EVENT: Deep Dive Into Hawke Deal Network With Erik Huberman Of Hawke Ventures

Scott Kelly is joined by one of his first guests – Erik Huberman, a GP at Hawke Ventures and co-founder/CEO of Hawke Media. He talks all about the Hawke Deal Network that connects individuals, family offices, and institutions with promising investment opportunities. Erik explains their “unfair advantage” in picking winners, as well as their venture into the tech and AI space. He also offers his optimistic outlook on the state of venture capital and the current economy, emphasizing the importance of staying disciplined and recognizing opportunities in a recovering market.

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EVENT: Deep Dive Into Hawke Deal Network With Erik Huberman Of Hawke Ventures

I’m excited to introduce Erik Huberman from Hawke Media and Hawke Ventures and what we’ll be talking about is the Hawke Deal Network. Erik, welcome.

Thank you for having me.

Erik Huberman Of Hawke Ventures

Erik, before we get started into the Deal Network. Share a bit about your background because you’ve had a pretty luscious career on the media side and on the venture side. Why don’t you share a little bit of perspective about your success up to this point then we jump into the opportunity with Hawke Deal Network.

I got to say it because I’m a marketer at heart. It’s the Hawke Deal Network. Not the Hawke Deal Room.

My apologies.

My background is in eCommerce. I’ve built and sold a couple eCommerce companies. This is over a decade ago and many years ago, I started advising and consulting for a bunch of different brands on how to drive revenue growth using marketing and how to leverage these marketing channels that were popping up. Digital was still pretty new. We had some early success in it. I ended up working with some big brands like Verizon, Red Bull, HP, and as well as a lot of startups and some gross stage companies, everything in between and found that there was still a huge problem in the marketing landscape.

There’s 90,000 marketing agencies in the US, and I would put my stake in the ground that about 99% of them have no idea what they’re doing. A few that are good generally go up market and only want to work with the Fortune 2,000 and get a little pretentious about it. The idea of being the best at what we do but also easy to work with became the calling card admission of Hawke Media. The idea is, we could go into a brand, identify the holes in their marketing side of things and then spin up the team exactly what they need, when they need it and ebb and flow those needs change.

Again, I started almost a dozen years ago. We’ve now got 250 full-time people. The company is still bootstrapped and independent. We’ve worked with almost 6,000 brands at this point. The company continues to grow and thrive and do well. A year into that, my theory about building this business when I was in my late twenties was, I will cashflow the agency and put that money into real estate. I came from a real estate family.

I like the asset as an investment class. That was my plan and then in a year, a friend of mine reached out and said, “We’re pivoting our company into eCommerce and we want you to invest.” I was like, “That’s cool, but I’m not investing in it. I spend all my time and startups and I’m not going to do that.” He goes, “No, I’m not asking you. I’m telling you. It can be a small check but you’re in.”

I wrote that check because I appreciated how pushy he was and that company became a multibillion-dollar company called FabFitFun. I then realized maybe I shouldn’t be so stubborn about this and open my mind up a little bit. I started writing small checks and doing some angel investing. After three years, we had about an 11X return.

I had hired someone to help me manage that portfolio as well as we were doing some sweat equity deals with Hawke Media and he came to me and said, “You’re sweat equity deals are not doing very well because it turns out when someone’s willing to hand you just a giant chunk of their company to do marketing. They probably don’t value their own company very much, but these checks your writing are doing well. We should do more of this.”

As a guy that did not have unlimited capital, we talked about how we could write bigger checks and decided to raise our first fund. We raised our first fund starting in mid-2019 closed at mid-2021. That fund has 3X to 4X on paper returns so far in 6 to 6 years, depending on how you look at it. That’s done very well. We then closed our second fund in February of 2024. That already had significant markup as well. The thesis of the funds early on, was, let’s spend 70% of our money on marketing tech, eCommerce tech and commerce enablement. All the tools we use for our clients because we have 550 active clients.

