ODX Fund Investment Memo

This is an inside look at the memo we used to raise our $100 million accelerator fund – also known as ODX. We believe it captures the essence of our mission: expanding the global startup economy. *

If you’re a community member, you can invest alongside the ODX Fund. Become an investor →

On Deck’s mission is to expand the global startup economy. We help people start and scale companies, get impactful jobs, and invest in their careers.

Since late 2019, On Deck fellows and alumni have founded 650+ companies—many after meeting co-founders, early customers and backers within our programs—and gone on to raise $800 million+ from the world's top investors.

We are now raising a $100M+ fund to put capital at the center of this thriving founder ecosystem, and kickstart ODX — a community backed accelerator that will help put thousands of new founders in business over coming years.

Three key ideas we hope you take away from this memo:

  1. The world needs more founders.
    • Founding/scaling a startup is the highest leverage tool an ambitious individual can wield to change the world.
    • Capital is abundant, opportunities to build are everywhere; Silicon Valley is a mindset, and talent is distributed around the world. But many talented people are still sitting on the sidelines — why? 
    • Unlocking individual potential is the key to unlocking the world's potential — this is On Deck's highest goal.
  2. The value of the On Deck network and community compounds every day.
    • With 8,000+ fellows across 20+ programs, every new person is a node in the startup ecosystem network that can benefit the next.
    • We strengthen the network by allowing community members to put "skin in the game" investing in and alongside ODX.
    • This network represents a clear pipeline of talented, imminently fundable founders, early hires, advisors, customers, investors, and more.
  3. The ODX fund and program structure allows us to have conviction and take bets on talent earlier and at an unprecedented scale.
  • ODX backs founders with $125,000 for 7% and supports them with access to the On Deck ecosystem to find co-founders, early hires, customers, advisors, and investors.
  • We have $100 million committed to the ODX fund today and are looking for the right strategic partners to close out the raise.
David Booth, CEO of On DeckErik Torenberg, Founder of On Deck
David, Erik, and the On Deck team

Why now?

FIRST

The world needs more founders.

Technology is one of the most important drivers of global economic growth—helping drive job creation and quality of life, and creating meaningful progress towards solving some of society's biggest problems—climate change, human longevity, developing vaccines, education, and communication infrastructure during the pandemic, and so much more.

We like to say that:

- humanity primarily progresses through technology; and

- great technology companies all start out as startups...

But for everyone starting a company today, there are hundreds more sitting on the sidelines. What's more: for every company already scaling, there are hundreds of employees who could be investing in their careers, getting leverage, getting ahead.

This sums up what we describe as a phenomenal waste of human potential.

And that inefficiency— is On Deck's opportunity.


SECOND

Silicon Valley is a mindset, and it lives on the internet.

Post-COVID, something that has been fundamentally true throughout economic history—the idea that where you work is where you live—is no longer the norm. A recent Andreessen Horowitz survey showed that up to 90% of startups will continue to hire remote employees and maintain distributed teams. Frankly, if you’re scaling a breakout company, distributed is just a better way to build.

Silicon Valley is famous for its high concentration of top technical talent and venture capital firms, but there’s also something else: the mindset. It’s not just the radical thinking and risk-taking that makes SV special. It’s the support for that kind of philosophy and behavior, the relentless ambition and curiosity, and the positive-sum mentality — all creating a culture of empowerment. Silicon Valley is where weird ideas are encouraged, where people are celebrated for taking big swings even when they fail, and where people pay it forward and share learnings with the next generation.

That mindset has now gone global.

Today you can learn skills, showcase your expertise, build a reputation, and forge key relationships from anywhere in the world—and the tools accelerating these trends will only continue to improve.

But if it's so easy, why is a lot of great talent still sitting on the sidelines? Why aren't more people building online? In a world where capital is abundant, the scarcity has shifted to talent and attention. Community is the new scarcity.


THIRD

As Stanford was to Silicon Valley; On Deck will be to the Internet.

