Killer Mike - D.F.A. #9
Killer Mike - D.F.A. #9
Plus: How To Get LPs From M&A Events and How Investment Firms Increase Their Number of LP Meetings
In this ninth newsletter:
An interview with Killer Mike (Run The Jewels, Outkast, Greenwood, Swag Shop)
How To Get LPs From M&A Events
How Investment Firms Increase Their Number of LP Meetings, Fast
There’s a short list of musicians that have absolutely changed the face of hip-hop in the last two decades, in terms of their political, social, cultural and economic impact. Killer Mike, and Run The Jewels, the duo composed of Killer Mike and producer El-P, are definitely on that short list. I was introduced to them by my brother-in-law Jake Cline about ten years ago, and became an immediate fan. A tireless advocate for Black economic empowerment, Killer Mike recently appeared on the cover of SPIN Magazine a few weeks ago. My main reason for seeking him out for this investing newsletter is because he raised $40M in series A funding for his Greenwood banking platform in 2021.
This interview is brought to you in partnership with the music app Let’sGlo. Below this article look for a special link to give you exclusive access to the app.
Dr. Martin Luther King Jr., in the last years of his life, turned his focus towards economic equality, under the banner of the "Poor People's Campaign." As someone who's known for his activism and community engagement, can you share if this mission has influenced your journey into the world of investing? How does your investment philosophy align with the pursuit of economic equality?
Dr. King came from a middle class Black family in Atlanta, Georgia, and he got to see segregation and bad business policy deny opportunity to African Americans. Operation Bread Basket was about making economic wrongs right - Dr. King championed Operation Breadbasket, which leveraged Black spending power for economic equality.
I also believe that there must be an economic component to making opportunities fair for Black Americans.Among all the investments you've made, are there any that you're particularly proud of? If so, could you tell us why they stand out to you?
The Swag Shop holds a special place in my heart. I've always believed that the Black barbershop is one of the coolest places on earth. It's a space that goes beyond just getting a haircut—it's a hub of socialization, culture, and coolness that you won't find anywhere else. It bridges gaps, fostering connections across different cultures and backgrounds.
Within the walls of the Swag Shop, it has evolved into an environment where conversations about dreams, goals, and aspirations seamlessly blend with the art of haircuts and styling. It provides a safe and empowering space for young individuals to open up about their ambitions, find inspiration, and receive the support necessary to pursue their aspirations. Our goal is to create an atmosphere where they feel empowered to achieve their full potential.
The Swag Shop has established strong partnerships with notable organizations such as the Next Level Boys Academy and the Georgia Building Trades Academy. Through these collaborations, we extend our reach and impact beyond the physical boundaries of the shop. By aligning with these programs, we actively engage with young individuals, offering opportunities for personal and professional development.
Recently, we had the joy of witnessing several young men graduating from the Georgia Building Trades Academy's YouthBuild program.This program is dedicated to equipping young individuals, especially those from disadvantaged backgrounds, with the skills and knowledge needed to thrive in the construction industry. They were in need of decent haircuts for their graduation, and I made the decision to close the shop for a few hours to ensure they could get the best cuts for their special day. It was a small gesture, but it meant the world to those young men. It exemplified the commitment of the Swag Shop to support and uplift the youth in our community.
By supporting the Georgia Building Trades Academy, we're investing in the education and training of young people. We're breaking down barriers and opening doors to new opportunities. The program not only focuses on technical skills but also provides support for personal growth, leadership development, and community engagement.
So, while the Georgia Building Trades Academy represents a long-term investment in transforming lives and communities, the Swag Shop complements that by providing a nurturing and supportive space for young people. It's a place where recruitment happens, connections are made, and support is extended beyond the barbershop chair.
These investments, both the Swag Shop and the Georgia Building Trades Academy, are testaments to my dedication to uplifting and empowering young individuals. They embody my dedication to creating change, one cut and one opportunity at a time. Together, they play a vital role in making sure we're moving in the right direction, leaving a positive impact on the lives of our people. It's all about building something greater than ourselves and creating a better tomorrow for everyone.
My introduction to your work came 10 years ago, when my brother in law Jake turned me on to the first RTJ album. As a successful musician, you've had a rich array of experiences that most investors don't typically have. How have these experiences influenced your approach to investing?
I only do things I believe in. I believe in the music I make, and I believe in companies like Greenwood and Swagshop that I invest in.If a young hip-hop artist, even one who had limited experience or success came up to you and said “I want to become an investor,” what would you say to them?
When you get your first $100k advance, put yourself on a $2k / mo budget and put that to the side. Take the other $52k, and put about $32k in an investment account. Take the other $20k and have fun.
Finally, you wear many hats - as a musician, an activist, and an investor. How do you balance these different roles? Do you find that they intersect or influence one another in any way?
As an artist, activist, and investor, I wear many hats. It doesn't stop at music. I build business relationships that align with my values and principles. In fact, I married someone with a much better business mind than me, and together we invest our resources in things we truly believe in. It's not just about talking the talk; it's about taking action and making a real impact.
I'm incredibly passionate about the Georgia Building Trades Academy's YouthBuild program, and I fully support it. It's a powerful tool for change tearing down the barriers that young people of color face when trying to access opportunities in the construction industry. Particularly those from disadvantaged backgrounds, who may have faced barriers in accessing education and employment.
Beyond technical training, YouthBuild incorporates crucial components such as leadership development, life skills coaching, and support for personal growth. The program recognizes that addressing the challenges faced by young people requires a holistic approach, nurturing their confidence, resilience, and ability to make positive choices
But it doesn't stop there. When we invest in these young individuals through the Georgia Building Trades Academy, we're investing in the entire community. By creating skilled workers who can earn decent wages, we're injecting much-needed funds back into the neighborhoods that need it the most. We're not just talking about short-term fixes; we're building a solid foundation for lasting change.
