Friends,

Benedict Evans, analyst and erstwhile investor, once referred to Andreessen Horowitz as “a media company that monetizes through VC.” It was a pithy description of his former employer that got to the heart of the firm’s forceful brand building strategy. 

Avra Capital is a trade school that monetizes through VC. 

In almost all of its core functionality, Avra appears to be a small-batch institution of higher learning. It runs bi-annual cohorts, holds classes, doles out required reading, and assigns homework. What distinguishes Avra from other vocational programs is the trade that it teaches, and the student body it admits. 

Avra is not focused on nursing, HVAC repair, or aeronautics but on the craft of company building. Its student body is made up of many of this generation’s most promising founders—the people behind some of the world’s hottest startups, vying to become tech’s next big winner. 

All matriculate to learn directly from founders who have overcome the obstacles they currently face. Walk the imagined hallways of Avra Academy, and you’ll pass the bronze nameplates of its luminary educators: Professor Parker Conrad of Compound Software, Visiting Scholar Greg Schott of Enterprise Sales, and Dean Tony Xu, Head of Urban Scanning. 

Avra’s top-tier instructors and effective playbook owe a great deal to the experience of its founder, Anu Hariharan. Starting in 2016, Hariharan ran Y Combinator’s Growth team, backing companies like Brex, Monzo, Gusto, Zepto, Groww, Rappi and Faire. As part of that role, she and co-head Ali Rowghani managed the accelerator’s post-Series A program, designed to help breakout companies manage the next phase of their growth. When YC President Garry Tan abruptly shut down the division in March 2023, Hariharan and several colleagues used seven years of lessons to found Avra. 

Given Hariharan’s bonafides and the quality of Avra’s instruction, it’s little wonder that attaining entrance to the fund’s program has grown increasingly competitive in just its first year of operation. The chance to attend small, tactical sessions with legendary entrepreneurs is attractive to many – not least when delivered in the vulnerable, off-the-record style that Avra encourages. It wants its students not simply to understand how DoorDash’s CEO recruits his C-Suite, for example, but to hear the mistakes and lessons learned along the way.

That frankness is why Avra guards the content of its curriculum so closely. It is one thing to ask a founder to regale an audience of junior peers with a parade of mistakes, quite another to make those battle scars visible to the public. 

Perhaps because of its combination of secrecy and cache, Avra (and YC Growth before it) represents a tantalizing prospect for outsiders. Visit its site, and you’ll find glowing testimonials from alumni but little in the way of tangible detail. How do great CEOs scale their engineering teams? What quirks enable tech companies to maintain a rapid shipping speed? In short, what does a school for super-scalers actually look like from the inside? What do exceptional founders know that the rest of us don’t?

Over the past nine months, The Generalist has been given unprecedented access to Avra’s program, experiencing it as a student might. That includes accessing its classes, program material, and alumni resources.

It proved an illuminating process, giving me insight into Avra’s unusual advantages in the venture landscape and a fiercer appreciation for the grit, guile, intensity, and consistency it takes to build a generational business.  

Actionable insights

If you only have a few minutes to spare, here’s what investors, operators, and founders should know about Avra.

1. The school for scale. Founded in 2023, Avra runs a selective program for the world’s best growth-stage entrepreneurs. It helps the leaders of breakout businesses learn how to build an executive team, maintain shipping speed, and plan for the future. It’s a kind of doctoral program for startup CEOs, albeit one with a well-guarded curriculum and a venture fund on the back end. 

2. Learning from Y Combinator. Avra’s team previously worked together at YC Continuity, the growth practice of the famed accelerator. When YC suddenly shuttered that division in March 2023, Avra founder Anu Hariharan put her plans for a new growth program into high gear, bringing colleagues with her. 

3. A missing piece. Though YC is still recognized as the best launchpad for early-stage startups, it has competition from dozens of other incubators and accelerators. Avra is the first of its kind: a high-quality standalone program for post-Series A companies. As a result, the fund has the opportunity to establish itself as a standard bearer for later stage startups.

