Why This Venture Capitalist Uses Instagram To Source New Business

Why This Venture Capitalist Uses Instagram To Source New Business

Social work.

I moved to Los Angeles in October 2009. It was a simpler time, one when people occasionally uploaded new pictures to social media. But Instagram launched the following year and changed everything. Still, despite managing a consumer-technology investment fund with actor Ashton Kutcher (the first person to reach 1M followers on Twitter), I never once considered joining any of the popular social media platforms.

My hesitation came partly from pride but mostly from ignorance. I had dismissed Instagram as nothing more than an outlet for narcissism. But, by October 2011, barely more than a year after its launch, Instagram had roughly 10M registered users and could no longer be ignored. Still, I maintained my distance even though the sheer volume of users forced me to question myself. Certainly not all of these people gravitated toward Instagram only for vapid self-promotion.

During Instagram’s meteoric rise, I was working alongside legendary investor Ron Burkle. My job was to handle Ron’s personal venture investments, travel with him (a full-time responsibility in its own right) and run A-Grade Investments. A-Grade was the venture capital fund Ron started with Ashton and top Hollywood talent manager Guy Oseary. Together, we invested in more than 100 startups, including Uber, Airbnb, Pinterest, and Spotify.

As my purview expanded, the experiences, luxuries, and opportunities becoming my norm felt anything but normal. I chronicled my personal and professional journey in hundreds of photos. However, I also placed a premium on privacy and took pride in my discretion. Working alongside people whose lives did not always afford complete privacy, I considered publicly sharing any of my pictures a violation of their trust. Additionally, I avoided Instagram largely out of concern that the app would prove a professional liability.

I couldn’t have been more wrong.

Fast-forward to today, and I readily admit that Instagram has transformed my career as a venture capitalist, ranging from the way I source investment opportunities to how I perform due diligence on them. Instagram has not only become an integral part of my daily life, but it’s allowed a total restructuring of my career better suited to and more fulfilling of my personal goals and priorities. What I had once dismissed as a handicap has since proved an invaluable asset.

My true journey with Instagram began in 2017. (I downloaded the app in 2014, but had only posted a handful of photos and rarely even opened the app.) At the end of 2017, I left my job in order to simplify my life and focus on my own angel investments. Instead of using the permanent Instagram feed, carefully curating photos to portray an intentionally skewed version of my life, I baby stepped into Instagram with the “story” feature, which disappears after 24 hours. For me, the story function removed the intimidating permanency of the platform and allowed more playfulness. It felt more spontaneous and sincere, and I actually began to enjoy the creative process.

At a time when nearly every company—from your local car wash to the Wall Street Journal—has an Instagram page, half of the venture capitalist’s work is done for them. It’s a simple and obvious realization, but one that fundamentally shifted my approach to the app. My girlfriend, Bianca Vierra, was an early adopter of Instagram, previously worked for a digital agency, and was managing her own account as a model in L.A. with almost 40k followers. She helped me pinpoint what kinds of accounts were appealing to me so that I could focus my time on the platform following intriguing brands, not celebrities or public figures.

As opposed to flipping through a 20+ slide-investor deck, I scan a company’s Instagram profile and obtain a cursory understanding of aesthetic, branding, messaging, connectivity, and products within just a few seconds.

I sought out accounts focused on carefully curated, inspirational, culturally relevant, health and wellness content, and in doing so, I built connections with some of my favorite companies and products. I found myself drawn to brands that were presenting a comprehensive lifestyle as opposed to simply focusing on their products. The content had to be both authentic and aesthetically pleasing, and most importantly, it had to tell a story. The first two accounts that I fell in love with were Recess (a CBD beverage) and JuneShine (a hard kombucha), and I ultimately invested in both companies. I now use these brands as aspirational Instagram templates and regularly reference them during conversations with new entrepreneurs. My approach also serves as a fairly effective way to track new trends, because I’m able to instantly evaluate a quantifiable reaction by the community, based on metrics such as likes, comments, mutual followers, and reposts, which is an invaluable bonus in the business of investing in highly risky, innovative startups.

