Li Jin launches Atelier Ventures, her debut fund to invest in the passion economy
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In 2019, while still working at a16z, Li Jin wrote a provocative essay titled “The Passion Economy and the Future of Work.” In it, she defined and highlighted an emerging trend she called the “passion economy” wherein people “build audiences at scale and turn their passions into livelihoods.” Her claim was that new digital platforms and marketplaces will have a profound impact in enabling people to connect to consumers and monetize their skills and interests, and would in turn open up entirely new types of jobs in the future. I, along with a growing contingent of people, am living proof of this trend coming to fruition.
The first sentence in her 2019 essay included what, at the time, was a shocking stat:
The top-earning writer on the paid newsletter platform Substack earns more than $500,000 a year from reader subscriptions.
Just over one and a half years in, I now earn more than this with my humble newsletter. I didn’t realize it at the time, but Li predicted and paved the way for my new career.
Over the past year, I’ve been fortunate to get to work with Li on a number of projects, and when I learned she was raising a fund focused on the passion economy, I asked her how I could help. Realizing that I’m living proof of her thesis, we thought there was no better place for her to announce her new fund. So here we are!
I’m excited to announce Li Jin’s debut fund: Atelier Ventures, a $13 million fund to support the passion economy.
Atelier is focused on companies that support a “human-centered vision of the future of work,” says Li, including platforms that broaden access to new forms of work, lower the barriers to entrepreneurship, and democratize the means of production and distribution. Typical check sizes will range from $100,000 to $300,000. Although the fund is just being announced, Li has already made several investments, including in Substack, Stir, Geneva, Streamloots, Descript, and Dumpling.
With Atelier, Li joins a rarified group of female fund managers who have set up their own firms, and an even smaller cohort of fund managers who have launched new funds entirely during COVID, all over Zoom.
Oversubscribed beyond her initial target of $10 million, her LPs include Andrew Chen and Alex Rampell from Andreessen Horowitz; Adam D’Angelo (Quora); Automattic; Jack Conte and Sam Yam (Patreon); author Adam Davidson; Parcast founder Max Cutler; Hunter Walk (Homebrew); David Sacks (Craft Ventures); Om Malik (True Ventures); Gina Bianchini (Mighty Networks); Kevin Lin (Twitch); Eugene Wei; multiple a16z portfolio company founders; and a number of venture funds including Bain Capital Ventures and Draper Esprit.
It’s clear what Atelier’s differentiation is, even in a crowded venture capital landscape. Li is now widely considered to be the godmother of the passion economy, with incisive writing and thinking that sway the strategies of all sorts of businesses, from startups to public companies. She has been credited with the current fervor around the creator economy and reviving interest in consumer social. With a solo GP fund, she is also now living her own thesis that power is shifting from institutions to individuals.
Beyond just talking and writing about the passion economy, she is also an active participant in it, with creative side projects including a podcast; newsletters (free and paid); founder community; Side Hustle Stack, a resource for finding flexible work; and an upcoming cohort-based course about the creator economy. These projects and the fund are mutually reinforcing, aiding her companies to sharpen their strategies, leverage new distribution channels, and get in front of creators and users.
I sat down (virtually) with Li to learn about her plans for the fund, her latest thinking around the passion economy, and what it’s like to raise a fund completely over Zoom. I hope you enjoy this conversation as much as I did.
Interview with Li Jin, founder of Atelier Ventures
What’s the story behind the name “Atelier”?
“Atelier” is French for an artist’s studio or workshop. I was deliberate in choosing a name that reflected my background as an artist (li-jin.co/art) and that also felt more feminine and distinct from most VC names. An atelier is where artists create, and I wanted to honor the creative process that founders go through when taking something that had previously only existed in their imaginations and translating it to reality.
Why start a fund? Aren’t there enough seed funds out there?
There are indeed a lot of seed funds out there! But I did an experiment last year (pre-covid): I went to Stanford’s campus and polled students on, if they were starting a company today, which venture firm would they want to raise from? Surprisingly, most students couldn’t name any early-stage funds. That tells me that despite the proliferation of new funds, there’s an opportunity to build a firm that rises to the top of founders’ minds when they think of starting a company in a particular category, and that has a clear mission and worldview.
My fund’s raison d’etre is to rebuild the middle class and create more opportunities for earning money, in ways that are non-exploitative and give people a path to upward mobility.
