which has happened 100 times over the last five years) or the extended blackout after Hurricane Sandy in New York City could be a thing of the past if AMBRI’s liquid battery became part of our nation’s energy plan. This is a global crisis on the horizon which can only be prevented by the R&D support VCs like Chung are providing. Six hundred and twenty million people in India were affected by one of the biggest black outs in July 2012. Instead of building more power plants to keep up with worldwide consumption and the increasing costs of updating aging infrastructure, the liquid battery can make a massive contribution towards creating a cleaner and more sustainable future.