Launch House raises millions to launch homes (and the next big startups) – TechCrunch
In May 2020, a trio of friends rented a house in Tulum, Mexico and invited their internet friends. The project was dubbed The Launch House, and the 18 entrepreneurs who came to settle there had to do the following: pay rent, start projects and build their businesses in public. Other homes started popping up around the world around the same time, a nod to old-school hacker homes, but built for the coronavirus remote-working era.
More than a year later, Launch House has extended its physical and digital presence beyond a one-off project. The trio – Michel houck, Brett Goldstein and Jacob Peters – announced that they had raised $ 3 million to expand their residency program, both physically and digitally. Next fall, Launch House will launch programs specific to LA and NYC, as well as residencies designed to bring people together in Web 3.0, fintech, B2B business, and the designer economy.
The funding round was led by Flybridge Capital Partners, with the participation of Day One Ventures and Graph Ventures. More than 100 angel investors have also invested money in the company, including 60 first members of Launch House and notable technicians including Alexia Bonatsos, Balaji Srinivasan and Mike Duboe.
From its origins in Tulum, Launch House has grown to focus on a more cohort-based approach. Entrepreneurs are invited to take a four-week residency in Paris Hilton’s former Beverly Hills Mansion, which the company has rented. To date, over 200 people from eight cohorts have passed through the launch house to bring their ideas to the seed stage.
Here’s where it goes beyond the traditional hacker house. In-person residencies are seen as integration events into the larger Launch House community, which includes digital and physical events, services that help scale startups and internal social networks. Houck, a former product manager at Airbnb, is working on a service that allows members of the Launch House community to invite other members to stay at home for the residency.
While the company’s next chapter, dubbed Season 2, will feature new sector homes in New York and Los Angeles, the team has focused on a greater focus on digital spaces. While describing the transition from offline communities to online ones, Goldstein gave the metaphor of religion.
“There are tons of important religious sites in the world, like Mecca and the Western Wall, but you can be a good member of this religion without going to these places – and in fact, most people don’t. not, ”he said. The co-founder believes the same can be said of Launch House attendees, who may never set foot in a house but are active members of the community virtually.
“We see ourselves less as a hacker house and more as a company-wide membership community,” Goldstein said. “These physics [spaces] are just the first corner to establish deep connections. The company’s bet is therefore that it can help create enough successful startups that its name will signal a prestigious program – and thus gain more members as its brand grows.
While most startups are in their early stages, some have started popping up and rising from Y Combinator, Sequoia, Village Global and even Beyonce and Jay Z. Home-formed startups include Showtime, Compose and Colabra, while others like Wombo and TagMango have achieved milestones and fundraising goals while participating at home.
Unlike other early stage accelerators like Y Combinator, Launch House does not take any stake in any of the startups that launch from their community.
“Great founders have tons of options, and we believe that in order to attract people to your community, you can’t demand fairness from the start,” Goldstein said. “It’s kind of an archaic model.” Instead, Launch House makes money through a membership model. Resident members receive a free one-year community membership with a residency fee, and then it is an annual membership.
“10x better” than WeWork
The size of the startup could be reduced somewhat if it can alone growing up through physical spaces, which is part of why he’s perhaps starting to focus more on the digital world. WeWork, for example, taught many lessons, one of which was about the real difficulty of flexible office space for a business.
As to whether the infamous real estate company has tarnished investor interest in Entrepreneur Centers, Peters pointed to Launch House’s top investor in today’s round: Jesse Middleton of Flybridge Ventures. Middleton once built WeWork Labs, which the co-founders say gives them a first-hand perspective on how to build in a “10x better” way than the near-public company.
The other challenge for Launch House will be to organize a diverse group of engaged community members, a struggle that every online community goes through.
The residency application process currently rates members according to three categories: how exciting a person is as a founder, how exciting their business is, and what benefit they would gain from joining this community right now, which can go from enterprise stage to who else is in the cohort that month. Once the Launch House team walks through the cohort, a group of 50 members of the Launch House community volunteer to interview potential members. Finally, the co-founders do a final check before sending offers.
It’s an intensive process which, if not done intentionally, could limit access to the launch house by rewarding those who lean on each other. Launch House said it has had cohorts in the past with 40% founders underrepresented, but its current cohort is around 25% POC.
As the company expands its membership base, it will need to manage new pressures for diversity and ensure that its clients are represented in homes. Houck explained that the company recently set up a Diversity Council that meets every few months to discuss new initiatives, including the creation of a scholarship program to help applicants from traditionally under-represented backgrounds to pay for the program. The program distributed $ 20,000 in two months. The company also hired someone to form partnerships with under-represented founding communities.
Launch House has raised funds at a time when many of its potential clients are rethinking the workday and the life they want. With new expansion plans, the startup has the opportunity to intentionally create a network that wouldn’t have existed in Silicon Valley before the pandemic – and will have ripple effects long afterward.