I elaborated on these ideas in a December essay in Harvard Business Review. Why do we build and invest in technology? Technology platforms result in productivity growth and value creation, but it’s up to all of us (societally, and as investors and builders) to determine how that value is distributed to its members. Through this fund, I want to pull the world in a more egalitarian direction. That’s accomplished by supporting platforms that empower the long-tail of creators; showcase talent, knowledge, and skill (however niche they may be); and give consumers more accessible services and products. This isn’t just an investing thesis; this is my life’s mission and is desperately what I want to see in this world.
I also plan to do things differently! I’m compiling a database of creators — including YouTube and TikTok creators — who are interested in working with startups, either for content partnerships or angel investing. Something I’d also like to do in the future is to incubate startups in the passion economy, where Atelier will co-found businesses with founders in various areas of opportunity. Lots of talented founders come to me to validate ideas — I’d love to provide more hands-on help throughout the process.
“I couldn’t imagine building Stir without having Li on the team. She isn’t just an investor—she lives and breathes the creator space through her own actions, giving her a level of insight and empathy that is unparalleled. Founders who are building in this space should take every effort to have her on their side.”
— Joe Albanese, CEO of Stir
You raised your fund entirely during COVID. What was that like?
It was not easy — I’m not going to sugarcoat it. I left my last job at a16z in May and fundraised during the height of COVID. There was still a chill in the market, and many VCs and mentors told me that it would be next to impossible to fundraise for a new fund. I got a lot of “no’s” and “We’d love to support you, but we’re conserving liquidity because of COVID.”
But due to some combination of naivete, self-confidence, or insanity, I just kept going. I just believed so damn much in the passion economy and that the world needed this firm to exist to push forward an entirely new economic movement.
I’m grateful that I started the fund when I did — it gave me so much founder empathy for what they have to go through to get something off the ground, especially when the odds are stacked against them. Many of my LPs were folks who gave me a chance without ever meeting me in person, and I’m eternally grateful for that.
“As a player in the passion economy, we have a secret weapon: a ‘teammate’ with exposure to everything happening, the intelligence to turn it into insights, and the authenticity to influence and guide others. That secret weapon is Li.”
— Dan Liu, CEO of Luma
Back in 2019, you first coined the term “passion economy,” and now, there are hundreds (maybe thousands?) of companies in the space. What do you look for when looking to invest in passion economy companies?
Since I wrote my original blog post, COVID has accelerated a lot of change in work and catalyzed a ton of entrepreneurship and digitization of previously-offline businesses. That’s all very much in-line with the thesis of the passion economy: people being able to monetize individuality and non-commoditized skills at scale, supported by digital platforms. It’s great to see the proliferation of new companies that are supporting economic empowerment in various ways, whether it’s simplifying the creation process for something, enabling individuals to build and reach an audience, or creating a platform for specific types of work.
There are a few characteristics I look for in startups, though of course, this is more art than science at the earlier stages:
Largely, it’s a people bet. Specific traits that I really value are resilience and grit (when they’re facing a million obstacles, will they keep going?), a propensity for action, and how deeply they’ve thought about the market. Did they take the time to learn the history of prior startups and understand the competitive landscape and market dynamics? In the creator space, founder-market fit is really important. The first users/customers typically come from relationships, so founders that have faced challenges first-hand or have built tremendous customer empathy often have an unfair advantage in engendering trust and support.
The company broadens access to a new type of work or makes it way easier to do an existing job that had previously been gatekept. I believe there are many types of differentiated skills and knowledge that can be productized and monetized in ways that perhaps we can’t even yet imagine.
I’m drawn to markets that may appear small at first glance, but that can actually be expanded. I think the creator space is emerging and nascent, and TAM analysis can belie the actual size of markets. New models are re-configuring existing value chains and cost structures, and for disruptive innovations, the potential market among non-consumers usually exceeds what is already being consumed.
“Working with Li is like adding a growth, content distribution, and brand expert to your team. Li has been instrumental in our journey getting from our seed to Series A.”
— Ben Huffman, CEO of Contra
How many billion-dollar businesses do you think there will be in this space?
A lot! People tend to conflate the passion economy with the creator economy, but the passion economy isn’t an industry vertical — it’s an entirely new economic movement that empowers individuals over institutions. We’re seeing that decentralization of power playing out across industries, whether it’s education, media, or money.
For work, people are going direct-to-consumer in offering services and products and monetizing individuality at scale, supported by digital platforms. That’s clearly not limited to social media influencers, but encompasses chefs, teachers, fitness instructors, musicians, really every industry!
