A peek into the operational side of an innovative fund: M13’s full-service venture engine

A peek into the operational side of an innovative fund: M13’s full-service venture engine

Author: Angeline Char
Read time:  4 minutes
Published date:  4 March 2020
We sat down with Brian Carroll, Partner at M13, to learn more about the fund's community, corporate partnerships, and their star-studded roster of LPs.

M13 is an LA-headquartered venture engine that has over $280M under management. Their name stems from Messier 13-a cluster of stars that shine brighter together, representing the firm’s ethos of bringing founders, investors, and partnerships together in order to succeed. They believe founding teams deserve an investor who propels them on their mission of transforming an idea into a successful company, which is why M13 calls itself a venture engine, providing the right people, platform and partnerships to build high-velocity businesses.

We sat down with Brian Carroll, Partner at M13, to learn more about the fund’s community, corporate partnerships, and their star-studded roster of LPs.

A peek into the operational side of an innovative fund: M13's full-service venture engine

Download the Case Study

How is M13 positioned to help your portfolio companies in a unique way?

Startups get a powerful playbook through M13 starting with access to our Propulsion team, an in-house team of operators and experts across six key business areas from brand to operations to talent. We think our particular alchemy of a robust platform, broad base of LPs, and an active and supportive community is a unique way to help startups and provide repeatable learnings across the portfolio. 

We’ve built a venture model in a different way by constructing a sort of constellation of hundreds of LPs who are all very powerful and influential people-from Sir Richard Branson to Arianna Huffington. Our portfolio companies are excited because they’re plugged into M13’s robust ecosystem.

A peek into the operational side of an innovative fund: M13's full-service venture engine

Tell us about your corporate partnership with P&G Ventures.

Launchpad is M13’s in-house venture studio that develops the right founding teams, products, and practices to launch an idea from inception. M13 partnered with P&G Ventures on its first and second incubation cycles, centered in skincare and wellness. P&G Ventures was the perfect mega-consumer partner to bring a physical product solution to life, and had been working on the products for years. P&G Ventures vetted multiple qualified partners but M13 stood out given our robust track record of building successful businesses.

What does a good fund admin provider do to help VCs like M13?

A good fund admin helps you look good to your LPs. That’s number one. They keep the ship running smoothly. No problems pop up-LP’s questions get answered, documents get distributed, and audits get done on time.

They also give you capacity for special projects like SPVs or IPOs that you might not otherwise have.

How does M13 approach using special purpose vehicles (SPVs)?

We have a lot of family offices who want miscellaneous exposure to the venture system, but there are opportunities that arise that are outside the mandate of our fund. For instance, we recently created an SPV for one of our later stage companies because we knew a lot of our LPs were excited to have that opportunity. These SPVs are an important part of our strategy.

How does Carta enable M13 to execute on your strategy?

Carta provides a combination of software, systems, people and process that enables us to have a certain strategy with our LPs that wouldn’t be possible otherwise.

We’re able to take smaller checks from more people and still maintain that relationship. M13 is a constellation of stars that burn brighter together. That strategy needs software to enable it because we couldn’t just manually keep in contact with all these people. It’s important for us to have that CRM system and a communication portal with our LPs.

Lighting Round:

What’s a problem that you think about a lot these days?

There are seven billion people in the world, about a billion of them have air conditioning and dishwashers and such. Then the other six billion do not but they are rapidly entering the middle-class. Just in Asia, 500 million people will be entering the middle-class in the next 20 years because there are a lot of factors eliminating poverty. For instance, there are now 3.5 billion smart-phones out there, and so that enabling technology is going to rapidly transform poverty. The question is, who’s going to be working with all those people as they’re rising? I think we’re getting a little bit away from the sort of early phase invention of technology and more into the distribution phase of technology, where we take a lot of the things that we, in the rich world, have had and get them out into the rest of the world. 

A peek into the operational side of an innovative fund: M13's full-service venture engine

If you weren’t an investor or an operator startup, what would you be doing?

Cookstoves in Africa. If you look at how many people get killed from indoor air pollution or fires or whatnot, cookstoves are one of the major threats to humanity right now. 

The other thing is accounting systems. There’s nothing that pulls people out of poverty like entrepreneurship, and there’s nothing entrepreneurs need more than proper accounting to help them understand whether they’re creating or destroying value in any given month. Pushing on that accounting layer of entrepreneurship, I think is a key driver.

You studied politics, philosophy, and economics at Claremont McKenna College, how did this course of study influence your work in VC?

Just broad thinking. It’s important to survey the landscape of a variety of problems and think critically about what’s necessary. My studies encouraged a creator mindset. You’re not memorizing knowledge, you’re creating knowledge and we’re not just allocating value, we’re expanding the pie. How do you take something from zero to one? You can’t have a zero sum kind of a framework for the world when you’re a VC, at all.

If you could meet anyone alive, who would it be and why?

Bill Gates. He has succeeded in the tech world and transitioned to very global problems. It would be fun to chat with him to see where he thinks the levers that move the world are these days.

What’s a recent book you’ve read that you recommend?

Factfulness by Hans Rosling.

DISCLOSURE: This communication is on behalf of Carta Investor Services, Inc. (“Carta”), an affiliate of eShares Inc., d/b/a Carta, Inc. This communication is not to be construed as legal, financial, accounting or tax advice and is for informational purposes only. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein.

Angeline Char is a former product marketing manager at Carta. Prior to Carta, she worked in tech for over 10 years in product and customer marketing.