4. Tactical masterclasses. Avra’s program is taught by some of the startup ecosystem’s most impressive and successful founders. Sessions cover choosing the right metrics, hiring executives, scaling engineering, leveling up financial planning, and preparing for future fundraises. Each one is a tactical masterclass full of detail. 

5. Reordering VC. Though Avra’s principal mission is to assist founders through targeted education, it monetizes as a venture firm. It is raising a reported $350 million to invest in a small fraction of the startups that pass through its program. It’s a clever strategy that reorders the traditional sequence venture capital follows. Rather than winning a deal and then adding value, Avra does the work upfront, proving its impact and building rapport ahead of a future round.  

The making of a VC

Anu Hariharan made her decision. After much deliberation and research, she’d elected to choose three promising growth-stage companies: online grocery delivery provider Instacart, travel marketplace GetYourGuide, and on-demand storage player MakeSpace.

It represented an unusual sort of investment decision—freighted by high stakes but with no money on the line. It was part of the interview process with a New York City hedge fund interested in venture investing—“you can probably easily guess who,” she says—and Hariharan had been tasked with pitching a trio of compelling Series B startups.

It was a tricky task for a former Qualcomm engineer and Boston Consulting Group principal with no venture capital experience and little familiarity with the tech landscape. “I didn’t even know what Series B was,” Hariharan recalled. “I didn’t know anything about startups. I didn’t even read TechCrunch.”

Eleven years later, we know that Hariharan picked well. Instacart was valued at $25.4 million in its 2013 Series A; today, it trades at $9.5 billion. The Berlin-based GetYourGuide raised $194 million in debt and equity in 2023 at a $2 billion valuation; it had raised approximately $20 million at the time Hariharan assessed it. Only MakeSpace can be considered a miss, merging with rival firm Clutter, which subsequently sold at a steep discount last year. 

Unsure of her selections and eager for a more experienced opinion, Hariharan reached out to seasoned investors, asking for their advice. That act summarized Hariharan’s direct, unflappable approach to problem solving, and changed the course of her career. 

“I sent cold emails to four VCs saying, “I’m interviewing at this fund, and I would love any feedback on the three companies I’ve picked to pitch,’” Hariharan recalled. “One of the people I emailed happened to be Jeff Jordan.”

As it turned out, Jordan was the perfect recipient for Hariharan’s message. Not only had he spent time at BCG before rising through the ranks at Disney, stepping in as President of PayPal, co-founding OpenTable and Wealthfront, and arriving at Andreessen Horowitz (a16z), but he was also actively researching Instacart.

“I didn’t realize that he was diligencing them for the Series B,” Hariharan said. “He thought my diligence was pretty good and pretty interesting, so we started going back and forth on emails. And then he said, “Whenever you’re in San Francisco next, I’d love to meet you.”

Rather than leave the encounter to fate, Hariharan said she’d be in town the next week and booked a ticket. When she arrived at a16z’s office, Jordan surprised her with a few additions to her agenda. “I thought I was meeting just him, but he’d arranged eight meetings for me with everyone else at the firm,” Hariharan said. 

Shortly after, Hariharan was offered a job on a16z’s investment team. It marked the beginning of her venture career and the start of a breakneck education in a new kind of investing. 

Though Hariharan had spent much of her time at BCG in the firm’s private equity practice, conducting detailed due diligence on potential investments, VC required her to adjust her perspective. “I had to recalibrate my thought process from PE to VC. After every pitch meeting, Jeff would ask me to articulate my point of view within five minutes. He also helped me focus on how to identify founders because so much of venture is about picking the right person.”

In addition to paying closer attention to entrepreneurs, Hariharan had to learn to let go of some of the conservatism her private equity experience had inculcated in her. A lunch meeting with firm co-founder Marc Andreessen encouraged her to focus more on a company’s potential than its risks. 