In January 2021, the On Deck Series A Investor Memorandum laid out our vision for On Deck as a “modern education institution for the internet”— a digital "campus" where top technology talent and ambitious builders go to start or join a company, develop new skills, build relationships, and accelerate their careers among a cohort of their peers.

It made for a convenient metaphor — but we weren’t talking about just any old institution... we were building "Stanford for the internet."

In the history of Silicon Valley, Stanford University's most significant contribution was to make legible the ambition and talent of those who found their way to its campus. Competitive entry, proximity to inspiring role models, and a strong entrepreneurial cultural undercurrent reduced the cost of coordination such that talented people could find one another, ideas to work on, and capital to pursue their ambitions faster, and with more success than outside its walls.

With tens of thousands of applications per year across 20+ programs, On Deck has become a beacon for ambitious people on the internet, around the world... and we are just getting started.


FOURTH

Unlocking human potential — clearing the market for solutions.

We believe the following three statements are simultaneously true, but shouldn’t be:

  • There are trillions of dollars of value locked up in unsolved problems. People around the world need affordable housing, access to quality food, ROI-positive education and up-skilling to take on modern jobs, cheaper healthcare, and improved financial literacy. Companies need better R&D, leaner operations, more efficient customer acquisition, carbon-free energy and transportation options. New breakthroughs in any of these areas would unlock massive value for society.
  • Financing is cheaper than ever. 10 years of ZIRP and a global savings glut have left financial markets famished for yield. Titanic amounts of capital are begging to be unleashed on value-creating activities.
  • There is substantial “human capital” sitting on the sidelines. Talented builders, operators, scientists and more who aren't contributing their full potential to the world.

One way to try to frame this contradiction is as a "market failure."

In this market, there are three players:

  • Customers — people who have problems they’d pay to solve ("ideas")
  • Builders — people or organizations with the ability and willingness to solve problems ("talent")
  • Capital — money looking to make a return by financing Builders.

When this market clears—that is, when a Customer/Idea, a Builder, and some Capital get matched up—the output is a potential solution to a customer’s problem, in the form of a venture-scale company.

And therein-lies On Deck's highest level goal:

On Deck's goal is to accelerate the market for solutions — the rate at which customers, builders, and capital get matched up; increasing overall economic growth, and reducing wasted human potential.


Unlocking individual potential is the key to unlocking the world's potential.


There is no better time to put more people in business. Here's how ODX works.

HOW ODX WORKS

ODX will live right at the heart of the On Deck ecosystem.

Since 2016, On Deck has been building the best network for “on deck” talent to discover what, and with whom they want to build next.

In June 2019 we started inviting curated groups of high potential founders to join small, in-person "cohorts" in San Francisco and New York. Over the two years since, 2,300+ ODF fellows have started 650+ companies, and raised $800M+ from the world top investors including a16z (x6), Coatue (x3), First Round (x3), Founders Fund (x5), Kleiner Perkins (x3), General Catalyst (x5), and more.

Companies created by On Deck fellows over time

650+ companies

founded by On Deck fellows.

$800M+ raised

from top global investors

$5B+ combined value

Companies founded over two years
Hired employee #1, then raised $63M including a16z and YC Continuity.

On Deck helped us hire our first employee, raise $900k in pre-seed, and accelerate our GTM motion within the network. Our Series B wouldn’t have happened without On Deck.

Matt Schulman
Matt Schulman ODF3
ODF4
Founder and CEO
Found customers, recruited a team, and raised $21.5M.

On Deck helped me recruit our team, find our first beta customers, and build a community of support to get through the challenges of the founder to CEO transition.

