The Hustle

Turner Novak is monetizing memes with venture capital

Banana Capital is an early-stage VC firm managing ~$10m. A key part of the fund's investing strategy: creating memes to get mindshare and win over both founders and other investors.


April 29, 2021

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If you’ve been anywhere near tech Twitter over the past year, you’ve seen a viral tweet from Turner Novak. 

The 30-year old investor pumps out investment memes and conjures up hysterical parodies of tech founding stories (seriously, read these and try not to laugh).

“Founding stories” for Stripe and Google (Source: Twitter / @TurnerNovak)

Don’t let the jokes fool you, though. 

It’s a very deliberate approach with an end goal in mind.

“I use content as a way to build relationships with founders and other investors,” Novak tells The Hustle.

And “content” doesn’t just mean Twitter memes. Novak is well known in the tech community for his long-form analysis of consumer tech companies including TikTok, Pinduoduo and Snap.

Praise from Stripe CEO Patrick Collison and investor Patrick O’Shaughnessy (Source: Twitter)

Think of Novak’s approach as an acquisition funnel, with memes casting a wide net to draw a large audience from the tech community. 

(If you need a case study as to whether this works, remember that Elon Musk — the world’s 2nd richest person — fills about half his Twitter timeline with memes). 

“Memes get shared 7x more than non-meme content,” Novak says, citing data from an Instagram-led study. “When I started tweeting a few years ago, it was more serious analysis. But the engagement and sharing really took off when I tweeted memes.”

In some instances, he will combine a meme-y format with real analysis. One popular example is when Novak typed up his bull case for online retailer Stitch Fix:

“The analysis I did was very serious,” says Novak. “But the format itself also became a meme, with tons of other tech Twitter accounts making similar arguments for other companies, whether seriously (Clubhouse) or not (Blockbuster).”

Examples of other Twitter accounts running with the “likely a $100B company in 10yrs” meme

In a word: mindshare. 

And, ever on the forefront of consumer tech, Novak has carved out a reputation as the “TikTok VC guy” (billionaire investor Chamath Palihapitiya and Shopify CEO Tobi Lutke are fans). 

Most recently, Novak was wielding his meme-vesting skills as a general partner at Gelt VC — where he invested their second fund. 

Now, Novak is taking his talents to Banana Capital, a $9.999m early stage fund with an accomplished list of limited partner (LP) investors:

Most importantly, the fund’s name is a 4d chess move to own the 🍌 emoji (you can read his launch blog here). 

What does all of this mean for tech Twitter?

More memes and longform content.

But, to be sure, we spoke with Novak to find out the game plan:

***

Turner, first question and asking for a friend: will the memes keep coming with Banana Capital? 

Yes. 

Perfect. 

My thesis for focusing on memes — and just from my own experience — is that founders and other investors want to work with people they enjoy being around. 

People engage most with my jokes and memes, and it helps me develop relationships. 

At the end of the day, it’s a different form of marketing and I like to think of it as monetizing memes with venture capital. 

You’re based in Michigan, right? That’s a pretty untraditional VC location. 

Yes, I was born in Winnipeg, Manitoba but moved to Grand Rapids, Michigan when I was 9. I grew up with a single mom and spent a lot of time on the internet growing up.

I attended Grand Valley State University to study accounting, which I almost failed out of. I discovered the investment club on campus, and was amazed that you could have a full-time job investing in companies. It felt like playing a video game. 

That’s where I got my start. 

Did the investing club lead to your first job? 

I spent 2 years as the investing club’s president and used it to land a corporate finance and a private equity (PE) internship in Michigan. I always thought I would move away after graduation, but my girlfriend (and, now, wife) had a job lined up in Michigan, so we decided to stay. 

My first job was as a credit analyst for a Michigan bank and then I moved to a $1.6B endowment fund. 

I learned a lot from the jobs but knew I wanted to make the jump into investing in internet businesses. 

Then, I read an article from Blake Robbins. He’s an investor at Ludlow Ventures and wrote about how he became a VC at 22, based in Detroit. I didn’t know it was even possible to be a VC in Michigan, and started figuring out a plan to make it happen. 

Blake and I are friends now and catch up about once a month. 

How did you score your first venture job? 

I knew I could be a VC in Michigan but there was a problem: I didn’t know anyone in tech, had no relevant experience, and I had no track record. There was no reason to hire me.

To get noticed, I started writing on the investing website Seeking Alpha, which I had used to make beer money in college. The first company I really covered was Snap. 

This was right after its IPO and people thought their app was failing because Facebook copied its Stories feature.

My bosses at the endowment found out after CNBC reached out to my employer, and we decided I had to stop. 

Did you? 

I did. 

But then I tried another approach. I started using Twitter to share my thoughts about tech and investing and experimented with different content. 

At first, my tweets were all very serious. Like a 50-tweet thread on Snap’s new redesign. I also started writing something called “Fantasy VC”: like how people pick players for a fantasy football team, but I was doing it with startups. 

One of my fantasy portfolios caught the eye of a founder who said “this is the best analysis of my company I’ve ever seen”. After he re-tweeted the piece, I started getting inbound interest from funds. 

And, this is how you got a gig with Afore VC? 

It was a long process, but yes. They are based in San Francisco and I considered moving there. 

But the opportunity was just an internship. Well, an internship where I still worked full-time. 

My wife and I had our first daughter and it would have been very expensive for us to move out West without any income coming in. So we sold our house and the rental property we owned to get some runway and rented a house right next to my in-laws.

From Afore, that’s where I met the team at Gelt in the fall of 2019. Their business is primarily in real estate investing but they raised a small venture fund and I joined them as a partner. 

When did the memes start? 

I first started making memes anonymously for meme and parody accounts. 

I would chat with them and swap ideas. Then the memes I pitched or made really went viral. 

After seeing that, I figured I should just do it from my account. 

I started meme-ing more in 2020, and in the past year and a half I’ve met so many new founders and investors. Twitter has been a huge part of that. 

Have any of the memes gotten you in trouble? 

Honestly, not everyone gets the jokes. Some VCs have definitely taken offense to my tweets, but you can’t please everyone.

It’s fine, though. I get so many texts from founders and investors talking about how I made them crack up or a meme I made was shared within their own group chats.

Like you said, it’s a form of marketing. 

Yes. The perfect example is Elon. He’s a memelord, he seems to be doing fine.

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