Chasing Capital Ep 3 with Bessemer’s Mike Giampapa
3. Bessemer ’s Mike Giampapa: Crypto Becoming a Fully Functional Asset Class, Free as Quite a Powerful Moat, and Focusing on the Best Company to Join Not the Equity Package
In this third episode of Chasing Capital, I chat with Bessemer’s Mike Giampapa on a wide range of topics like the huge upside in consumer vs enterprise with product and business model innovation, how crypto is becoming mainstream amongst investors, and the importance of choosing a good company/sector over your title, comp, and equity package when coming out of college.
Mike Giampapa is an investor at Bessemer where he focuses on fintech and emerging consumer and enterprise tech and is involved in investments like KYC api company Alloy and NYDIG, a Bitcoin-related solutions provider for Institutional investors. Previously, Mike was an investor at IVP working with portfolio companies like Coinbase and Masterclass and worked in banking and asset management at JP Morgan. Mike studied Econ and was a varsity football player at Johns Hopkins and got his MBA at Harvard, where he helped run the Blockchain Club there.
Reflections
Had a great time chatting with Bessemer’s Mike Giampapa for the third episode of the Chasing Capital podcast. Two points that stood out to me were his need to move over to a more mainstream job (investment banking) before going into VC and our discussion around bigger outcomes in consumer vs enterprise.
Firstly, I was a bit surprised when Mike said that he had to switch over from his asset management role to investment banking in order to be even considered for a job in VC as his role essentially wasn’t comprehensible to recruiters. In an industry that prides itself on innovation this reinforcing of the status quo in hiring (arguably the biggest lever of innovation in a particular space) is quite ironic — no wonder there are relatively few women/people of color and multitudes of white dudes from HBS or Stanford GSB. This is a place where a conscious change could have a disproportionately positive impact.
On the discussion about consumer vs enterprise opportunities, Mike’s comment about the advantages of only having to charge a little to a lot of people and how the biggest companies innovate on product and business model (e.g. Robinhood) pair together nicely. While creating these consumer products might just feel like you’re throwing things into the ether and hoping that it captures the zeitgeist (or saying outwardly that your one psych course in college has given you a unique insight into human behavior) compared to the slightly clearer product definitions in consumer, you are given that great flexibility to innovate on business model. While ads have clearly been a quite effective, albeit sort of lazy and potentially damaging, monetization strategy, there is still a ton of freedom to try new things. Newer consumer social companies are defiantly experimenting with this with Robinhood’s free trading for order flow to market makers, Patreon’s subscription model for creators, tipping that will be unveiled shortly in Clubhouse (and is already quite popular in China), and other ways of incorporating micro-transactions. In a world where there is apparently a tradeoff between rights to data and privacy and helping small businesses, these business model innovations will be necessary for any socially responsible (and slightly moral) founder to ponder for these sustainable consumer products — in social and beyond.
Can’t wait for episode 4 next week with GGV Capital’s Graham Carney where we discuss GGVs truly global investing strategy, working at a startup vs a sure-thing, and a work of fiction that helps inform his investing.
