TCT Exclusive: Jonathan Abrams, Founder of Friendster, Nuzzel, and now GP at 8-Bit Capital
Here at The Cap Table, our mission is to help you get (and stay) on the capitalization table
We’re thrilled to announce this week’s exclusive with Jonathan Abrams, Serial Entrepreneur, Investor, Mentor and Board Member!
Abrams, a 6x founder, started his career at Netscape as a Software Engineer before going on to found various companies including Friendster (backed by Benchmark & Kleiner Perkins) and Nuzzel (acq. by Scroll in 2019). With extensive operating experience under his belt, Abrams then went on to found Founders Den, a workspace and community for startups and investors, and most recently 8-Bit Capital in 2019, where he currently serves as Co-Founder and General Partner. With deep cap table knowledge as an operator and investor, we discussed:
From Netscape to 8-Bit: his journey from operator to founder to investor 📈
Challenges around starting a Venture firm 🏗️
How to source great deal flow 💡
Cap Table advice ⺇
TCT: Thanks for sitting down with us, Jonathan. Let’s jump in.
How did you start out with regards to your career? How did that lead to where you are now?
Originally from Canada, I studied Computer Science before starting my career in Telecommunications Software. In 1996, I took a leap of faith and moved to Silicon Valley to join Netscape as a Software Engineer.
Truth be told, I’ve never taken a business or finance class in my life, so my path to becoming a full-time investor occured via the technology/entrepreneurship route, rather than traditional finance/MBA route. Fortunately, my business partner, Kent (Lindstrom) at 8-Bit Capital, has a very complementary background, as a former MBA/CFA before getting into the startup scene. Together, we make a great team.
You transitioned from operator to investor. What advice would you give operators thinking about transitioning into investing full time?
I’ve frequently heard a myth that operators who become investors will view an investment opportunity based on how they would operate it, or want to actually try to run the company themselves.
I have deep empathy for founders, having been in the trenches myself as a founder and operator, but I don’t want to try to run the companies that we invest in. I know how hard it is to run a startup. Kent and I have a lot of experience mentoring entrepreneurs, but we still want to invest in Entrepreneurs who are not going to require huge amounts of help.
The biggest change for us is to be investing full-time vs. part-time, and have much more bandwidth to proactively meet Entrepreneurs and consider investment opportunities, rather than just making Angel Investments opportunistically.
You’re currently running 8-Bit Capital.
What has been the most challenging aspect of the job? What’s been the most rewarding moment to date?
8-Bit Capital is very new.
Source: Pitchbook News & Analysis
We have made 4 exciting investments so far.
We invest in startups that connect people and businesses in new ways. I view building 8-Bit Capital as us institutionalizing the work that Kent and I have already been doing for years, helping other Entrepreneurs as Angel investors, Advisors, and Mentors. We stick to what we know, which means investing in early-stage Software startups. But, we are still “baby VCs” in a sense, with a lot to prove. We had some things to learn about fund management and portfolio construction, but we have been doing our homework and studying this stuff for years (as LPs and advisors to funds ourselves) and have been lucky to be mentored by some of the top Fund managers in Silicon Valley.
The most rewarding part (by far) is working with other Entrepreneurs.
What are some notable stories from your times founding and selling Nuzzel and Friendster, and as a Software Engineer at Netscape and Nortel?
When I moved to Silicon Valley to work at Netscape (disclaimer: this was in 1996), there was a new company perk I wasn’t used to: free sodas (something unheard of back at Nortel in Canada). I thought I was in heaven!
It’s funny to think of how something so simple, such as free sodas back in the late 1990’s, now compare to the lavish perks and free food (amongst other luxury perks) that companies like Google and Facebook offer their employees. Of course, things are different now while people are working from home instead of on campus, but it’s good to remember your roots and where it all began.
Friendster was a real roller coaster. We started an entire industry and grew very fast. Unfortunately, after receiving Venture Funding, Friendster went through 6 different CEOs in 6 years, and the full potential of the company was not realized. Needless to say, Kent and I learned a LOT from the Friendster experience.
Nuzzel won a lot of love and recognition. Our product was solving important problems: we were helping people connect with the content they really needed to know about (vs. the click-bait, fake news, and toxic content that is prevalent on today’s big social platforms). But, it was very difficult for any of the independent players to compete with the likes of big players like Facebook, Google, Apple, etc. Most of the other news app startups are long gone.
I’m proud and glad to see that Nuzzel is still operating today, and many influential people still use it every day.
Would you call yourself the Godfather of Social Networks via Friendster?
I’m proud of the work we did at Friendster, and I think we inspired an entire generation of social products that worked differently than how the web was before Friendster.