Sasha Orloff
Sasha Orloff ODF8
ODF4
Founder and CEO
Co-founder met at On Deck, then raised $13.5M from Contrary Capital, Hustle Fund, Dash Fund.
Jessica Chen Riolfi
Jessica Chen Riolfi ODF6
ODF4
Co-Founder and CEO
Raised $51M from True Ventures and Village Global.
Viswa Colluru
Viswa Colluru ODF3
ODF4
Founder and CEO
Raised $38M from Khosla Ventures and First Round Capital.
Celine Halioua
Celine Halioua ODF2
ODF4
Founder & CEO
Co-founders met at On Deck, then raised $7M from Paradigm.
Alex Masmej
Alex Masmej ODF7
ODF4
Co-founder and CEO
Major VC firms investing in On Deck fellows

ODX is delivered in partnership with

Now, ODX builds on this momentum, filling the critical gap between "conviction to build" and seed round, and aligns the entire community's interests behind On Deck's success and the companies we help get started.

The On Deck "startups" journey exists on three "layers" — each a separate program, with deeply interconnected teams and resources:

  • ODF — explore what's next among a cohort of your peers, start a company or join a founding team.
  • ODX — your first check and a community to accelerate your startup to product-market fit.
  • ODS — scale yourself as a leader, build the machine.

Founder profiles for ODF/ODX admissions:

Experienced early founder

— Working on an idea, but knows that capital is commoditized, and community can be a true differentiator.

— Wants access to our co-founder search tools, talent networks, and the collective "hivemind" to accelerate idea validation, product discovery, and customer distribution.

— Expectations of On Deck: meet several early hires, connect with customers and investors.

Deeply experienced builder or technologist

— Has the skills and raw horsepower to build breakout companies, but doesn't yet have the "spark" for a specific idea to work on.

— A successful applicant may have spent their career working as an engineer, product manager, or as a researcher in a deeply technical field such as machine learning & AI or bio.

Driven operator or industry expert

They've been living a "friction point" for years while working inside of a given industry, and aspires to build a better way. A successful applicant may have years, or decades of experience in industries such as manufacturing and logistics, energy, finance, real estate, and more.

Foundations: ODF, Sector and Geographic networks.

Thousands apply to join On Deck founder and sector-focused programs every month: Health Tech, Climate, Fintech, Education Tech, Longevity, and more — with another four new programs slated to launch before the end of 2021.

Each program is an independent, highly curated cohort-based community focused on bringing together 100-120 leading operators, founders and builders, leading industry experts, academics and scientists.

The goal of each cohort is to assemble a "brain-trust", ultimately capable of identifying problems and possible solutions in their respective industries and spaces, supplying the collective network, and supporting the founders.

A unique community incentive model and participation right:

Historically, participants have paid a small participation fee—up to $2.5k to join a cohort of the On Deck Founder Fellowship (ODF).

Going forward, qualifying participants will instead have the exclusive right to:

  • invest into the fund directly (if accredited), or
  • earn exposure to upside from the fund's success (if unaccredited).

This "skin in the game" is a powerful alignment mechanism and engagement tool, and is one of the secrets of how we build thoughtful, respectful, engaged communities at On Deck. As a result, every community member puts capital at risk—and every community member shares in the success of the companies they help create.

"Show me the incentives and I will show you the outcome" - Charlie Munger


All participants planning to start a company as a result of their participation in the community will receive this right to invest and participate in the upside of the community—and be required to offer participation right for the ODX Fund as a result.

Fund Overview

Participation in the ODX program will come with a standard offer of $125,000 for 7% ownership.

Behind the scenes, this capital actually comes from a variety of different vehicles, depending on company sector, geography, and more.

  • Between $50,000-$100,000 from the ODX Accelerator Rolling Fund — including a guaranteed minimum allocation for our institutional LPs, and a significant commitment off the On Deck balance sheet. We are truly putting our money where our mouth is.
  • Between $10,000-$50,000 from the community funds, including:
    1). the On Deck Community fund — an "index" on the On Deck community, open for any community member to join;
    2). a special "On Deck Angels" fund with reduced management fees, available to participants in the ODA program who have already donated to the On Deck Access Fund;
    3). a special fund for On Deck employees and advisors, with reduced management fees and carried interest.
    4). Over time, the addition of special "thesis" funds that participate in every company that meets a specific thesis, including geographies (e.g. India, LatAm, Europe), and technology sectors (Climate, Health Tech, and more).
  • Up to $10,000 from anyone who refers a company and is involved in supporting them.

