How HyperGuap was started and invested $10M into Carta
Here is my reflection on how the HyperGuap VC syndicate was started and landed it’s first deal into Carta.
My goal is to share my own subjective experience and to document my journey.
This piece is meant to focus on the personal relationships rather than the financials in the hopes that this transparency may be helpful to others.
I will plan to cover all HyperGuap deals in various ways going forward.
HyperGuap Introduction
As the pandemic felt like it began to wane in the Fall of 2020, I started to hang with my friend Gali that I met during my time living in New York City. Gali also goes by Gfilche.
While we met in NYC, we were both originally from Seattle. Thus we found ourselves both bunkering down in Seattle for a bit during some of the pandemic.
During that time, I got to know one of Gfilche’s closest friends from growing up, Julian. Julian also goes by Jfilche.
This was the first time I had opportunity to meet up with Gfilche and Jfilche in person since the pandemic began. We finally reflected on how awesome it was that we invested in SpaceX a few months prior.
Jfilche, myself, and a few others invested in the first SPV that Gali put together called SpaceFilche which invested into another entity that owned SpaceX shares. An SPV is short for a Special Purpose Vehicle which is essentially an LLC with the sole purpose to pool money together to make an investment. More on that in my article, How I invested into SpaceX.
As we hung out and schemed over the course of several days during the Fall of 2020, Gali started to float the idea of starting a VC syndicate to do more SPVs like the SpaceX one we invested in all together. He wanted to find a way to share these rare private company investment opportunities with accredited investors from his HyperChange community.
HyperChange is Gali’s YouTube channel that has 150K+ subscribers. His channel covers investing with a focus on Tesla, SpaceX, Crypto, and the world’s most innovative emerging companies.
Gali’s channel grew substantially when he went on the Tesla earnings call in 2018 and spoke with Elon Musk for 20 minutes. Here’s a piece from CNBC about how Tesla’s Elon Musk took questions from owner of a YouTube channel.
Since Gali’s following is mainly Tesla, SpaceX, and Elon Musk fans; after Gali mentioned he invested in SpaceX on HyperChange, all of his followers wanted to invest alongside him. They were able to do this with Tesla since it is a public company, but SpaceX is an elite private company and very hard to get access to invest in. Gali was also making other angel investments into private companies, and his following expressed interest to invest in those as well.
This was when Gali recognized that there was clearly a need in the market for him to facilitate private company investment opportunities for his community.
Gali decided to name his new VC syndicate HyperGuap.
For those that don’t know, Guap is slang for money. I was a bit taken back at the absurdity of using Guap in the fund name.
But I asked Jfilche about the name, and to paraphrase what he said,
What Gali does seems to be working so you got to believe this will too.
Then, I asked Gali about his rationale for the name.
What Gali responded with set the tone for what HyperGuap was about to do.
HyperGuap will disrupt the VC industry, starting with our name.
So far, he hasn’t been wrong…
Gali dropped a video announcing HyperGuap to the HyperChange community.
Since releasing that video, HyperGuap has gone on to invest $17.5M into 6 private startups with 800+ syndicate members.
I guess what I am saying is… what Gali does seems to be working and this disruptive new name did too.
HyperGuap’s First Investment into Carta
Jfilche does growth at a company called Carta which is a $7B+ startup out of San Francisco that manages private company equity for companies, employees, and investors.
Jfilche has been climbing the ranks at Carta and was able to connect Gali with the CEO of Carta, Henry Ward, for a conversation.
Gali and Henry immediately hit it off.
The next thing I know, Gali said that Carta was HyperGuap’s first investment opportunity. It’s awesome to see childhood friends making power moves like this.
The interesting part about the investment was that it was not a typical venture investment.
A typical venture investment happens when a private company issues new shares. This was different because Carta wasn’t issuing new shares in their company which would allow Carta to avoid diluting any of their existing holders.
In order to achieve this, Carta allowed those with existing shares in their company the opportunity to sell some of their shares to new investors.
The reason why Carta did this was because the company was founded in 2012. Early employees and investors who helped get the company to where it is today hadn’t been able to sell any of their equity that they earned over that time because Carta is still a private company.
Realizing this problem in the marketplace, Carta saw a solution.
Carta had the brilliant idea to launch a new private company stock exchange called CartaX to provide liquidity.
This new market, CartaX, would achieve three things:
Give early employees and investors a chance to sell some of their shares in Carta and make money.
Not issue any new shares that would then dilute Carta shareholders who didn’t want to sell their shares.
Allow new investors to buy into Carta.
Carta was the first company ever to conduct a transaction on CartaX.
HyperGuap was able to participate in this transaction by using Carta to set-up its SPV. Gali called this SPV HyperGuapXCarta.
To summarize what happened: HyperGuap created an SPV on Carta to invest in Carta on CartaX. This sounds extremely meta because it is.
HyperGuap raised capital from 70+ members of the HyperGuap community and bought $10M of shares in Carta in February 2021. I am proud to be one of the HyperGuap members that contributed to this investment and apart of this historic event on the CartaX platform.
I believe this first HyperGuap investment, and this first CartaX transaction, symbolizes a new era in the private markets.
In the future, I will write about why Carta is such a unique company and what makes me bullish on them.
I will also write about how I later got involved with HyperGuap and began to work directly with Gali.
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In the meantime, below are some links if you want to learn more about HyperGuap and Carta.
Here’s a video from HyperChange on the HyperGuap investment into Carta.
Here’s a video from HyperChange on Carta Eating Wall St.
Here’s a short blog from Marc Andreessen at a16z on the historic event of CartaX.
Here’s a link to Gali announcing HyperGuap.
If you have any questions or thoughts, please put it in the comments below.
This was fascinating and very interesting! Def interested to see how Hyperguap continues to grow!