Here’s our interview with Ben Lee …
What is the company about? And, why now?
Ixora is a venture capital firm committed to economic inclusion and taking on a socially innovative approach to investments. A lot of people have the impression that venture capital, and capitalism in general, is based on fast flips and quick returns at any cost. I feel it is time that we show people that finance and investments can be done differently.
At Ixora, we have a unique approach – we don’t manage capital on behalf of institutions, but rather, maintain a global network of over 3,000 family offices. Many of these family offices are outside the conventional VC deal ecosystem. My personal experience has shown me that there is for finance to be democratized.
Moreover, we seek to invest in founders and companies that believe in economic inclusion and social justice. This is a growing, but often untapped, a pool of investors outside of conventional channels. They are people who want to make a genuine difference with their money; they deserve opportunities to do so.
Why did you recently acquire IXI Collective?
We acquired IXI Collective, an LA-based investor community network, to broaden our lifestyle offerings to our circle of investors, as well as to create cross-border synergies between groups of investors that have different cultural backgrounds. The broader IXI community, comprised of over 1,000 accredited investors and family offices, stays connected via its private app, as well as through events and social impact initiatives within a network bound together through shared business and lifestyle interests.
Now that IXI has become part of the Ixora family, the newly-created Ixora Collective will help level the playing field for investors and founders with a constant influx of diverse ideas and capital. This exposes investors to more diverse, impact-driven financial opportunities that are meaningful and also profitable.
Specifically, the Ixora Collective aims to continue to bridge the gap between the US and Chinese investors. With the recent and ongoing tensions between the US and China, it is more crucial now than ever to facilitate conversations between the world’s two largest economies, towards a common purpose for the benefit of humanity. I spent parts of my formative, growing up years in both the US and China, so this is very important to me.
What are you trying to solve? Who else is solving the problem?
We believe that venture capital, and finance in general, needs to evolve. Currently, large institutional investors are cornering the best deals. More capital than ever is being invested in the ecosystem, but most of that money is going into a select number of mega-unicorns. We believe that finance needs to be democratized. As such, one of our core focuses within our venture fund is to make long-term investments in founder-driven companies (as opposed to VC-driven companies) that are trying to solve large problems. I believe some angel investors are already taking this approach and are also investing with an eye toward diversity and inclusion.
Do you have a specific industry or geographic focus for your investments?
We invest globally but are especially bullish about the United States. We believe in the creative and productive potential of the American people, and we have seen throughout history that grit, resilience, and hustle are indelible aspects of the American cultural identity. We have three funds: the IXORA Venture Fund, the IXORA Special Situations Fund, and the IXORA Fixed Income Fund, which focuses exclusively on private debt. Our main focus is making sure that we are investing in projects that are founder-driven, and that offer radical, scalable solutions within the field of economic and financial inclusion.
What do you want (hope) to happen?
We want to see greater awareness about and adoption of impact-driven investments. Venture capital, and finance in general, can be a powerful tool that acts as a force multiplier to enable newly-established startups to punch above their weight. This can be leveraged in many ways, including to deliver socially beneficial outcomes – such as greater economic inclusion.
What is an Investment you’re excited about right now and why?
We just invested in Aspiration’s Series C Round. Aspiration is a socially-conscious bank founded by Joe Sanberg, a founder I have tremendous respect and admiration for. He is a leading advocate for poverty elimination and has campaigned vigorously for the Earned Income Tax Credit (EITC) for low-income families. The company is already a unicorn, and we believe that it has the potential to go even further – and become one of the most consequential financial firms in the US over the next few decades.
How does it exemplify your investment strategy?
Aspiration is definitely not “business as usual” in the startup space. It’s primarily a socially-conscious platform that begins with banking. It is a founder-centered company, as opposed to a venture capital-centered company, with a substantial amount of its funding coming from Joe Sanberg himself. As a company, Aspiration has a double bottom line – it measures its success by not just its financial performance, but also, on its social impact performance. I have seen first hand how Aspiration has compelled large corporations to change their behavior for the better. This is fully aligned with IXORA’s core values.
What makes LA a strategic location for Ixora?
Los Angeles has become a hotbed for innovation in recent years, and now has an extremely high concentration of entrepreneurial talent. Moreover, Los Angeles has always been a city with imagination. People from all over the country, and indeed the world, flock to LA in pursuit of their dreams and ideals – often with nothing more than a wing and a prayer. We believe this is the perfect cultural DNA for entrepreneurship and innovation.
What is one of your greatest beliefs about how investments can affect society and how do you raise your fund and invest in portfolio companies to align with those values?
Capital (and especially venture capital), put simply, is a cheat code. Obtaining external funding allows a company to punch above its weight, in pursuit of growth, and scale, even while making losses. This can be either good or bad; capital and finance in and of themselves are merely tools, in the same way, that a knife is a tool. If you gave a knife to Jack the Ripper, the outcome would probably be very bad. But if you gave a knife to Jamie Oliver (or to LA’s own Jordan Kahn, who is awesome), the outcome would probably be very good.
We definitely see a lack of diversity in the venture capital space that results in skewed investment decisions. There is a severe under-representation of minorities. For example, we see this in the percentage of funding allocated to women-led companies, which fell in 2018 to a mere 2.3% of the total of $140 billion (Fortune, 2019). When capital is concentrated in the hands of a select few, and when these entities steer the direction of multi-trillion-dollar industries, the outcome is that monopolistic, large corporations are able to behave in a manner that seeks to privatize all of the benefits while socializing the costs. This is why we have a climate crisis, and an opioid crisis, and why our economic inequality is getting worse.
At the end of the day, there is no shortage of problems to solve. But we work with intent, we try to get the balance right between idealism and pragmatism, in order to make sure that our investments move the needle in terms of creating a more economically inclusive world.
How many investments do you make per year, and what is your typical investment size?
In the past 60 days, we have made 4 investments and plan to make 2 more within the next 30 days. Investment sizes range from $200,000 to $23 million.
Also, check out these 21 Most Active Early-Stage Investors in Los Angeles