At Max Altman’s Saga Ventures, An Unlikely Trio Invests Outside The Silicon Valley Hype

Forbes

Altman, a Zenefits alum and former investor with brothers Sam and Jack, teamed up with Flexport exec Ben Braverman and two-time founder Thomson Nguyen to raise $125 million to back companies building for non-techie customers.  Read the full story on Forbes: https://www.forbes.com/sites/alexkonrad/2024/05/06/saga-ventures-raises-125-million-to-invest-outside-silicon-valley-hype/?sh=6b94d0d667d8  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00 Here's your Forbes Daily Briefing for Sunday, May 12.

00:05 Today on Forbes…

00:07 At Max Altman's Saga Ventures, an unlikely trio raises $125 million to invest outside

00:13 Silicon Valley hype.

00:17 Investors Thomson Nguyen and Ben Braverman were interviewing with big venture capital

00:22 firms about potential roles last September when they met in San Francisco to discuss

00:26 a different option, teaming up with Max Altman.

00:31 Younger brother to Sam Altman, the CEO of OpenAI, along with Jack Altman, the former

00:36 CEO of Lattice, Max had spent nearly a decade investing alongside them through funds Hydrazine

00:42 Capital, Apollo Projects, and Altman Capital.

00:45 But he'd left San Francisco for Austin, Texas, in part to get some breathing room

00:50 from the family name, and now he wanted to branch out with a new firm.

00:54 Braverman, the former chief revenue officer at logistics unicorn Flexport, and Nguyen,

01:00 an entrepreneur who'd recently sold his second startup, had both made smaller investments

01:04 through Flexport and the Y Combinator network.

01:08 With Altman, they'd get to be co-founders, while still leveling up their dealmaking and

01:12 check sizes.

01:14 The result is Saga Ventures, a $125 million fund focused on early-stage software startups

01:20 led by Altman, Braverman, and Nguyen as general partners.

01:24 The partners told Forbes that Saga plans to invest around $2-2.5 million across 30 companies

01:30 with the fund, leading or co-leading early-stage rounds.

01:35 Saga's strategy isn't reinventing the wheel.

01:38 The partners plan to invest in classic software-as-a-service startups in categories like work software

01:43 and fintech, building off combined past investments such as manufacturing startup Hadrian, finance

01:49 software maker Ramp, and space-based drug developer Varda.

01:53 AI, unsurprisingly, is another area of interest.

01:57 But where Saga hopes to approach venture a bit differently is to focus on applications

02:02 for people outside the tech set.

02:05 Altman told Forbes, "The low-hanging fruit today is using technology, which today is

02:10 AI, and applying it to really hard problems that are going to affect every American.

02:15 You have to build a tool that someone in Houston or Minneapolis is going to be able to use."

02:21 After interning as a Duke undergraduate for Steve Anderson, the former Midas List investor,

02:26 Altman was hired as one of the first product managers at Zenefits.

02:30 While at the human resources software startup, Altman was known for arguing that tech companies

02:34 shouldn't build products just for other tech companies, according to former CEO Parker

02:39 Conrad.

02:40 Conrad said, "He was always pushing the position that you need to build for businesses

02:45 across the country."

02:48 That approach took more of a backseat for a time, however, at Hydrazine Capital, where

02:52 Altman joined older brother Sam to help manage his expanding venture fund.

02:57 They would back a number of early Y Combinator companies, including social media site Reddit

03:02 and smart email service Superhuman, as well as Conrad's next venture, Rippling, where

03:07 Max Altman briefly took a job.

03:10 Those funds are a big reason that Forbes called Sam Altman a billionaire earlier this year.

03:15 As the older Altman spent more time on OpenAI, Max Altman increasingly managed its day-to-day

03:20 operations, an arrangement they continued with Apollo Projects, another family affair

03:25 that looped in Jack Altman.

03:27 Apollo Projects was supposed to focus on moonshots and deep tech bets, they told Forbes in 2020,

03:33 but it soon expanded into more traditional software companies, in part because of the

03:37 high-cost, long-horizon nature of such ventures.

03:41 With OpenAI's growth pushing Sam Altman to minimal involvement, Jack Altman and Max

03:45 Altman next launched Altman Capital, a fund with outside capital that was often mistaken

03:50 for a family office.

03:52 Eventually, working full-time as brothers was proving more baggage than fun.

03:57 Altman's alternate path began in 2021, when he stayed at a house in New York during the

04:02 pandemic with some other tech sector folks, including Braverman, and the two became friends.

04:08 At a separate tech confab in Hawaii, Altman befriended Nguyen, who sold fintech startup

04:13 Nearside to Plastique in 2022, and was a prolific angel investor within the Y Combinator community.

04:20 When the possibility of working together as a trio emerged, the three investors decided

04:24 they had the rapport and the complementary skill sets and networks for a lasting fund.

04:30 Nguyen plans to remain in San Francisco, Altman in Austin, and Braverman in New York.

04:35 After spending the fall discussing their options, they decided that a relatively smaller fund

04:39 with a concentrated investment portfolio would give the best chance for success.

04:45 For full coverage, check out Alex Conrad's piece on Forbes.com.

04:50 This is Kieran Meadows from Forbes.

04:53 Thanks for tuning in.

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