Photo courtesy of Jonathan C. Ward

I began posting photos of my favorite brands, ranging from food and beverages to alcohol and CBD, simply to share with my friends and followers the companies and products I enjoy. I tried to keep the content simple and authentic, so I used my iPhone for every photo and tried not to overthink things like lighting or layout. By consistently posting and tagging brands, I started to increasingly gain more followers. It soon became a virtuous cycle. In other words, every time I posted one brand, another would reach out wanting to send me samples. I started receiving packages on my front porch almost every single day, some from prelaunch startups and others from more established companies. Given the shortened, informal nature of Instagram conversations coupled with fast shipping options, it became a fun and easy way to sample new products on an almost real-time basis.

One or two story posts per day quickly grew to several. Soon, I began posting photos with founders so my followers could see the types of companies and people I was meeting. In posting more “business content,” I became increasingly comfortable posting personal content, such as photos with Bianca, hikes with my dog, favorite meals and wines, and various trips. As I now invest my own money and take meetings from my house, the business and personal content naturally overlap.

Once I honed my personal voice on Instagram and curated my professional dealings, I developed what I refer to as the “Instagram test.” In fact, it’s the very first step in my diligence process and allows me to glean so much about a brand in less than a minute. As opposed to flipping through a 20+ slide-investor deck, I scan a company’s Instagram profile and obtain a cursory understanding of aesthetic, branding, messaging, connectivity, and products within just a few seconds.

In addition to streamlining my diligence process, Instagram has become my top deal-sourcing tool. Before Instagram, Ashton and I would fly to San Francisco, attend demo days and conferences, and pack in as many meetings as possible. All the while, I would be chained to my in-box, replying to every potential deal-lead email. Now, without leaving my couch or checking a single email, I flip through a never-ending stream of new startups on my phone by leveraging my discovery page, keyword searches, and people who forward me new profile pages that I do not already follow. When one catches my eye, I send a thoughtful direct message to engage dialogue. No emails or middlemen required. I am able to go straight to the source.

I have become so comfortable with Instagram, I actually sourced my last three deals on the app. I arranged my initial meeting with the founders via direct message and eliminated the friction that often accompanies the use of middlemen. After quitting my job in late 2017 to pursue a simplified life and career, no one is more surprised than I am that Instagram has been the vehicle to accomplish this personal goal.

One of the first companies that caught my eye on Instagram was MUD\WTR, a leading coffee alternative. When Bianca messaged me the profile, I was immediately struck by the gorgeous content and impeccable branding/messaging. Again, this entire experience took mere seconds (a truly baffling efficiency when compared to the old way of doing things). Our mutual followers highlighted our connectivity and provided the obvious options for a warm intro, and Los Angeles–based entrepreneur Terry Lee facilitated a meeting between me and MUD\WTR cofounders Shane Heath and Paul DeJoe. A few days after Bianca sent me the company’s profile, I was in their office to personally invest in MUD\WTR’s seed round at the exact moment the company collected its thousandth subscriber.

As the company continued to grow, while at a catch-up meeting at my house, I tagged Shane and Paul in a story post that also included, “These guys are raising a new round!” My in-box immediately blew up with requests for introductions. Mission accomplished. That one story post allowed for several introductions to reputable investors, one of whom put $500k into the company’s Series A round. My MUD\WTR experience illustrates how Instagram allows an investor to participate in every step of a young venture’s journey. It’s become my own personal case study as I continue to push the limits of my business dealings on the app.

I’ve learned a great deal as I continue integrating social media into my work life. I’m still learning. Not long ago I was an introvert who categorically avoided social media at all costs. Now I’m an introvert utilizing Instagram to provide myself the most personally and professionally fulfilling life I can. I’m still on the other social platforms, like Facebook, Twitter, and LinkedIn, but Instagram has become my “hub” for all activity while the other platforms are simply “spokes” now. I always start with Instagram and then can easily disseminate info through other platforms if I want to amplify my voice. Facebook is for birthdays, Twitter is for news, and LinkedIn is for boring work stuff. But I think Instagram transcends all use cases and is now the most compelling and comprehensive social media platform by an order of magnitude. Overall, it might have taken me longer than most to find my social media voice, but at least I found the one most aligned with my values.