Wave Capital Pivots From ‘Airbnb Mafia’ to ‘Unicorn Mafia’

It’s been one year since Wave Capital, dubbed the “Airbnb Mafia” fund by multiple outlets, closed its first $55 million fund. Yet out of their five investments, only one of their portfolio companies has been a part of Airbnb’s alum pool.

“Our networks in Airbnb in 2017 are not going to be relevant in 2037,” said David Rosenthal, a general partner at Wave Capital. As a result, the fund does not want to limit itself to Airbnb for investment opportunities.

Rosenthal is joined by Airbnb desk buddies Sara Adler, previous head of corporate development at Airbnb, and Riley Newman, one of the home rental company’s first 10 employees and previous head of data science. Rosenthal himself hailed from Madrona Venture Group and Meritech Capital.

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Adler says that keeping their eyes on all of the entrepreneurs coming out of top companies (which she deems as the “A+ mafia”) is a broader, more accurate focus. And in some cases, Wave Capital’s partners will work with founders before they’ve even chosen what issue to solve.

For example, Henrik Berggren, who worked with Adler at Dropbox, quit his job at Dropbox and was approached by Wave. The team helped Berggren brainstorm ideas—swatting away a heat pump concept—before they got to Steady Health, a modern clinic for diabetes.

“They wanted to invest and invest deep in the business, and that means our incentives and their incentives are pretty close when it comes to succeeding,” Berggren said.

Berggren also noted that knowing the people that are investing in you from a previous life is key, and preferred, for founders.

Wave’s only Airbnb alum-based investment so far is Alma, a marketplace for donations and charity-giving. The company was started by Dan Hill, previously the director of product and performance marketing at Airbnb, and Michelle Rittenhouse, who was once a product manager at Airbnb.

The duo knew Adler and Newman from their time at Airbnb, and consulted them while building out Alma. But, as Hill put it, they wanted more guidance and a stronger relationship. He says Wave’s willingness to take a risk on an early-stage startup was special.

“Before we had a product, they were willing to get on board with the team, the ideas and the space and what we were planning to do,” Hill said during a phone call.

For now, Rosenthal says that they have to focus on architecting the firm to be around for a decade, especially in a world crowded with seed funds. And that means not limiting themselves to a small pool.

“Everyday that goes on is more time that I’ve been away from Airbnb,” said Adler. “It’s not like we’re going to forevermore know all the employees of the company.”

Instead, she is looking into the mafias being born out of unicorns and IPO-ready companies, and Wave Capital’s portfolio is bearing that out. Outside of Airbnb, Wave has invested in companies with founders who were employed at Dropbox, Uber, and DoorDash, with more likely to come.

Illustration: Li-Anne Dias

Note: A previous version of this article mistakenly included a typo. David Rosenthal said “Our networks in 2017” not “2007.” It has been corrected.

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