How The Hawke Deal Network Came To Be

We signed between 30 and 50 a month at Hawke Media. If we find tools that we can use, we can invest in them and now be a market maker forum. Let’s do the minority of investments into consumer deals, which some of which have done very well as well. We leaned more into the tech side because of our ability to step on the scale for these companies. Fast forward now, we’ve done over sixteen investments out of the fund and over 100 investments including our angel investments. Fund two again is doing well. At this point, we’ll be fully deployed probably by mid of 2026. It brings us to the Hawke Deal Network and how that came to be.

The fund’s mandate is early-stage marketing tech and eCommerce tech with a very rare investment into an early-stage consumer brand. That’s what our LPs expect and that’s what they committed ten-year capital to. We’re committed to that. It’s doing well, but there’s a lot of deal for what we get outside of that, that are great companies that just don’t fit the fund mandate. It could be a later stage consumer brand that we’ve worked with that we know well and we want to invest in but it’s too late for the fund and we want to be able to get enough ownership or even an investment we’ve made, which will be an SPV.

We’re probably announcing in one of our most popular portfolio companies that we can’t put more of the fund into it. It’s already over allocated into that deal but we have an allocation. Let’s surface it to our LPs as well as our network. This deal flow and this ability to generate deal flow, we’ve had no shortage of. Again, our sales team talks to over 400 qualified companies a month about a thousand different companies a month.

Plus, every company raising in our space that knows about us reaches out because between all the major funds that we co-invest in, name a big venture fund we’ve probably co-invested with, want us to be a part of those because we are strategic advantage, bunch of our clients that we see good traction with, want to raise money, etc. They all want us to be partners, thankfully.

We have no shortage of great deals coming across our desk and now we have the ability to look at them deal by deal and do them. That’s where the Hawke Deal Network came in. We just closed our first deal with PATH Water, which is the aluminum bottled water that you’ll see all over airports. They have partnerships with Hello Kitty and SpongeBob. They do the four seasons water. It’s a cool play that frankly speaks to my marketing side as well. They’ve done well.

They’re growing fast and have a lot of upside and some inside baseball that is going on that we’re excited about. We did their marketing launches as well, originally years ago. That’s been a fun one. Again, we have another couple already in the hopper that we’re running diligence on that we’re pretty sure we’re going to launch one and another one.

Hawke Ventures And Their “Unfair Advantage”

Talk about your unfair Advantage. With all these companies you’re talking to and you are now marketing for, how does that provide you an unfair advantage in picking the winners versus everybody else?

There’s a few ways. Anyone can sign up for it. Our goal there is to democratize what we’re doing on the investing side. The unfair advantage comes in a few forms. One is on the technology side. If we find a piece of marketing tech, hard diligence is second to none because we’re a customer so we can go and use the products, use it on clients, see that it works, see that it becomes mission critical and then that becomes something we want to invest in.

If we do invest, we usually try to build a service around it so that our sales team becomes the software sales team. We make a good example that is Postscript that we invest in. We launched SMS marketing using Postscript and then everyone we sign on to SMS marketing, we generally refer to that. We’ve sent them hundreds of customers and created tens of millions of dollars in enterprise value for that company. We invested when the whole company was only worth $15 million and this is where it gets debatable, but I argue that they’re worth probably close, not quite but close to $2 billion now.

They haven’t raised money since early ‘22, so there’s no real valuation on the company but that’s part of the beauty of it. They’re growing fast and don’t need any outside capital anymore. We’re all just watching our stake in that grow. Those are two advantages. I’d say another one is the ability to get deal flow. Again, we’ve put our name out there. We drink around punch. We market the hell out of ourselves. Everybody that’s trying to raise money that would see us as a good partner comes to us. Generally, if we can be a good partner, that’s what we want to invest in for an advantage to the company, and they see that.