From the founder's point of view, all of these funds and investors roll up into one, easy $125k check — so they don't have to deal with any complexity while benefiting from the support of hundreds, soon to be thousands of backers from day one.

100% of fund economics — including carried interest and management fees across the family of On Deck funds is paid back to the On Deck "top-co" as revenue — helping drive growth and continued investment in our mission.

The Industrial Revolution S-Curve compared to the Internet S-Curve

Become an investor

Invest with a yearly or quarterly commitment.

YEARLY COMMITMENT

$5,000/quarter

Investors must commit to at least 4 quarters. Gain exposure to all deals the fund invests in for all 4 quarters.
  • Annual commitment
  • Exposure to all deals (~1000)
  • Only community members can invest
Request allocation
QUARTERLY COMMITMENT

$10,000/quarter

Investors have the ability to cancel their subscription after one, or any number of quarters.
  • Quarterly commitment
  • Exposure to quarterly deals
  • Only community members can invest
Request allocation

Are you non-accredited but want to invest? Let us know →

Rex Salisbury
Twitter logo

What if an MBA paid you...

Hari Raghavan
Twitter logo

Amazing velocity from a rockstar team. I feel privileged to just have courtside seats to how @david__booth @eriktorenberg @btaleisnik et al operate.

Anna Fuller
Twitter logo

Still the most value I’ve gotten from any founder community. ❤️

Congrats to the @beondeck team on this launch. 🎉

Bhaumik Patel
Twitter logo

If building On Deck was a course, ODX feels like their thesis / capstone project. Congrats to team on the launch!

Quinta Caylor
Twitter logo

You know when a group of individuals are truly invested in leveling the playing field for everyone.

Talk about ACCESS and OPPORTUNITY.

I just ❤ these people so much.

Ash
Twitter logo

Me telling my non-tech friends about ODX:

@beondeck is basically creating the Marvel cinematic universe for the startup world and after a 20+ release lead up just launched The Avengers.  

So yeah, it's a pretty massive deal 🤯 🚀

Ashley Tolbert
Twitter logo

Literal goosebumps for the future of On Deck! Congrats on the next chapter team @beondeck 🎉

Jon Hearty
Twitter logo

On Deck continues to take things to the next level.

ODF1 was a bunch of people in a room who all wanted to do something interesting.

That small seed has grown into a massive organism and the amount of success stories coming out of their programs is astonishing.

Anthony Geranio
Twitter logo

On Deck changed my life.

I am excited for their next chapter with ODX, and even more excited for the people's lives they will change next.

It's never been a better time to make the jump and start a company.

Lola Ojabowale
Twitter logo

woah @beondeck really is playing chess not checkers super smart move with the launch of ODX

* Memo has been lightly edited and redacted for public distribution.

Disclosures — please read before investing.


The performance of past deals is not a guarantee of future returns. Investing in venture capital funds is inherently risky and illiquid. It involves a high degree of risk and is suitable only for sophisticated and qualified investors.

On Deck and its affiliates does not provide investment advice to investors. The information on this page should not be relied upon as research, investment advice or a recommendation of any kind. Information on this page is qualified in its entirety by the fund’s Limited Partnership Agreement, Private Placement Memorandum and Subscription Agreement, which should be reviewed carefully prior to making an investment decision. Please see these documents for full details regarding risks, minimum investment, fees and expenses.

The fund lead and the fund’s investment advisor have the right to waive or charge additional carry to certain investors. The fund’s legal name may be different than the name used above.This fund may accept new investors after the fund undergoes a valuation update. Certain potential investors in the fund may then have access to materially different information concerning fund value at the time of their investment.

Current or future portfolio companies in this fund may use On Deck’s hiring platform or subscribe to its carers platform, and may pay for access to these tools and services. This may create a potential conflict of interest, which you will consent to by subscribing in the fund.

On Deck's community funds are managed on AngelList. Please read in full the AngelList disclosures listed
here.