Ben Ling, a prolific angel investor turned venture capitalist, has never put a lot of stock in the need for a new, decentralized internet. It’s why the firm he founded almost exactly four years ago — naming it Bling Capital (a nickname from way back) — doesn’t have the kind of bets that are right now becoming a black eye for a lot of other venture outfits.
It might also be why Ling — whose longtime friend and co-investor Kyle Lui joined Bling Capital eight months ago from the cross-border firm DCM — seemingly had little trouble closing on $212 million across two new venture funds: a $109 million seed-stage vehicle, and a $103 million opportunity-type fund that the two will predominantly use to invest in their breakout portfolio companies.
Of course, bets on companies like Rippling, a six-year-old software platform now valued at $11.25 billion, and Airtable, the cloud-collaboration service that’s also valued at around $11 billion, didn’t hurt either, presumably.
We talked with the pair yesterday to learn more about their mission to back startups focused on fintech, digital health, B2B SaaS and, on rarer occasion, the consumer internet. Our chat, below, has been edited for length and clarity.
TC: Ben, Kyle is based in San Francisco, but you moved to Miami a couple of years ago, where FTX had a notable presence. Are you seeing the effects of FTX’s implosion? Has the mood shifted there?
BL: I’m not qualified to answer that question, because I was out [of town] last week. But what’s actually interesting is that during my time in Miami and meeting a lot of entrepreneurs and investors, FTX actually never came up. For me, the circles that I ran in, probably one out of 10 was a focused crypto investor and the other nine were traditional VCs or entrepreneurs. Our firm has not invested in crypto, it’s not a focus area for us, so that’s also why we don’t spend a ton of time with a lot of the crypto funds and VCs.
Why did you decide to avoid crypto?
BL: We’ve never been focused on crypto since the start of Bling Capital. Even when I was at Khosla Ventures [where Ling logged close to six years before hanging out his own shingle], we avoided crypto.
Generally, my feeling is that all the currencies will have value if people agree that there’s value. Just like art, just like gold, when people agree on something as a store of value, it becomes [valuable] because there’s a common belief system. For a lot of the applications, we struggled to really understand why they were truly better than the existing incumbents and why they would actually take over. Why were they going to be 10x better, 10x faster, 10x cheaper? We just had standard questions around adoption.
We also never really focused on it, so we felt that others were more experienced in the space and much more advanced and that we did not have a comparative advantage.
You don’t believe that blockchains could improve current-day SaaS offerings?
BL: B2B SaaS is an incredible area of focus. There’s a lot of verticalized software that I think will make major inroads because there’s a lot of the standard Salesforce-type SaaS and there’s consumer-type SaaS that has risen, and now the SaaS marketplace movement is really making its way into B2B, as well. And I think that most, if not all, of these problems can be solved by the traditional Web 2 technologies. We question whether you need web3 technologies to succeed in B2B SaaS.
Our investing philosophy is that we either have to have a network advantage or an expertise advantage over the other investors in order to invest in something. Otherwise we’re not qualified to [make a particular bet].
When you talk about network advantage, do you mean your LP base? I know that Bling Capital’s two earlier funds had something like 100 limited partners. You also, relatedly, have what you call a product council. Are these people one and the same?
KL: Yeah, I mean, [our] product council members are folks who tend to be heads of product, heads of engineering, heads that go-to-market at various top technology companies and it’s important for us to continue to add them because they are not only our largest source of deal flow, but are also very active in advising our startups.
And they are also LPs? They have a stake in your funds to incentivize them to help your portfolio companies?
BL: All product council members are LPs in the fund, so when the fund is invested in a company, all of them are invested in the company as well. But 80% of the fund is now institutional investors.
Obviously the market has slowed down, even for early-stage startups. What are you seeing in terms of how long it now takes to do a deal?
KL: I would say on the new deal front, on the pre-seed and seed side, we’re seeing timelines that were one to two weeks now [extending into] more like two to four weeks, which is really healthy because it allows for more proper diligence.
We are able to do deals in a matter of days if we have strong conviction, but we do like that the market is a bit more sane.
Another dynamic that we’re seeing is that entrepreneurs are starting to really wake up to this new world, and that wasn’t the case even six months ago. Back then, we saw growth deals really kind of halt, but that didn’t really impact the way that first-time founders in particular thought about their valuations. Now we’re seeing them come around as well. So [collectively] we’re actually seeing a lot of really interesting deals.
In terms of returns, I know Bling Capital is too young to have actual exits yet but would guess Rippling alone got your investors excited. Because I know you target 10% to 12% ownership of your portfolio companies, can I ask: Do you own anywhere near that size a stake in Rippling?
BL: We invested out of our opportunities fund in the latest round [of Rippling]. But I also happen to be a personal seed investor in Rippling. I was at Khosla Ventures at the time and Bling Capital didn’t yet exist, but [Rippling founder Parker Conrad] invited all of the original Zenefits investors that stood by him to reinvest, and I invested personally during that seed round.
KL: It’s one of Ben’s largest personal checks.
Did Khosla Ventures also invest?
BL: I don’t believe so.