“It was sometime around my nine-month mark at a16z,” Hariharan recalled. “He told me that usually, when he onboards someone, he has to teach them not to say yes to too many investments. But for me, he was going to have to teach me to say yes to one of them.” 

Andreessen told her that a VC’s biggest mistakes were ones of omission – the great companies that you should have invested in but didn’t. He urged Hariharan to apply her analytical brain to investigating a startup’s upside, developing the conviction to take a swing. 

Hariharan cites Chris Dixon and Ben Horowitz as additional influences during this stage of her venture schooling. “Ben is exceptional at B2B SaaS – I learned a lot from how he dug into whether a sales team was working and the go-to-market metrics. Chris is just one of the most intelligent thesis-based investors I’ve ever seen.” Hariharan took lessons from both of them. 

Although Hariharan may have been a greenhorn when it came to the venture asset class, she entered the industry with technical expertise, strategic experience, and a natural nose for investing. She tells the story of her entry into venture capital with deep humility – casting herself as a learner, above all else – but Hariharan’s fast rise is a testament to her talents. Spend even a few minutes with her, and you cannot help but notice her striking but unflashy intellect, a direct, genial speaking style, and substance. Her long-time colleague Nic Dardenne summarized Hariharan’s gifts eloquently. “There are two things: one, she works insanely hard. She’s an incredibly successful person but is also the hardest-working person I know, both for the team and the founders she works with. Two, she does right by founders. She has this superpower of telling people what they need to hear, not what they want to hear, but doing so in a way that endears herself to them and makes them trust her even more.” 

Not long into her second year at a16z and another Silicon Valley institution had started noticing her talents. 

Sam Altman, then President of Y Combinator, had decided to launch a growth practice designed to double down on the accelerator’s best-performing businesses. He sought two general partners to run “YC Continuity,” with existing Managing Director Ali Rowghani—the former CFO and COO of Twitter—slated to step into one of those roles. 

Despite her relatively short tenure in venture, Hariharan had already made an impact on the YC community, developing a relationship with several of the ecosystem’s startups. “We worked with a lot of YC founders at Andreessen Horowitz,” she said. “One of YC’s partners pinged me and said they’d heard my name a lot and asked if I’d be open to having a conversation about the growth fund they were planning to launch.” 

She was. Though Hariharan enjoyed her time at a16z, there was no path to a partner at the time – significant for someone who had been on the partner track at BCG. After she completed a two-year stint, she planned to step into an operating role at one of the firm’s portfolio companies. “I was on the path to be the CFO of one of the startups we’d invested in,” Hariharan reflected. “I never felt like I needed to be an investor. My goal is always around learning and impact. I thought, ‘Maybe I can go to a portfolio company and do that for four or five years.’”

Altman’s interest forced her to reconsider that plan. “YC is such an amazing place and a very differentiated platform,” Hariharan said. “I think it’s unlike any other VC. It’s not really a VC fund.” Over a few months, Hariharan got to know the team better, and by August 2016, she’d decided to join as YC Continuity’s second managing director. 

Continuity

Though Hariharan intended to stay four years at Y Combinator, she lasted seven. That duration is a consequence of the compelling power of YC’s platform, the value the Continuity practice created, and the abruptness with which it was shuttered. 

But we should not rush ahead. When Hariharan joined Ali Rowghani in 2016, the pair were tasked with building out a new practice under the auspices of Y Combinator. In addition to functioning as a growth-stage investor, Continuity was expected to build a curriculum and operate a program of its own. 

Much of that mission aligned with Y Combinator’s roots, of course. Ever since its founding in 2005, it had operated a de-facto “founder school,” teaching unseasoned founders how to build startups. Its syllabus – devised by Paul Graham and honed by countless partners and practitioners – accelerated the trajectories of companies like Reddit, Airbnb, Stripe, and Flexport.

Continuity would do the same, albeit for a different audience and with some critical tweaks. Rather than assisting scarcely-formed projects, it would work with established startups, rapidly scaling revenue and headcount. That contrasting focus necessitated changes to YC’s classic syllabus and the program's structure. 

