01 Advisors, founded by Dick Costolo and Adam Bain, just closed on $395M more | TechSwitch

You may think that if two former Twitter chieftains and a longtime C-suite Facebook exec agreed to construct a enterprise agency collectively, they’d chase after nascent social networks.
You’d be mistaken. 01 Advisors, an outfit based in 2018 by former Twitter CEO Dick Costolo and former Twitter COO and president Adam Bain, tells TechSwitch completely that it simply locked down $395 million in capital commitments for a 3rd fund based mostly on the traction the staff has loved by investing primarily in Series B-stage startups that promote enterprise software program and fintech providers. 
Some of their Most worthy stakes tie to Tipalti, a finance automation platform that was valued at $8.3 billion in the course of the heady days of 2021; SpotOn, which focuses on restaurant and small enterprise cost processing (valued at $3.6 billion final 12 months); HoneyBook, which helps small companies e book purchasers, handle initiatives and receives a commission (it was valued at $2.4 billion in 2021); and Linear, a venture administration platform that was reportedly valued at $400 million in September, when Accel led its latest spherical. 
Bringing on David Fischer — an 11-year veteran of Facebook who started as its VP of selling and left as its chief income officer — certainly helped the trouble, given his personal intensive community. Indeed, although Fischer joined 01 Advisors final 12 months as an working associate, he turns into its third normal associate with this new automobile, which brings the agency’s complete belongings below administration to $920 million.
More than two years after writing in regards to the outfit’s final fund, we talked with the three final week to study extra in regards to the new fund and what they’re constructing with their different colleagues; why Fischer didn’t begin a agency of his personal; and sure, what they consider the craziest social media story of the 12 months. We’re publishing our longer dialog by way of podcast later this week; within the meantime, excerpts from that chat comply with, edited evenly for size and readability.
You don’t take board seats. Why not?
DC: We don’t. Part of that was Bill Campbell-ism. When [the legendary business coach] was serving to us at Twitter, he had been requested to take the unbiased board seat and Campbell stated, ‘I don’t need to be on the board as a result of I need to know what’s occurring within the firm.’ There are only a bunch of instances the place you need somebody you’ll be able to speak to who’s not on the board however who possibly has a few of the similar stakes within the recreation and who you may as well bounce issues off. Like, ‘Hey, can you sit in an all-hands meeting and see if my message is resonating with the team?’ You don’t actually essentially desire a board member sitting at the back of the room on that.
David, how did you enter into the image?
DF: I’ve recognized Dick and Adam for a bunch of years. Dick and I overlapped again at Google extra years in the past than I care to confess or take into consideration and Adam and I had related roles and we had been in quite a lot of the identical locations and had quite a lot of the identical purchasers and should even have competed quite a lot of instances out within the enterprise world.
Did you consider launching your individual fund?
DF: It’s humorous you ask that. I used to be truly going by way of a technique of enthusiastic about doing precisely that. I truly stated to [Dick and Adam], sitting with them in the identical room they’re sitting in proper now in San Francisco, ‘Wow, this is exactly what I’ve been enthusiastic about.’ And to be sincere, I’ve all the time cherished being a part of a staff and being collaborative. I wasn’t so positive I actually wished to do it alone. I used to be making an attempt to determine it out and it simply form of clicked as I talked to them.
01 Advisors invested its first two funds — round $525 million — into fairly frothy markets by sheer dint of while you based the agency. Does that make you nervous?
AB: Our mannequin is a bit bit totally different in that we’re very concentrated with the businesses that we spend money on. In every fund, we again about 20 corporations. As a consequence, we’re very choosy, and after we do a deal, we’re fairly arms on in consequence. So I’d say we picked our photographs over the time interval that you simply talked about.
I’ll let you know issues have completely slowed down, particularly within the Series B land that we play in. This 12 months, we’ve solely added two new core positions within the fund. And truly final 12 months, we solely added two new core positions.
Have you bought any shares to secondary consumers to handle your threat?
DC: We haven’t bought any positions but. Obviously, we reserve the best to be opportunistic, however normally, after we make investments, we’re not investing to flip; we make investments as a result of we now have a very robust thesis on the founder and on the enterprise, and thus far, so good.
Given your respective backgrounds, I’ve to ask what you consider Elon Musk’s stewardship of Twitter, or X?
DC: I believe it’s fairly clear to everyone now that it’s a difficult firm to run with all kinds of recent challenges that even a seasoned government may not have been uncovered to beforehand. It has put us in a very good place to have the ability to assist every kind of corporations, although. Yesterday, a CEO known as us and stated, ‘Do you guys have any experience with crisis communications?’ and I began laughing.
DF: One of the opposite issues we’re studying is that the community results of the Twitter product are stronger than any decisions that [Musk’s] managers make. It’s principally like, you’ll be able to’t kill this product, its community results are so robust. It’s the proverbial cockroach and the nuclear explosion.
Do you suppose the world wants the “everything app” he’s making an attempt to construct?
DF: Some of that is only a timing recreation. I imply, Facebook’s Messenger product a bunch of years again tried to do an all-in-one technique. It didn’t work out. The one place it has labored has been China. That doesn’t imply it may possibly by no means work. I personally am a bit skeptical.
There’s quite a lot of actually thrilling stuff occurring in on-line commerce proper now and cell commerce, in addition to the intersection of enterprise messaging and commerce; these sorts of backgrounds are actually helpful and, by all means, credit score to anybody who’s going to take a shot at this stuff. But betting on the extra targeted method might be the place I’d come down personally anyway.
Above: A glance inside 01 Advisors’s workplace in San Francisco’s Jackson Square neighborhood.