It also sometimes gets us preferential terms. If there’s a reason for that, it gets us to see access that most don’t have. A lot of times, also bigger funds carve out. They take a little bit less of a stake to get us in because they want the partner in. We get a crazy amount of deal access that has been solid at times and we have our pulse on the industry. We know we have a marketing platform that we build called Hawke AI. They’re watching 6,000 companies marketing, media, and revenue data running through in real time.

We know who’s doing well, who’s not, and what that looks like. When we do due diligence on a company, we have a pretty good idea of what it should be doing and what it is. That goes both ways. Sometimes they’re doing everything right and the numbers look great. They’re a solid team or their numbers are great but they’re not doing a lot right and they have a lot of opportunity. Now we can go in and help them do even better because they’re missing so much and even doing well in spite of themselves.

Those two situations, both can be good in different ways. I’d say the one situation or the situation you don’t want is either way, they’re numbers aren’t doing well. Even if they’re not doing everything right, the companies are not doing well. Not interested. If they’re doing everything right and the company is not doing well. That’s a real bad sign. That helps as well.

Getting Into The Vast Space Of Tech And AI

You’re on the cutting edge and you see all these companies. What are the most exciting opportunities you see in Commerce, marketing and ad tech now?

The best investment we’ve made before will probably be next. We invest in a company called Gumshoe.AI. They are basically a platform to help you optimize to show up in all the LLMs. If someone’s searching or asking ChatGPT, “What’s the best marketing agency in the US?” We want Hawke Media to show up. It turns out, because I’ve had direct phone calls about it, we are showing up. All these platforms are very individualized, so it shows up for certain people and not others because I got cocky about it and I’m like, “Go ask ChatGPT.” It worked three times in a row. It said Hawke Media. I was like, “There you go,” which was a fun sales tool.

Until the fourth time when we didn’t show up and I had egg on my face. I’m like, “That’s not good. Back to the drawing board.” We’re working on that and it’s going well. It’s become everyone’s interests. It’s rational in terms of like more and more people are going to these AI tools to search for solutions. To show up there is important so that’s been a good one. Again, we’ll have more info on the one next but it relates to AI, but in a very practical commerce driven way that I like. That’s the idea. It’s like, in a day or in a time like now when it comes to technology, assessing what’s hype and what’s real is important.

One thing, we’ve been slow to invest in certain AI tools because it’s so easy to spend on software now that I equate it in a very basic way. It’s like starting a T-shirt company. Anyone can start building T-shirt companies. I promise everyone could go start a T-shirt brand. Get a cool design, put it on a T-shirt and you’ve got a brand. Software is becoming not quite that basic, but it’s getting pretty basic. Our focus now is much more on go-to-market strategy and sales velocities, strategic partnerships. A founder that knows how to get this thing going. How do you build that mode from a marketing standpoint and a sales standpoint? Not necessarily from a great piece of software standpoint.

That’s been a pivot in our thesis over the past year, so is Cursor and Lovable and all these AI development tools have come up. Having great tech is table stakes. That has changed a lot. The way we’re looking at things now, thankfully, we are one of those strategic advantages. It fell into our lap. We spent a few hours as a venture team just talking through what’s changed and what’s new and this is frankly what we came out with. We all agree and we’ve all had successful tech investments that it’s become much more like starting a fashion brand.

Thankfully, we have a lot of experience in that in the way of things like it’s much more brand-driven, marketing-driven and customer-driven than it is tech driven these days. Again, that technology has a low barrier to entry and so because of that, driving into that piece of the business and how they’re doing that. What’s fun in a way is, so many technologists are so bad at it. It does create a huge advantage when you find a great technologist that is a great marketer. Heatmap.com is a good example of this.

Dylan, the founder is a rockstar marketer and a great conversion rate optimization person and known for it as a huge following in one of our investments. He built a great new heat mapping tool that allows you to optimize your website better and do a lot of other things. It’s been off to the races because he knows how to go-to-market with it. He has a great audience. He has a built-in audience that’s taking it and he understands marketing and brand. That’s become a much more important part of this and then big strategic partnerships.

