Ben Ling, a prolific angel investor turned venture capitalist, never gave much importance to the need for a new decentralized Internet. That’s why the company he founded almost exactly four years ago – naming it bling capital (a nickname from a long time ago) – does not have the kind of bets that are currently becoming a black eye for many other corporate outfits.
It may also be why Ling – whose longtime friend and co-investor Kyle Lui joined Bling Capital eight months ago from cross-border firm DCM – apparently had no trouble closing 212. million on two new venture capital funds: a $109 million seed-stage vehicle, and a $103 million opportunity-type fund that the two will use primarily to invest in their breakout portfolio companies .
Of course, betting on companies like Rippling, a six-year-old software platform now valued at $11.25 billionand Airtable, the cloud collaboration service which is also valued at around $11 billiondidn’t hurt either, presumably.
We spoke with the duo yesterday to learn more about their mission to support startups focused on fintech, digital health, B2B SaaS and, more rarely, the consumer internet. Our chat, below, has been edited for length and clarity.
TC: Well, Kyle is based in San Francisco, but you moved to Miami a few years ago where FTX had a notable presence. Do you see the effects of the FTX implosion? Has the mood changed?
BL: I am not qualified to answer this question because I was absent [of town] Last week. But what is really interesting is that during my stay in Miami and meeting many entrepreneurs and investors, FTX never came up. For me, the circles I ran in, probably one in 10 was a crypto investor and the other nine were VCs or traditional entrepreneurs. Our company hasn’t invested in crypto, it’s not an area of focus for us, that’s also why we don’t spend a lot of time with a lot of crypto funds and VCs.
Why did you decide to avoid crypto?
BL: We have never focused on crypto since the start of Bling Capital. Even when I was at Khosla Ventures [where Ling logged close to six years before hanging out his own shingle]we avoided crypto.
In general, I feel like all currencies will have value if people agree there is value. Just like art, just like gold, when people agree on something as a store of value, it becomes [valuable] because there is a common belief system. For many apps, we struggled to really understand why they were really better than existing incumbents and why they would take over. Why were they going to be 10 times better, 10 times faster, 10 times cheaper? We just had standard adoption questions.
We never really focused on that, so we felt that others were more experienced in space and much more advanced and that we had no comparative advantage.
Don’t think blockchains could improve current SaaS offerings?
BL: SaaS B2B is an area of incredible interest. There’s a lot of verticalized software that I think will make major inroads because there’s a lot of standard Salesforce-like SaaS and there’s consumer-like SaaS that’s grown, and now the SaaS market movement really making its way into B2B, too. And I think most, if not all, of these problems can be solved by traditional Web 2 technologies. We wonder if you need web3 technologies to succeed in B2B SaaS.
Our investment philosophy is that we must either have a network advantage or an expertise advantage over other investors in order to invest in something. Otherwise, we are not qualified to [make a particular bet].
When you say network advantage, do you mean your LP base? I know the first two Bling Capital funds had something like 100 sponsors. You also have, in a related way, what you call a product council. Are these people one and the same person?
KL: Yeah, I mean, [our] the members of the Product Council are people who tend to be product managers, engineering heads, go-to-market heads at various cutting-edge technology companies and it’s important for us to keep adding them because they are not only our biggest source of deal flow, but are also very active in advising our startups.
And they are also LPs? Do they have a stake in your funds to incentivize them to help your portfolio companies?
BL: All the members of the Product Council are LPs in the fund, so when the fund is invested in a company, all of them are also invested in the company. But 80% of the fund is now made up of institutional investors.
Clearly, the market has slowed down, even for early-stage startups. What do you see in terms of the time it now takes to complete a transaction?
KL: I would say on the front of the new deal, on the pre-seed and seed side, we’re seeing delays that were one to two weeks now [extending into] more like two to four weeks, which is really healthy because it allows for more proper diligence.
We are able to close deals within days if we have strong conviction, but we like the market to be a little healthier.
Another dynamic we’re seeing is that entrepreneurs are really starting to open up to this new world, and that wasn’t the case even six months ago. At the time, we saw growth deals come to a halt, but that didn’t really impact how new founders in particular thought about their valuations. Now we also see them coming. So [collectively] we actually see a lot of really great offers.
In terms of returns, I know Bling Capital is too young to have any real exits yet, but I guess Rippling alone got your investors excited. Because I know you are targeting a 10% to 12% stake in your portfolio companies, may I ask you: do you have a stake close to that size in Rippling?
BL: We invested from our opportunities fund in the last cycle [of Rippling]. But I also happen to be a personal investor in Rippling. I was at Khosla Ventures at the time and Bling Capital didn’t exist yet, but [Rippling founder Parker Conrad] invited all original Zenefits investors who backed it to reinvest, and I personally invested during this round.
KL: This is one of Ben’s biggest personal checks.
Has Khosla Ventures also invested?
BL: I don’t think so.