When my Swag Shop faced vandalism and needed repair, the participants of the Academy stepped up. They didn't hesitate to lend a hand and offer their skills to fix the damage. Their dedication and unwavering support for the community embody the values and spirit of Dr. King. It's truly inspiring to witness firsthand the impact of the Academy in instilling responsibility and unity among these young individuals, creating a network of support and empowerment.
When these young people go on to become skilled tradespeople, they're not just transforming their own lives. They're also setting the stage for future generations. They're breaking the chains of poverty and leaving behind a legacy of empowerment that will reverberate for years to come. The Georgia Building Trades Academy is a catalyst for this change, equipping these young individuals with the skills and opportunities they need to create a better future.
We thought that Georgia Building Trades Academy's YouthBuild program was a very important organization, so D.F.A. Capital has chosen to make a donation, and we’d like to ask that you take a moment to consider also making a donation as well. To make a tax-deductible donation, please Click Here.
What We’re Listening To All Day? Let’sGlo
If you’re a music nut like me, you should know about Let’sGlo. It’s the future of music listening. Built on the belief that algorithms will never curate better than friends, Let’sGlo is a social experience for music lovers, with fun exclusives like listening parties, live games, and interactive radio. The thing that I like most is that on Let’sGlo you can only communicate through music. There’s no trolling, bickering, bullying or harassment allowed.
In the lonely digital age, Let’sGlo reminds me that music is a safe and fun way to make friends online. Let’sGlo was founded by musician and repeat fintech founder Matt Bradley. Stay tuned for more on their long game to disrupt entertainment with fair artist pay.
Let’sGlo is in private beta, but if you’d like to check it out DFA subscribers can get exclusive access by clicking here.
How To Get LPs From The M&A Events Goldmine
Welcome to the secret hideout of M&A (Mergers and Acquisitions) records. These files, often overlooked, are bursting with rich information. We're about to expose how these records can be wielded to identify potential Limited Partners (LPs) for your venture capital (VC) fund. Stay tuned.
Real-World VC Firm Case Studies
Let's kick things off with a case study the venture capital giant Sequoia Capital. They effectively tapped into M&A records when PayPal acquired Braintree in 2013. With Braintree's founder Bryan Johnson exiting with considerable wealth, Sequoia saw an opportunity. Johnson became an LP in their fund, offering not just capital but valuable insights from his own entrepreneurial journey.
Next, we turn to Greylock Partners. They sourced Tony Bates, a new LP, from Microsoft's acquisition of Skype in 2011. Bates' experience in the tech industry, coupled with his newfound wealth, made him an ideal addition to their LP roster.
Bessemer Venture Partners took a similar approach. After IBM acquired Red Hat in 2019, Red Hat's founder, Bob Young, walked away significantly richer. Bessemer approached Young, leading to him becoming an LP, contributing both his wealth and unique expertise. (We'll go a lot deeper into the Red Hat story in an upcoming newsletter in just a few weeks, because well be interviewing a CEO that competed directly with Red Hat).
In a similar vein, Accel Partners tapped into M&A records when Facebook acquired WhatsApp. Jan Koum, co-founder of WhatsApp, became part of Facebook's leadership and significantly wealthier after the deal. Accel didn't miss a beat in bringing Koum onboard as an LP.
Lastly, we have Founders Fund. When Microsoft acquired LinkedIn, Reid Hoffman, the co-founder of LinkedIn, became a prime target for LP sourcing. Today, Hoffman is one of Founders Fund's LPs, providing financial support and industry insight to the firm.
These case studies show that M&A records are not just about corporate reshuffling. They are a veritable goldmine for sourcing new LPs. Let's continue to uncover this underexploited wealth of information.
Understanding M&A Records
When we talk about M&A records, we are referring to a goldmine of information about the buying, selling, dividing, and combining of different companies. These records contain rich data points that include, but are not limited to, the deal's financials, the entities involved, their sectors, geographic location, transaction dates, and deal structure. There is also often a wealth of data about key individuals, such as company directors and shareholders.
The significance of these records is that they shed light on companies' financial health, their valuation, and market trends. But here's the clincher: they also unveil wealthy entities that have profited from these deals.
This is a pretty long post from the Lead Zeppelin blog. To read the rest of it, click here.
(If you're needing help doing this type of research and finding investors, feel free to reach out to the team at Lead Zeppelin here).
How Investment Firms Increase Their Number of LP Meetings, Fast
One thing that our team realized when we were raising our fund at D.F.A. Capital, was that many VC, private equity and real estate funds had trouble finding LPs and trouble finding them quickly. We met with dozens of investment firms and found out that this was because they enjoyed meeting with LPs but strongly disliked doing cold calls. That’s why we invented Lead Zeppelin, an AI-driven lead-gen and demand-gen firm for investment firms. (We also work with profitable firms of 200-5000 employees).
Here’s 3 easy steps your firm can take to rapidly increase the amount of LP meetings you’re having.
Set up very basic AI workflows for all prospecting. If your investment firm does not already have AI workflows set up for LP prospecting in all channels (social media channels, various LP development channels like trusts/endowments, family offices, etc.) then your team is performing manual work that can be done via AI. Here’s a good blog post on how to get 1000 leads in 10 seconds using AI.
Read about how other companies are using AI for demand and lead generation. Here’s a whitepaper that gives about 30 examples of how it’s being done. Before you do it yourself, you’ll want to know what other companies are doing and what’s working.
If you need to see how other investment firms are doing it, feel free to book an intake call with the LZ team. You can book a call here. Pricing is here.