Big distribution partnerships are a big one. They can build a great software, but if you don’t have a great go-to-market partner and again, if you all sign up, you’ll see it but the one coming next is an example of that, where they have massive distribution partners that allow it to be the one that wins because without that, someone can replicate most technologies in a weekend these days. Don’t tell me that you build great tech and you don’t have any of those strategies. If not, someone else is going to build that. They’re going to go to market faster and you’re going to lose.

I’m glad you mentioned that and you mentioned Lovable a couple moments ago. How is the fact that companies like Lovable can scale to 100 million ARR in rapid time? How’s that affecting how you handle from a marketing standpoint and how you handle it from an investment standpoint?

It’s great marketing and a great tool but to be real, there’s other tools like Lovable. Lovable did great marketing. That’s a great example. They did it right and that’s where it’s just a different landscape than it was even a few years ago when it comes to investing in tech and companies. I don’t think Lovable is a year old yet. I have friends that did their pre-seed round and were telling me how excited they were about it in May and I was like, “That sounds cool.”

A line I always have to repeat to myself, Barry Dort said, “I’ve never lost money on the deal I didn’t do.” I’ve done a lot of deals that have gone well. Not that we had Lovable but we’ve had other deals that we’ve definitely passed on but we stick in our lane. Thankfully, as an angel investor, I’ve blown enough of my own money investing in things I don’t understand. I’m not going to do that with other people’s money.

What People Can Get From The Hawke Deal Network

Let’s spend a little time on the Hawke Deal Network. Talk about why you put this together and maybe mechanically how people can participate. What would they look to see once they get involved in your network?

Having a little bit but to bring it home, the reason we launched it was our fund is committed to pre-seed and seed marketing tech and eCommerce tech and again with a rare consumer brand, so everything is at a later stage. Consumer is a later stage and tech that’s too big for us to invest in and even our own deals that are progressing there. As well as things that are outside both of those that we go, “This is just a great company and a great deal. We know the founders.” We have a crazy founder network that’s like, “I want to put money in this.”

I’ve done enough angel investing, but I’ve always looked at that and gone, “I bet if I called a bunch of friends, they don’t want to do this with me,” but I don’t have a vehicle to do that. An example of that is MOSH, which is Patrick Schwarzenegger and Maria Shriver’s brain bar company. It’s crushing it and go figure, Patrick gets White Lotus. It has become a phenomenon and now it’s skyrocketed. They’re going to raise another round soon, so we’re looking at that as a good example. We have all this access and all this opportunity. Why not bring this to our network, our friends or our audience and work with them on it and be able to take bigger slugs of these deals? That’s the why.

The why is it’s one of those funny things where we have this opportunity and now, we want to be able to take advantage of it aside from me just running my own personal check into it. That’s where it comes from. In terms of what you experience, it’s basically a newsletter. You sign up, confirm your accredited investor and the point you want to make an investment. You have to go through all the legalese in AngelList because that’s what we’re using for it and it’s deal by deal.

We’re going to share deals as regular as we see a good deal. It could be every week. It could be not for months. It just depends on how often we run in a good deal. The nice thing is because it’s not committed capital, there’s no urgency and no rush to deploy because I’m going to put money in all these. If there’s a deal that we’re excited about, then let’s go do it and let’s open it up to our network. It’s non-committal. There is no commitment. If you want to watch and see what we invest in, people can do that. The goal for us is to be able to go to great companies and be able to raise as much money as they need when we like the company and do it within a day.

It’s already a first come, first serve. We had a few people miss out on the last one. We close them quickly. The last one, we had completely closed within a week. Send it in, get it done, deploy the money, move on to the next one and then obviously report against it. Watch it and see how these go. The idea and the mission there is to be able to take full advantage of all the deal flow that we get and put the money to work.