The innovative concepts that Friendster popularized were probably bigger than any one single company. It’s probably hard for some people to remember how things were before Friendster, when people did not use their real names on the Internet, and you did not see little photos of your friends in almost every website and app.
Any particular thoughts on Facebook/TikTok/Twitter and media censorship today?
I think the big online platforms still have a lot of work to do in terms of dealing with harassment and toxic content, and the integrity of our elections. I’ll leave it at that :)
What new trends are you watching across Software Development? How has it changed since you were coming up as an Engineer early in your career?
The world of software development is always changing.
There are some newer programming languages these days like Rust, Kotlin, and Go that seem really interesting. When we started Friendster, there was no AWS. In contrast, at Nuzzel, we did not need to worry about racking our own servers and changing hard drives at a data center, which was a big improvement. Many of the areas that we are interested in at 8-Bit Capital involve software trends like DevOps, Open Source, Serverless, Data Science, and No-Code/Low-Code.
We are now seeing a big acceleration of the move to the Cloud and the Digitization of Business.
How do you source deal flow?
Our networks are diverse and broad.
We don’t just source from one single alumni network. Founders Den is a source of dealflow for us since it’s a very successful community of Founders and Investors (now almost 10 years old!).
We also get deal flow from many other sources including:
Fans of Friendster, Nuzzel, Founders Den
Kent’s podcast “Something Ventured”
For three out of our first four investments at 8-Bit Capital, the founders reached out to us directly.
Overall, we find that the deals we receive from Entrepreneurs tend to be more compelling than what we are seeing via other investors. As an Angel Investor before 8-Bit Capital, some of my deals came from serendipitous encounters with Entrepreneurs who were seeking my advice.
What are you passionate about outside of work?
Between 8-Bit Capital, Founders Den, Girls in Tech, mentoring, and my family, I don’t have a lot of discretionary time these days :)
I read a lot, and like to watch TV. My current favorite show is a British show called Friday Night Dinner, which is currently streaming on Amazon.
Tell us about Girls in Tech.
Girls in Tech is a global non-profit focused on the engagement, education and empowerment of girls and Women who are passionate about technology. Girls in Tech has more than 60,000 members in tech in more than 30 countries. The organization was founded by my friend Adriana (Gascoigne), and I’ve been on the board for 5 years. Given the diversity and equity challenges that the startup and venture worlds are still facing, I’m a proud Girls in Tech supporter and advocate.
What's your secret for getting on the cap table?
Even before we could write bigger checks via 8-Bit Capital, Entrepreneurs wanted us on their cap table for our advice or our name.
We’re able to get on the cap table for several reasons, including: our relationships, our experience as operators, our empathy with founders, and our track record as mentors.
Thank you for your time and thoughts, Jonathan. We look forward to the continued success of you and 8-Bit Capital.
Deal News 8/21-8/28
EnerVenue raises $12,000,000, led by Peter Lee | EnerVenue provides metal-hydrogen batteries for large-scale renewable and storage applications.
CommonStock raises $9,700,000, led by Floodgate, QED Investors | CommonStock is a developer of a group chat platform that is designed to share investment knowledge and decisions.
Turing raises $6,000,000, | Hire the best remote software developers, pre-vetted for a Silicon Valley bar. Find Remote U.S Software engineering jobs.
Stratify Technologies raises $4,900,000, led by Madrona Venture Group | Stratify Technologies provides real-time and collaborative budgeting & forecasting solution.
Turing raises $4,500,000, led by Foundation Capital | Hire the best remote software developers, pre-vetted for a Silicon Valley bar. Find Remote U.S Software engineering jobs.
Azul 3D raises $4,500,000, | Azul 3D is a 3D printing company that allows users to print 3D structures from a wide pallet of materials.
Copper Banking raises $4,300,000, led by PSL Ventures | Copper is the first of its kind, all-digital bank, built specifically for teenagers. Welcome to #TheNewHustle
Agilis Chemicals, Inc. raises $3,700,000, led by Runway Venture Partners | Agilis is a commerce platform for the chemical industry. Chemical suppliers can launch their branded portals on Agilis platform.
Wrapbook raises $3,600,000, led by Equal Ventures | Wrapbook provides digital profiles that facilitate onboarding, paying and insuring project workforces compliantly.
Turing raises $3,500,000, | Hire the best remote software developers, pre-vetted for a Silicon Valley bar. Find Remote U.S Software engineering jobs.
EMME raises $2,500,000, led by Magnetic Ventures | On a mission to put women's health in women's hands.
RNAimmune raises $2,350,000, led by Terra Magnum Capital Partners ("TMCP") | RNAimmune is a biopharmaceutical company specializing in the discovery and development of mRNA-based therapeutics and vaccines.
