In 2020, Terri Burns made history by becoming the first Black female partner and the youngest-ever partner at GV (formerly Google Ventures) at the age of 26. She has now launched her own firm to address one of the most common flaws in venture capital. Burns intends to circumvent the industry norm by investing first in obscure companies.
“A lot of investors are driven by heat, versus being driven by true innovation. It leads to “poor experiences for founders, who have this ‘chicken or egg’ fundraising problem. They’re talking to amazing investors, they’re getting some interest, but no one’s really willing to take the leap to anchor a deal unless they see that other people are involved. But if everyone [holds out], that creates a really challenging dynamic,” Burns told Fortune.
While at GV, Burns noticed the phenomenon known as “heat” where investors wait for signals from others before making an investment decision. This can lead to poor experiences for founders as they encounter challenges in securing funding without the support of multiple investors. Type Capital therefore plans to move quickly and invest first in companies at the pre-seed and seed stage. Burns’ focus is on digital consumer companies, tools for developers, and AI, especially from Gen Z founders.
Burns is in the process of hiring a team and searching for undiscovered founders to support in securing follow-on investments. She is emphatic about the importance of being the first investor to take a risk and build alongside founders. By avoiding the reliance on “heat” in investment decisions, Burns believes that Type Capital can win and earn respect from founders. This approach is geared to eliminate the over-dependence on market trends and focus on genuine innovation.
“I want to move quickly and move efficiently and not over-index on heat. Not being super caught up in this ecosystem of heat that is really popular right now is the path to winning and also the path to more collaboration and respect from founders,” Burns explained the rationale behind her investment strategy.
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GV hired Burns for her distinct perspective and insight into young founders. She led the firm’s investment in Partiful, an event-planning platform popular with Gen Z which went on to raise more than $20 million from investors. Although she successfully closed the deal, it was slower than Burns would have liked and helped form her “heat” thesis. She played a pivotal role in many of the firm’s successful investments such as the social app HAGS, which was later acquired by Snapchat. Her tenure at GV solidified her position as an astute consumer tastemaker.
Burns is an angel investor and co-founder of an angel investment collective that has invested in at least 11 companies, including Clubhouse. She started her career at Twitter as an associate product manager before becoming a Kauffman Fellow and studying computer science at New York University. In 2021, Burns became the youngest member of the university’s board of trustees.