Reid Hoffman invests $30 million in VC firm Sweat Equity Ventures - Business Insider

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A new VC firm doesn't give startups any funding because capital is 'commoditized.' Here's why Sweat Equity's founder says his work-for-equity model is a better deal for startups.

of dollars in funding without much to show for it, while investors are showing up unannounced in startup offices to try and get in on hot deals. Funding timelines are compressed, putting even more pressure on investors to figure out which deals have the most potential. The high-risk, high-reward venture model has gotten even riskier.and start Sweat Equity Ventures in 2018.

Portillo explained that Sweat Equity operates more like the startups it works alongside than a traditional VC fund.put up $30 million in funding for the firm. The funds are entirely dedicated to operations and hiring within the firm itself, Portillo said, instead of the more typical investing structure among VC limited partners.

"You get to know each other," Portillo said. "We help with key introductions and help with whatever they need at that stage of the company. We develop a statement of work, but of course that changes immediately after we start because that's just startups."

 

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