Triumvira Immunologics raises $55,000,000, led by Leaps by Bayer, Northpond Ventures | Triumvira Immunologics Inc. is an immunotherapy company
Restream raises $50,000,000, led by Insight Partners, Sapphire Ventures | Restream is a multi-streaming solution that allows producers to analyze and interact with their viewers across platforms.
Prescryptive Health raises $26,000,000, led by Morningside Group | Prescryptive Health is a digital health company focused on improving the prescription drug market.
XYZ Robotics raises $20,000,000, led by Source Code Capital | XYZ Robotics develops AI-enabled robotic perception and manipulation technology for logistics and manufacturing automation.
Trove raises $16,000,000, led by a16z crypto | Trove build tools and real-time datasets to help companies better analyze and communicate compensation internally.
SparkMeter raises $12,000,000, led by Breakthrough Energy Ventures, Clean Energy Ventures | SparkMeter offers comprehensive low-cost metering solutions for everything from rural micro-grids.
Juni Learning raises $10,500,000, led by Forerunner Ventures | Juni Learning is an online academy for accelerated learning.
VertaAI raises $10,000,000, led by Intel Capital | VertaAI builds software infrastructure to help enterprise data science and machine learning (ML) teams develop and deploy ML models.
Berbix raises $9,000,000, led by Mayfield Fund | Berbix develops identity verification software that uses machine learning techniques to instantly spot fraud.
Fox Robotics raises $9,000,000, led by Menlo Ventures | Fox Robotics is a platform the engineers and manufactures autonomous forklifts that specialize in trailer unloading.
Narrative raises $8,500,000, led by G20 Ventures | Narrative empowers participants in the data economy.
Fibronostics raises $8,000,000, led by AT Capital Group, Elev8.VC | Fibronostics is a non-invasive algorithm-based diagnostics company.
Barn2Door raises $6,000,000, led by Bullpen Capital | Barn2Door helps farmers save time and grow sales by managing inventory online and automating orders across web, social, mobile, and email.
MURAL raises $118,000,000, led by Insight Partners | MURAL is a digital workspace for visual collaboration in the enterprise that solves problems and builds consensus using visual methods
Course Hero raises $70,000,000, | Course Hero is an online learning platform with study resources that help students feel confident and prepared, from day one to graduation.
Finix raises $30,000,000, led by American Express Ventures, Lightspeed Venture Partners | Finix is a payments infrastructure platform that facilitates real-time push-to-card payments.
Shopmonkey.io raises $25,000,000, led by Bessemer Venture Partners | Smart and simple software to run, understand, and grow your auto repair shop.
Aetion raises $19,000,000, led by EDBI | Aetion delivers real-world evidence solutions to manufacturers, purchasers, and regulators of medical technologies.
Freenome raises $270,000,000, led by Bain Capital Life Sciences, Perceptive Advisors | Freenome is a platform that helps design healthy conditions for individuals.
Kinnate Biopharma raises $98,000,000, led by RA Capital Management | Kinnate Biopharma develops precision oncology therapeutics to treat patients with genomically-defined cancers.
PatientPop raises $50,000,000, led by HLM Venture Partners | PatientPop is the only complete practice growth solution that empowers healthcare providers to thrive in the digital age.
Socure raises $35,000,000, led by Sorenson Ventures | Socure is a predictive analytics platform for digital identity verification of consumers.
OneDrop raises $34,700,000, led by Bayer | One Drop is a diabetes management platform that helps people navigate diabetes together.
Split Software raises $33,000,000, led by Comcast Ventures | Split Software is a feature delivery platform that builds software for engineering teams to build products.
Songtradr raises $30,000,000, led by St. Baker Australian Family Office | Songtradr is an online marketplace designed to facilitate music licensing for films, TV shows, ads, apps, and other media.
Lyra Health raises $110,000,000, led by Addition | Lyra helps businesses find the best care for the mental and emotional well-being of their employees.
Dataiku raises $100,000,000, led by Stripes | Dataiku operates as an enterprise artificial intelligence and machine-learning platform.
Synthego raises $100,000,000, led by 8VC, RA Capital Management, Wellington Management | Synthego is a genome engineering company that enables access to CRISPR to accelerate life science research and development.
Clene Nanomedicine raises $42,500,000, led by SymBiosis LLC | Clene Nanomedicine is a clinical-stage biopharmaceutical company.
Redis Labs raises $100,000,000, led by Bain Capital Ventures, TCV | Redis Labs provides an in-memory database platform for applications and different services.
Warby Parker raises $120,000,000, led by D1 Capital Partners | Warby Parker is a lifestyle brand that offers designer eyewear at a revolutionary price operating as a socially conscious business.
Sources: Crunchbase, LinkedIn, Twitter.