Instead of serving 50, 100, or even 400 startups a batch, Continuity worked with 8-12. Rather than focusing on finding product-market fit, Hariharan and Rowghani counseled founders on scaling as CEOs, hiring executives, maintaining shipping speed, plowing through plateauing growth, and raising later-stage rounds. And because those topics require detailed tactical knowledge and emotional credibility, Continuity primarily relied on active founders – those still “in the arena” – to teach its courses. Plaid’s Zach Perret and Webflow’s Vlad Magalin both taught for Hariharan’s program. 

It is perhaps unsurprising that Continuity proved a hit, with founders across YC’s ecosystem jockeying for entrance. It didn’t hurt that the growth program stood alone in the competitive landscape. Although myriad accelerators like Techstars and 500 Startups had cropped up to vie for early-stage founders, no dominant program existed for scalers. “I don’t think anyone runs something similar,” Hariharan said. “Even now that I’m on the outside and have spent all this time learning about founder programs, I still haven’t found anyone who does it – at least not as well.”

In part, that’s because of the network and wisdom Continuity was able to glean from its parent company. “I think we learned the art of doing it well because we got to see how well YC did it for the early stage,” Hariharan reasoned. “It’s not easy to do without that.”

Though Continuity saw itself principally as an educator, it monetized like YC – via investments. Once again, it did so with a twist. While YC makes investment a requirement to participate – you cannot attend the program without accepting its “Standard Deal” – Continuity operated opportunistically, investing in a select number of companies only when the right moment arrived. Not only was this a logical reflection of later-stage funding rounds, but it also meant that companies that matriculated to Continuity did so with no strings attached. The vast majority of graduates never received capital from Hariharan and Rowghani; of the approximately 180 that went through the program, Continuity backed just a fraction of them. 

As she had at a16z, Hariharan continued to learn from those around her, not least future OpenAI’s supreme leader, Sam Altman. In particular, Altman exhorted Hariharan to test her conviction and size bets aggressively. “Sam had this characteristic of asking, ‘Are you betting the house?’” Hariharan recalled. “It was his way of understanding if you had high conviction on an investment. Either you have full conviction, or you don’t. If you’re on the fence, why are you doing this? And if you have full conviction, why aren’t you doing more? It’s a simplistic framework, but I appreciate how much clarity it brings to investment decisions. That’s the biggest thing I learned from Sam.”

According to Hariharan, Altman’s heuristic made a noticeable difference on Continuity’s investing style over time. In its first fund, the growth team approached capital-intensive businesses cautiously, even if a large addressable market might have justified a bolder strategy. By its last fund, Continuity had learned to lean in. “We were a little gun shy when the risk was higher, but then by the third fund, we were more aggressive. When we saw Zepto, which is a 10-minute quick commerce player in India, we bet the house. It wasn’t clear it was going to be a breakout, but it is today.”

Hariharan and Rowghani were not alone in making these investment decisions. Their growth practice grew to include Nic Dardenne, a former Morgan Stanley investment banker, and Tiffany Kosolcharoen, who conducted market intelligence at Meta. 

Dardenne operated as a traditional growth investor, albeit one with a particular gift for grasping a company’s financials. A colleague likened his role to that of a “mini CFO” for some of the companies he works with, helping to retool their models from the ground up. 

Kosolcharoen served in a slightly different capacity. At Meta, she built out the market intelligence systems and conducted research for a portfolio of products. At YC Continuity, she was brought on as Head of Investment Research, tasked with monitoring the accelerator’s many companies and spotting candidates for additional capital. Through this process, Continuity quickly spotted the steep trajectory of startups like Deel and Zip before they raised Series A rounds. That allowed the Continuity team to build a relationship and lead later investments. 