There are companies that I’ve invested in that people are usually surprised to hear fit within the passion economy: CopyAI is an AI copywriter that helps marketers, entrepreneurs, and salespeople to write better copy. Dumpling is a platform helping solopreneurs to start and run their own grocery delivery businesses. These are businesses that don’t fit the image that usually comes to mind when people think of “creators,” but are nevertheless empowering entrepreneurship in various ways.
“Most investors can help you with hiring, operating, etc. Li has the ability to truly empower and challenge your vision, in terms of what you want to achieve as a company. That’s an amazing strength that no other investor has in this category.”
— Alberto Martínez Guerrero, CEO of Streamloots
What’s the biggest difference between working at a firm like a16z, and having your own fund?
It’s akin to the difference between being an employee vs. being a founder of a company; or being employed by a media company vs. being a solo creator. It’s a completely different level of autonomy, freedom, and ownership.
I used to work at a firm with 200 employees, ranging from marketing to investor relations to portfolio support, and so I had the luxury of being able to focus just on new investments. Now, I do everything myself — from LP relationships to pitches to portfolio support to marketing. It’s a tremendous exercise in time management, planning, and prioritization.
But at the same time, it’s so gratifying to see every facet of the venture business and to build this firm from scratch. I feel very lucky to be able to do what I’m doing. I also want to give a shoutout to my research analyst Lila Shroff, who is currently on a gap year from Stanford, who has been a lifesaver. And though I’m a sole GP, I definitely don’t operate on my own: there’s a tight-knit group of angels who constantly talk to each other, in addition to LPs who act as my sounding boards and founders who support me in sourcing deals, providing emotional support, etc. I often cite a phrase from Free Agent Nation by Daniel Pink that really describes my life: “Free agents may be bowling alone, but they’re not going it alone.”
If someone is considering taking the leap into a “passion economy” life, what advice do you have for them?
I encourage folks to first start with side hustles before graduating to a full hustle, to both discover whether the work is something they enjoy, and to build their confidence in their skills. Passion economy life is akin to being an entrepreneur: it’s more uncomfortable in many ways vs. a traditional job that has a stable paycheck and a built-in support system. It’s certainly not for everyone, but for the right person, at the right time in their lives, it can be an incredible option.
Also, check out Side Hustle Stack, a website that I built with Lila Shroff and Brandon Handoko to help folks find flexible, platform-based work. Flexible work is way more than just gig work now, and there are so many platforms that are helping people to monetize different skills or interests they have.
What should we expect to see unfold in the next few years in the passion economy? Give us your vision of the future.
I think about this constantly! A few predictions:
What kids do for fun today will become the new creator professions of the future. I think back on my own childhood: the activities that gave me the most joy (but which adults thought were a waste of time) were blogging on platforms like Livejournal and Xanga, painting and making crafts, reading and writing fanfiction, and talking to friends that I had met through online forums. All of those activities now are monetizable through the passion economy. Kids are perhaps the most attuned to creativity and play, so I look to them as an indicator of where the future of work lies.
Education changes dramatically to equip creators rather than training employees for traditional jobs. There’s a dearth of creator-focused education today, and many creators tell me they’re figuring things out as they go through trial-and-error. Various programs are moving to fill this gap, like YouTube Creator Academy and independent, creator-led courses. I’d love to see more startups playing in this space and bridging the education gap through mentorship and content.
Some form of Universal Creative Income (UCI) will become prevalent across social platforms as the arms race to attract creators heats up. Platforms will compete with each other on the basis of their total “comp package” for creators, which will include a financial component.
More financing options emerge to help creators invest in their businesses, and for investors/supporters to share in the upside of creators’ success. I’m also really inspired by new crypto business models like what Mirror (a decentralized blogging platform) enables, which align the interests of creators, audiences, and platforms.
There will be new models that provide an option between being an employee and being a solo creator. We’re already seeing this with Forbes and Every, where writers get support, community, and downside protection from the company, but also retain more ownership and upside. I think this model will spread to other creator verticals and increase the total population who can participate in the passion economy.
I could go on forever because I really believe the passion economy is going to transform so much of life and society. Founders should reach out to me if they want to discuss any of these ideas in more detail!
Getting in touch with Li and Atelier Ventures
Atelier’s website: atelierventures.co
Li’s newsletter: li.substack.com
Side Hustle Stack: sidehustlestack.co
Li’s art portfolio: li-jin.co/art