Mac the VC on the Journey from Homeless To Becoming A VC | Full Interview with Harry Stebbings

Career Origin and Venture Entry

• Mac (the interviewee) entered venture capital through an unconventional path: a former software engineer and government contractor who became a two-time founder.
• His second startup failed, leading to employment at a marketing firm which he quit after one week following an ethical disagreement regarding a client (the NRA) and the killing of Philando Castile.
• In 2016, lacking a college degree or finance background, Mac applied for a role at the investment arm of the State of Maryland, leveraging his local Baltimore network and startup experience; he was hired four and a half months later.
• Mac faced significant personal isolation and depression following his startup failure, eventually finding liberation through the realization that his social support network's love was unconditional regarding his success or failure.

Founding Rare Breed and Fundraising Strategy

• The decision to launch Rare Breed was catalyzed by the killing of George Floyd in 2020, coinciding with Mac's growing Twitter presence and an initial effort to create an SPV for Roberto (founder of Robo Amp) after other investors rejected him due to being a Latinx man in Texas.
• A mentor provided a $250,000 "challenge" to raise a fund; Mac utilized Twitter to directly message VCs, securing over 1100 meetings between June and September 2020.
• Mac raised $2 million via "soft circle" commitments on Twitter, which provided the confidence to resign from the state government and launch Rare Breed.
• The firm raised $10 million using a non-traditional structure:
  • No General Partner Commitment: Mac did not invest personal capital due to a lack of funds at the time.
  • Rolling Closes: The fund utilizes a rolling close every three weeks rather than a single large close.
  • Flexible Capital Calls: LPs have three options for funding: 100% upfront, 50% over two years, or 33% over three years, with a minimum annual commitment of $10,000.
  • Public Solicitation: The fund operates under Reg 506(c), allowing for public marketing and direct onboarding via a website that converts subscribers into LPs without initial conversation.
  • Legal Costs: Legal fees were deferred and covered pro bono by a lawyer who discovered Mac via Twitter.

Investment Philosophy and Portfolio Construction

• Rare Breed focuses on pre-seed investments with check sizes between $250,000 and $1,000,000, prioritizing ownership multiples over percentage ownership.
• The target portfolio size is 40 to 45 companies, with 6 to 10 follow-on investments per company and a 5% allocation for off-thesis opportunistic deals.
• Geographic Focus: The fund specifically targets founders outside major tech hubs (Silicon Valley, New York, Boston), including North America, South America, and the UK.
• Mac rejects the "hot deal" strategy, arguing that a deal's value is determined by its ability to return capital rather than the prestige of its early investors (e.g., Sequoia or First Round).
• The firm's current strategy is not solely focused on diversity for diversity's sake, but rather as a byproduct of seeking high returns among overlooked talent; 77% of the portfolio consists of underrepresented founders.
• Recent Notable Investment: Unspun (Oakland, CA), a company using 3D printing and body scanning to create zero-waste custom jeans, supported by a letter of intent from Levi's Head of Design.

Critique of Industry Norms

• Mac criticizes the industry's reliance on "hot deals" and the gatekeeping role of top-tier funds, stating that institutional advisors often incorrectly imply only friends of top VCs can access quality deals.
• He argues that diversity initiatives have largely failed to materialize among top institutional LPs (pension funds), who avoid the conversation because they do not control the initial capital flows to emerging managers.
• Mac identifies a structural barrier where large institutions cannot write checks small enough ($1M-$5M) to participate in micro-funds led by emerging diverse GPs.
• He advocates for eliminating the "friends of top funds" requirement, noting that successful outcomes in venture are defined by returns, not the pedigree of the initial investors.

Challenges and Future Outlook

• Personal Hurdles: Mac overcame feelings of inadequacy and imposter syndrome through validation from the 500 Startups VC Unlocked program and peers, eventually realizing he possessed the requisite knowledge for venture management.
• Biggest Surprise: The unexpected viral impact of Twitter, where his follower count grew from 2,500 to over 50,000 in a year, directly facilitating LP introductions and media opportunities.
• Rejection of Rolling Funds: Mac declined to use standard "rolling funds" (e.g., AngelList) because they risk alienating early LPs by restricting their access to future high-performing deals outside specific quarters; he created a hybrid structure to gain technological efficiency without these structural disadvantages.
• Forward-Looking Vision: Mac aims to build the "next NEA" or "Greenspring Associates," establishing a top-tier, multi-stage firm based in Baltimore, honoring the legacy of mentors from that region.
• Advice to Emerging Managers: New GPs should not feel bound by traditional fundraising rules or structures; they are encouraged to innovate legal and operational frameworks (e.g., public solicitation, flexible capital calls) to suit their specific needs.