Over Continuity’s seven-year run, it pulled together a promising portfolio, many of which have repaid its investment many times over. Hariharan and Rowghani’s prominent bets include Stripe, Coinbase, Faire, Monzo, Groww, Vanta, Segment, Rappi, Gusto, and Brex. Naturally, not all have been hits – in October 2023, trucking firm Convoy, a Continuity investment, shut down operations after consuming over $1 billion in capital. Nevertheless, on balance, Hariharan’s team seems to have done remarkably well. “My hope is that in time, we’ll show that we had one of the best growth track records during that period,” Tiffany Kosolcharoen said. 

Brex represented a particularly significant investment for Hariharan. Not only did she preempt a pricey Series B round for a company that had little revenue in 2018 – a decision that was spectacularly vindicated in the following years—but she also found a future colleague. 

Serving on Brex’s board introduced her to Lucas Fox, an early employee who would go on to manage its startup business unit. The pair became frequent collaborators, with Fox struck by the intensity with which Hariharan was willing to graft on behalf of the company. “She was almost like an exec at Brex. We worked really closely together – we’d go on three-to-five-day work binges when we were trying to solve a problem together.” Sometimes, when Fox was tackling a particularly thorny issue, he’d stay at Hariharan’s family home for days at a time. 

That level of commitment, combined with the value of its programming, forged an unusually strong bond between Continuity’s principals and the startups it served. One founder who went through the course described it as “one of the most valuable things I’ve done as a CEO.” Overall, YC’s growth program earned an NPS of 70+ from founders, an illustration of the esteem in which it was held. 

All of which made its sudden demise even more startling. 

The last job

If there was one source of friction between Anu Hariharan and Y Combinator, one wasp at the picnic, this was it. The accelerator wanted Continuity to invest only in startups that had gone through its early-stage program. Its mission was to prepare YC alumni for the next phase of growth and build greater ownership in their businesses, not accelerate the best growth founders, no matter what their provenance. 

It marked a philosophical difference between Hariharan and her employer. Though she understood that accepting non-YC companies presented a challenge – risking upsetting legacy founders in favor of newcomers, she considered it a surmountable one. “I actually told YC that maybe the program should include companies from the outside. Just like when you look at universities, there are two main entry points: undergraduate and graduate,” said Hariharan. 

YC dabbled with the idea, allowing Continuity to back two external startups: British neobank Monzo and the ill-fated logistics company Convoy. Ultimately, though, it declined to continue the experiment, preferring to exclusively serve alumni. 

Long before Hariharan joined Continuity or even a16z, she’d known that, at some point, she wanted to build a business of her own. “I’ve always had the itch to be an entrepreneur. I didn’t know whether I would start a company or a fund, but I knew that my last job could never be part of any platform.” The limitations on Continuity’s operations, added to the fact that she’d stayed at YC much longer than she’d anticipated, caused Hariharan to consider building something of her own. 

By the end of 2022, she’d written a “strategy letter” outlining the fund she planned to start. It would be a firm influenced by the impact of YC Continuity but available to all founders. “I thought that what we built at YC was awesome, and I really wanted to continue that work,” Hariharan explained. “Barring a few, growth investing on the outside is done so poorly. It’s done lazily. Everyone thinks, “Oh, these companies have their Series A, that’s enough. They have $5-15 million in revenue; they don’t need support.’ That’s absolutely not true. I felt there was an opportunity to do this really well, inspired by all the YC principles I learned, but to do it differently.”

There’s a long-standing joke in the Hariharan family: every financial recession comes for Anu. She graduated college in the wake of the dotcom crash, then received her MBA amidst the wreckage of the global financial crisis. But as America flirted with another downturn at the start of 2023 and Silicon Valley weathered a banking crisis, the Hariharans were uncommonly sanguine. “My family thought, ‘Oh, in 2023, Anu is safe; she has so many years of experience,’” Hariharan says with a chuckle. “And then, of everyone in the family, I was the only one without a job.” 

The defenestration of Hariharan, Rowghani, and the rest of the Continuity team was swift. On March 13, 2023, The Information reported that new YC president Garry Tan had decided to close the firm’s growth practice as part of a push to refocus the accelerator. “Late-stage investing turned out to be so different from early-stage investing that we found it to be a distraction from our core mission,” Tan told The Information at the time.

