Roc Nation’s VC Neil Sirni lays out his investment strategy – TechCrunch

Jay-Z’s Roc Nation introduced in 2017 that it was forming a venture investment arm referred to as Arrive. And the agency has been busy since then — co-founder and President Neil Sirni mentioned Arrive has made 29 investments to date.

At the identical time, Sirni hasn’t actually mentioned a lot about these investments publicly, or concerning the broader strategy. So he reached out to me just a few months in the past, suggesting that he was prepared to supply extra particulars about Arrive.

“We’re now three years, 29 investments in and expanding – so it felt like the right time to start opening up a bit,” he mentioned.

Over the course of some back-and-forth emails, we mentioned how Arrive suits into the bigger goals of Roc Nation, how Sirni (a former Goldman Sachs govt) makes investment selections and the place he’s focusing subsequent. (Spoiler: Southeast Asia is a giant a part of that reply.)

He was additionally keen to supply testimonials from Arrive’s portfolio corporations — for instance, founder Aaron Rasmussen mentioned that “when Arrive commits to your mission, they commit,” whereas Helm co-founder and CEO Giri Sreenivas mentioned that the agency “brings something that I don’t see in traditional institutional investors – legitimate operational expertise around brand and marketing.”

You can learn our electronic mail Q&A, flippantly edited for size and elegance, beneath.

What is Arrive and the way does it match into the bigger Roc Nation umbrella?

Arrive is Roc Nation’s enterprise platform. Roc Nation is a full-service music and sports activities administration, music publishing and leisure firm based by Jay-Z. Roc Nation and its affiliated corporations have constructed a diversified enterprise that employs a number of hundred individuals. These companies embody artist and athlete illustration, a portfolio of spirit manufacturers, an attire line, a philanthropy division that manages 4 charitable organizations, a content material streaming service, a digital group that oversees social media accounts with over 1.4 billion followers, a gross sales and advertising division that works on numerous partnerships with Fortune 500 corporations, communications, video manufacturing and stay occasion manufacturing, amongst others.

The Roc Nation infrastructure can add worth to many various kinds of companies throughout numerous levels, which is why we created Arrive. For consumer-facing companies, Arrive leverages the Roc Nation infrastructure to assist corporations with branding, inventive, advertising, communications, and different providers. For enterprise, we use our broad community of B2B relationships to assist with enterprise improvement.

Being a strategic enterprise investor on the cap desk of a portfolio firm isn’t solely concerning the investment but in addition how a lot human capital a fund can deploy to drive long-term, actual and distinctive worth for entrepreneurs and their companies. So, we’re leveraging the broader Roc Nation platform to assist portfolio corporations and, in flip, receiving entry to nice entrepreneurs.

What sorts of investments do you usually make — forms of corporations, dimension of investment, and so on?

We’re comparatively sector and stage agnostic. We have devoted capital in an early-stage fund that tends to deal with Series A to Series C, however we’ve additionally began to SPV development and pre-IPO investments as we lay the inspiration for a devoted development car later this yr.

How do you make investment selections? Is Jay-Z concerned within the course of?

We gravitate towards corporations that we will present significant help to however which might be outdoors of Roc Nation’s core industries of music and conventional sports activities. Thanks to our platform, that’s an especially broad alternative set. To date, we’ve made 29 investments underneath the Arrive umbrella in every part from fintech, insurtech, edtech, well being & wellness, social, and gaming. Geographically, we’re investing roughly 80% in North America, primarily the US, and 20% throughout Southeast Asia, particularly, Singapore, Indonesia, and Vietnam. As a strategic investor, we by no means lead offers and all the time co-invest.

Our long-term focus is on driving actual and distinctive worth for our portfolio corporations. If we stay hyper-focused on this mission, we consider we now have the chance to construct a permanent model as a high tier strategic investor.

Jay-Z approves each Arrive alternative; he, Juan Perez, and Desiree Perez are overwhelmingly supportive of Arrive and what we’re collectively attempting to perform.

TechCrunch: What’s your largest success story to date?

Neil Sirni: I’m very happy with being co-founder of Arrive and what it took to get right here. In the grand scheme of issues, we’re simply getting began, however I’ve been an entrepreneur — after leaving a big public firm — for over 10 years now. It’s been a curler coaster with many sacrifices, however I can perceive and relate to our founders and their journey which makes this expertise much more rewarding. The founders of Roc Nation have constructed their companies brick by brick as nicely, so all the group is united by this entrepreneurial mindset. I nonetheless contemplate myself a founder and operator first, whose enterprise occurs to be making investments.

