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The Guardian - US
The Guardian - US
Business
Isabel Slone

A crypto obsession and early Crocs investment lie behind an outsider’s ‘hustle mentality’

Maya Bakhai of Spice Capital.
Maya Bakhai of Spice Capital. Photograph: Maria Spann/The Guardian

With its colorful text and whimsical, cartoonish animations, the website for Spice Capital looks more like the online portfolio of a recent art school graduate than the landing page of a venture capital firm. But perhaps that’s the point.

Maya Bakhai, 28, founded her company in October 2021 with the goal of adding some seasoning to the predominantly white, male, fleece-vest-clad field of venture capital. According to recent data, companies founded by women receive less than 3% of all venture capital investments, and women make up less than 15% of investors. “In past jobs, whenever a company’s branding or messaging or team diversity was bland, I would always say, ‘We need to add some spice to that,’” said Bakhai, whose CV includes stints at the accounting giant PricewaterhouseCoopers and Thirty Five Ventures, the venture capital firm co-owned by the basketball star Kevin Durant.

Bakhai taps into her perspective as a young person of color to identify companies that more traditional firms might pass over. Her first investment, a bet she placed as an undergraduate on the footwear brand Crocs, has since ballooned over 350%. “I didn’t work at JP Morgan or any of those big banks,” said Bakhai, who grew up in an Indian household in Fort Lauderdale, Florida. “I don’t have this traditional résumé. I just have the hustle mentality.”

Since founding her firm, which operates out of her Brooklyn apartment, she has infused some 40 businesses with anywhere from $100,000 to $250,000 in capital, from a web3 chess platform to a carbon credit company that uses blockchain. “The only way to break the culture of finance, tech and venture capital being this boys club is to have women and people of color in positions of power,” she said.

Creating a sense of community in the dog-eat-dog world of venture capital is part of Bakhai’s mission. Her newsletter, Hot Sauce, is a compendium of blogs, tweets and podcasts for fellow tech and crypto obsessives. She also oversees the Spice Jar, a group chat on the Telegram platform where founders on the Spice roster can connect and bounce ideas off one another.

The Spice Capital website landing page.
The Spice Capital website landing page. Photograph: Spice Capital

Part of her mission is bringing an entirely new generation of investors into the fold. While most venture capital firms require a minimum buy-in of $250,000, Bakhai has erased the minimum financial barrier to entry for women and people of color. “If you’re a dude you can pay $250,000, but if you’re from an underrepresented group, you can invest $5, $1,000 or $10,000. No matter the amount, I want you in my community,” she said.

How did you first become interested in finance?

When I was child, I dreamed of being a pop star. I originally wanted to go to NYU so I could be in New York City and pursue a music career. But my first-generation south Asian immigrant parents would only support me if I got a business degree, so we compromised and I studied music business. Ultimately, after being exposed to great professors and clubs at Stern School of Business, I decided to pursue a degree in finance and data science. I ended up interning for [Jay-Z’s entertainment company] Roc Nation. Today, Spice has a large focus on the creator economy, so while I did not fulfill my childhood dreams of becoming a pop star, I’m doing the next best thing by supporting businesses that look to improve the lives of independent creators.

What was the impetus for founding Spice Capital?

I noticed there was a mismatch between the folks that were deploying capital and the folks building startups. In the past four years there was such a huge influx of investors thanks to things like the subreddit group wallstreetbets and apps like Robinhood that were removing trading fees. We were in a low-interest rate environment and companies started thinking more about who they should be taking money from. When founders take money from me, they’re getting valuable advice from someone they might not hear from otherwise.

What are some things you look for when evaluating a company you might want to invest in?

I look for three things: team, TAM [total addressable market] and traction. Team is the most important. As a founder you have to have this almost relentless obsession with solving a specific problem, so if they have a personal background in what they’re pitching, or know the market better than the investors, that’s a big opportunity for me. Total addressable market is: how big is the market they are selling to? If they’re selling pencils, how many pencils are sold per year? Traction is: are people willing to pay right off the bat for what you’ve built? Even if a company starts out small, with five users, and the next month they grow to 100, that’s very compelling to me.

Who are you most excited about at the moment?

Dirt, a web3 media company, is leveraging the blockchain to create a community-driven entertainment brand at the intersection of publishing and consumer social. The founder, Daisy Alioto, has figured out how to monetize their audience directly via NFTs. In just over one year of being in business, Dirt has made over six figures in revenue from digital collectibles.

There’s another company called Bonside, which offers alternative financing to brick-and-mortar companies. Say you run a matcha company and you want to open a second location, you’d have to go to a bank and get a loan against your house. To avoid that, the founder created a platform where everyday investors can offer loans and, in turn, get a cut of the revenue and receive passive income.

How do you think the structure of investing needs to shift in order to adapt to the changing world?

Maybe in the past all you needed in order to have a successful business was the perfect unit economics, but brand and culture are growing in importance. Companies that have a strong brand have managed to create a community that people want to be a part of. When they sell a product you are buying into an unspoken cultural dynamic.

What are some things investors should look into when it comes to their next moves?

The creator economy. I know it was exploding five years ago, but it’s been defined too narrowly. I think we’re moving into phase two, past Patreon and Substack, where the next wave of companies to invest in will be ones combining the creator economy with the ownership economy. The internet isn’t just making people famous, it’s turning them into businesspeople as well, so I’m interested in businesses creating solutions for the future of work.

What kind of challenges come along with running a scrappy venture capital fund?

Fundraising. Because I don’t fit the traditional profile of what an investor is, my economic potential isn’t valued as highly. I saw a chart that showed how vast the difference is – in 2022 all US-based venture capital funds raised a total of $170.8bn compared to $2.4bn for women-led US-based venture capital funds. Spice Capital is all about expanding the definition of what success looks like. I’m out here saying, “Hey, this thing you’ve never heard of? It’s going to be big. Trust me.”

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