It came as a jolt to Hariharan. Though she’d laid the groundwork for a new fund, she hadn’t expected to take the jump until 2024 at the earliest. Now, the transition had been thrust upon her. “It was hard, she said. “We had to take care of the whole team. It was a huge shock to them.” At the time of Tan’s announcement, Continuity still had $500 million in capital left to invest. 

It caught many prominent alumni off-guard, too, with at least ten startups expressing in a letter to YC that they were “surprised and deeply disappointed” by a decision that impacted the composition of their boards. Signatories included the founders of Brex, Deel, Rappi, Zepto, Convoy, and Monzo.

Though undoubtedly a blow to Hariharan and her team, it also presented an opportunity. “I had assumed I wasn’t going to take anyone with me from YC, which is why I’d started conversations with Lucas [Fox] ahead of time,” Hariharan said of the recently departed Brex employee. “Now, I could also get Nic [Dardenne] and Tiffany [Kosolcharoen] from day one, which meant there were many steps I could eliminate, and we could spring into action very quickly.” 

By September 2023, seven months after Continuity’s closure, Avra Capital ran its first batch.  

The Avra academy

Almost exactly a year after Avra launched its program, welcoming eleven companies into its cohort, it is wrapping up its third batch. In the intervening 12 months, Avra is reportedly honing in on $350 million in capital, according to TechCrunch (Hariharan declined to comment on the matter). Andrew Davis, Managing Partner of Socium Ventures, shared his rationale for backing Avra’s debut vehicle: 

The easiest way to gain conviction in Anu’s track record was by seeing how many of the founders and partners she worked with chose to be investors in [Avra]. I have partnered with Anu for many years, and she is one of the most impactful and ethical investors I’ve ever worked with. We couldn’t say ‘yes’ fast enough when she asked us.

As well as winning over limited partners like Davis, Avra has also honed its curriculum, built intriguing in-house software, and impressed some of the world’s most coveted growth-stage founders. Entrants include European OpenAI challenger Mistral, creative platform Runway ML, GPU orchestration system Foundry, gaming device Backbone, and many others.

In devising Avra, Hariharan chose to build around a few key pillars – some inspired by YC Continuity, others in direct opposition: 

1. Open to all. Since Avra is not part of an existing platform, it is free to accept any business it chooses without having to give preferential treatment to YC alumni. Places are given to the growth-stage firms Avra considers most promising. 

2. Founder taught. Like YC Growth, Avra’s programs are taught by expert practitioners, typically tenured CEOs or VPs with domain expertise. These people have gone through the same challenges as Avra’s students and can speak with experience and authority. 

3. Off-the-record. Many venture firms produce first-rate content for founders. However, when this information features advice from other entrepreneurs, it is inherently “on-the-record.” By keeping all of Avra’s sessions confidential, instructors are able to speak with greater vulnerability, specificity, and candor.

4. Education-first. Avra sees itself as an educational offering first and a fund second. This is more than just marketing. The majority of the team’s time and focus is spent on improving its programming and associated offerings. The idea is that investment opportunities will naturally follow. 

5. Personalized curriculum. Though growth companies face the same set of challenges – scaling executive teams and maintaining high throughput – they do not all experience them at the same time. Avra tries to ensure its sessions directly attack founders’ most pressing problems, as well as prepare them for the future. 

6. No strings attached. Admittance to the program is not predicated on Avra investing, either implicitly or explicitly. Founders understand that Avra monetizes as a venture firm but are not pressured to solicit them for future rounds. Hariharan’s team believes it will earn the opportunity by delivering value, not by making demands.   

These principles have guided the creation of the Avra apparatus, a machine that ingests thousands of startups but serves a select few. It is neither the slow, precious, boutique venture capital of the traditionalists nor does it adhere to Y Combinator’s industrialized model. It is something new, something in between – a processed, productized approach to small-batch brewing.

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