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NEW YORK, NY – OCTOBER 20: Jay Z performs throughout Tidal X: 1020 at Barclays Center on October 20, 2015 within the Brooklyn borough of New York City. (Photo by Taylor Hill/FilmMagic)

Given that Arrive has been round for just a few years, what made you’re feeling like that is the time to start out speaking extra overtly concerning the fund?

When Arrive launched just a few years in the past, I hated the thought of speaking about what we’re going to do. Instead, we wished to quietly truly go do it; be taught, enhance, construct and, within the course of, show that we’re not, and by no means will probably be, vacationers within the enterprise ecosystem. We’re now three years, 29 investments in and increasing – so it felt like the appropriate time to start out opening up a bit.

What’s an instance of an investment the place working with Arrive/Roc Nation led to features past the monetary investment?

Arrive capabilities like many different traders in that we spend time understanding an organization’s imaginative and prescient after which attempt to present them significant levers to tug to assist drive their success. Our toolkit is exclusive due to the Roc Nation platform and community. We’ve discovered that each our portfolio corporations and their different traders, usually conventional enterprise funds, discover these levers complementary and additive to the cap desk.

Arrive usually works with portfolio corporations throughout three fundamental areas. The first is inventive and model advertising.  The second is enterprise improvement and partnerships. The third is communications.

Communications efforts are usually centered on driving short-term or quick consciousness. Many of our portfolio corporations obtain broader press protection after we put money into them. That preliminary consideration usually dies down inside every week or two though these information tales stay as searchable belongings that the corporate won’t in any other case have. While this may be of some worth, particularly for client companies, we consider it’s on the backside of the checklist in comparison with the long-term advantages that may be derived from Roc Nation’s underlying infrastructure in model advertising and enterprise improvement.

In phrases of inventive and model advertising, we’ve doubtless saved our earlier stage portfolio, in combination, over 1,000,000 {dollars} by offering model and company work without charge.  Examples of this embody marketing campaign ideation, graphic design, video manufacturing, internet hosting stay occasions, and product integrations, amongst different actions.

For enterprise improvement and partnerships help, we now have leveraged our community to assist portfolio corporations launch their very own inside philanthropic platforms, leveraged our B2B relationships to introduce new companions and prospects, introduced in different strategic traders in a focused means, helped corporations navigate endorsement offers, and recruited non-technical govt expertise to affix their corporations.

We don’t faux to be a magic bullet, no investor may be, however we’re centered on constantly bettering and constructing on the providers that we offer to our portfolio corporations. The founder journey is rarely a straight line and we pleasure ourselves on being prepared to do no matter we will on their behalf. Stephen Francis, SVP at Arrive, and I are accessible to our portfolio corporations any day and time.

Do you see these investments as primarily strategic for Roc Nation, or are you centered on monetary returns?

‘Strategic’ investor, within the context of Arrive, refers back to the strategic worth that we convey to the cap desk of a portfolio firm.  We leverage that strategic worth to get into offers and kind relationships with entrepreneurs in whom we now have excessive conviction.  Our final objective is monetary return and Arrive’s investments aren’t meant to be strategic in nature for Roc Nation as an working firm. Instead, an investment from Arrive is supposed to be strategic for the portfolio firm.

You mentioned you’re stage agnostic with capital dedicated to completely different levels. Can you say something extra what the breakdown is when it comes to early stage vs. later development offers, and the way which may change with the brand new development fund?

Of our 29 investments, I might classify 25 as early stage and 4 as development.  In regards to proportion of capital, the 4 development investments account for a bit of over 35% of complete capital deployed. When we do have a devoted development fund, I anticipate the amount of development investments to choose as much as roughly 3 – 6 per yr.

 What are your priorities for 2021?

At a excessive stage our priorities are to construct out a bigger group to make sure that we’re staying very engaged with the portfolio as we scale and to proceed being aggressive in deploying extra capital to again nice corporations.

On a extra granular stage I’m trying ahead to bodily getting again to Southeast Asia, particularly Singapore, Indonesia and Vietnam, frequently. We’re actually bullish on the area and consider it’s solely a matter of time earlier than extra enterprise funds deploy vital capital there. We began to speculate numerous time there in 2019 as a part of our plan to deploy roughly 30% of our early-stage fund within the area. That enlargement has been hindered by COVID-19. However, I’ll make quarterly journeys as soon as journey normalizes. There is nothing like in-person interplay to construct relationships and belief, particularly internationally.

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