Hustler Words – Ali Partovi, a name that may not be a household word, yet holds significant sway in Silicon Valley. This Iranian-born Harvard graduate, with a resume boasting early involvement in companies like LinkExchange (acquired by Microsoft for $265 million) and iLike (sold to MySpace), has quietly built a venture capital empire. His venture firm, Neo, launched eight years ago, is now proving its unique approach to identifying and nurturing exceptional talent is not only innovative but incredibly lucrative. Partovi’s strategy, detailed in a recent hustlerwords.com interview, is a masterclass in spotting future tech giants before they even exist.
Neo’s early investments speak volumes. It was the first institutional investor outside of Twitter to back Bluesky, the decentralized social network valued at $700 million. Its portfolio also includes Kalshi, a prediction market that exploded in popularity during the 2022 US presidential election. But the real story lies in Neo’s unique talent acquisition strategy.
Partovi’s method involves more than just reviewing resumes. He famously administers handwritten coding tests, not as a gatekeeping measure, but as a springboard for deeper conversations. This approach led to his discovery of Michael Truell, an MIT student who, after a 15-minute coding test, became a key partner in Anysphere, the creator of the AI-powered coding editor Cursor. Cursor is now eyeing a staggering $10 billion valuation, a testament to Neo’s prescient investment strategy.
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Neo’s approach is a radical departure from traditional venture capital. Instead of focusing on specific sectors or established teams, Partovi identifies exceptional individuals, often while they’re still undergraduates. The firm’s “Neo Scholars” program provides $20,000 grants to college students for a gap semester, with no equity strings attached. This initiative has yielded impressive results, with Neo Scholars founding companies like Cognition (valued at $4 billion), Pika Labs ($700 million), and Chai Discovery (backed by OpenAI and Thrive Capital). Partovi even proudly notes that every OpenAI new grad hire last year was a Neo Scholar.
Partovi’s investment philosophy centers on three key qualities: technical proficiency, entrepreneurial drive, and a willingness to disrupt the status quo. However, he adds a fourth, arguably crucial element: magnetism—the ability to attract top talent. This focus on individual potential, coupled with mentorship and strategic funding, has transformed Neo into a venture capital powerhouse.
Despite the influx of applications (doubling annually), Neo maintains its selectivity, prioritizing quality over quantity. This extends to fund size; Neo recently closed a $320 million funding round, a modest increase compared to its previous round, reflecting a commitment to strategic investment rather than aggressive scaling. Partovi’s personal investment in the new fund is significantly larger than in all previous funds combined, underscoring his unwavering belief in his approach.
While Neo’s early funds are already performing exceptionally well (the first fund is three to four times its initial value, with potential for further growth), Partovi emphasizes building enduring value over chasing quick returns. His advice to founders? Focus on creating exceptional products that people love; the financial success will follow. This long-term vision, combined with a unique talent identification process, positions Neo for continued success in the ever-evolving landscape of venture capital.
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