- Index Ventures is using TikTok to get in front of the next generation of startup founders.
- Two of the firm’s principals started the account after seeing a demand for entrepreneurship content.
- The firm’s viral account could signal the start of TikTok as a marketing strategy for VCs.
- See more stories on Insider’s business page.
Molly Alter, a principal at Index Ventures, is a Trader Joe’s loyalist. In lockdown, she would wheel a suitcase to a store in New York and fill it with cauliflower gnocchi and peanut butter-filled pretzels in order to cut down on trips.
Now, she’s working remotely out of Index’s offices in London, which is an ocean away from the nearest Trader Joe’s. She misses it dearly. But last week, Alter almost satisfied her craving when she posted a TikTok video on the “secrets of Trader Joe’s” to Index’s TikTok page. The video has been viewed nearly 370,000 times.
Alter is hoping that the video is seen by other Trader Joe’s “stans,” as she calls herself, but also future entrepreneurs.
Employees at Index Ventures are finding TikTok, an app for sharing short videos, is just another tool in the venture industry’s toolbox for meeting promising young people and, if all goes to plan, invest in their companies.
“If we’re focused on reaching and inspiring future founders wherever they are, you don’t really have to be a tech investor to know that they are on TikTok,” Alter said.
Startup founders have a choice of investors to raise money from, with so much private equity flooding the markets. It creates competition among venture capitalists, who are increasingly using social media, podcasts, and newsletters to promote their personal brands and win over founders. They are part-time influencers chasing buzzy startup deals.
Investors have been jockeying for Twitter followers and presence on other social media platforms for years. But they have only just arrived on TikTok.
Index Ventures is a venture firm with dual headquarters in San Francisco and London that invests in tech companies at all stages. It started posting on TikTok in the first week of April and has racked up more than six million views, Alter said. For a time, its profile on the app read: “the first VC firm on TikTok (we think).”
The firm’s videos are a mix of interviews and short profiles of entrepreneurs and businesses, like Alter’s homage to Trader Joe’s. One video tells the rags-to-riches tale of how a runaway teenager went on to start Hyundai, and in another, the story of the first Instagram post. Video subjects have featured Steve Jobs and Kellogg’s cereal.
Surprisingly, Index’s portfolio companies are barely featured, and its partners are also rarely seen.
The most-watched video to date with one million likes has Rex Woodbury, a principal at Index, explain Costco’s business model. Woodbury is a social media influencer in his own right, with 27,000 followers on TikTok.
For Woodbury, a light turned on when his video about Bumble boss Whitney Wolfe Herd went viral on his personal account.
“People love the (Bumble) app, but they had no idea the entrepreneurship-story behind it,” Woodbury told Insider on a Zoom call from Index’s San Francisco offices on one of his first days back. “That was a validation of our thesis.”
After the ah-ha moment, he and Alter started sketching ideas for videos.
The two have other responsibilities, so eventually they hired outside creators to make videos for the firm. But they still produce when the video’s subject “sparks joy” for them, Alter said, such as the video about Trader Joe’s fun facts.
They film mostly at night and on weekends, and they have a group-messaging chat with the firm’s marketing strategist where they share rough cuts of videos and help each other write captions before posting to the firm’s account.
TikTok could be a source of deal flow
Index is betting that by publishing on TikTok, the next generation of startup founders will see its content in their feeds. Half of Americans ages 18 to 29 say they use TikTok, according to surveys by the Pew Research Center.
So far, the firm hasn’t sourced any investments from a connection made on TikTok, but Alter said she’s hearing from Index partners that founders are saying they saw the firm on the “For You” page, which is TikTok’s home screen. The app’s algorithm surfaces videos that it thinks the user want to see, and being featured can often lead to a viral hit.
“I think that really demonstrated to our partners the power and the reach of this platform,” Alter said.
The early buzz, she said, should make it easier to recruit Index’s partners to participate in videos. But you won’t see partner Mark Goldberg doing the latest viral dance, or Sarah Cannon attempting the four-course meal challenge.
The firm is sticking to content that celebrates entrepreneurship. It also wants to educate people about the venture industry, with videos on what it’s like to work as an investor at Index and how to pitch a startup for funding.
“So much of venture is a black box,” Woodbury said.
The people who know how it works most likely already have ties to the ecosystem, he said. Index wants to reach people beyond the bubble.
“We do think that the 15-year-old or 17-year-old on TikTok today might be an entrepreneur in the future, and maybe our content can help inspire them by telling stories of entrepreneurship and helping them understand what a path to raising venture looks like,” Woodbury said.
Are you a venture-capital insider with insight to share? Contact Melia Russell via email at [email protected] or on Signal at (603) 913-3085. Open DMs on Twitter @meliarobin.
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