Positive Aspects Of The Venture Market Today

Each one of the deals in the deal network, we’re going to be separate SPVs investing in those companies? Is that going to be structured? Any final thoughts you want to share about the state of venture and the state of marketing now?

It’s been hard for a few years for these companies. Since early ‘22, it’s been getting better. The nice thing is Hawke Media from the marketing side is the canary in the coal mine in both ways. We’re seeing more proactivity from founders. I’m starting to see more growth there. The whole economy is driven by fear and greed. We’ve been in this cycle of fear. I don’t know how long you can talk about a recession coming before it just gets ridiculous, but it’s been five years since the recession doc. I would argue that I’ve looked a lot at this data a lot of time. Mid ‘22 to early ‘23 to me was a recession. We had negative GDP growth. The employment numbers, I don’t want to say weren’t falsified, but they were misleading.

Most of the employment growth we saw was part-time jobs taking away from full-time jobs. We had a full-time job decline from the mid ‘22 to early ‘23. If you looked at it in a more the traditional sense, we had a recession and we’re now coming out of it. How I look at this optimistically is, I think we’re in like 2010 from the GFC. What we deal with in ‘22 is nothing like 2008. Don’t get me wrong but we’ve hit in week 24. We hit that like, “It’s not diving. There’s still some shaking us but trying to come back.” In ‘25, we’re seeing some growth. This tariff stuff shook people up and it still is. The market was all over the place and it’s back up. It’s annoying.

We’re in year five of unprecedented times and they’re just sick of using it as an excuse. Most of the founders that haven’t already given up are now the people that are like, “I don’t want to hear about it anymore. Move on.” We saw that with tariffs, where again, marketing over 500 companies and out of all of them when the tariffs hit, 4 out of 500 clients said anything about it and the rest are like, “We’re going to have to adjust some of our supply chain but moving on, it’s another thing, walking and running a business.”

That all being said, we’re getting towards an upswing here. I’m confident in the next couple years that we’re going to start seeing the exit velocity again, which then brings the money back into it. Investment starts picking up. There’s a quote everybody knows that does any investing from Charlie Munger, which is, “Be greedy when others are fearful.” Except for when everyone’s fearful, people get scared. It’s funny to watch. You forget that when it’s the time to remember that. For me, I’ve remembered it and we continue to invest.

We never overpay. We just passed on a deal that was like 40 times revenue. It’s a great deal but I’m like, “It probably should be fifteen times.” You took away almost 3X minus returns right away. You just mitigated my upside. I’m not doing that. We’ve just stayed at some point on the way we invest and never got caught up in hype and because of that, most of our deals have done well. Whenever the next cycle of exits comes in, we’ve got some deals that are doing well. One of our best investments I talked to is like, “We’re going to get dinged on valuation just because the only guys getting good valuations are the Fang companies and everyone else is getting danged.”

We don’t need the money, so we’re not going to do anything. When we think in the next year or two, that’ll turn around and then we’ll start looking. Thankfully, the private equity world, the VC world, the public markets and all these finance people got to put money to work. At some point, it’s almost a game of chicken both ways where when the market’s coming down, the founders wait and wait and then the worst companies have to do something. They end up making it look like there’s this big trough because they had to take money at a bad time.

The same thing happens on the upswing like funds wait. They’re like, “We’re not going to pay that.” All of a sudden, they can’t get into any deals because they missed all the good ones. They go, “Screw it,” and then everyone starts paying a lot. That swing will come in the next couple years. It’s hard to predict. There’s no crystal ball, but it’s been one of the longer slowdowns in a long time when it comes to this investing. We’ve already seen the markets at all-time highs. We’re at this point now where greed will probably start to kick in because so many investors realize they already missed a lot of things.

Talk about some of the folks you’ve co-invested with. Obviously, there have been many but anyone that we can talk about?

Kleiner Perkins, Sequoia, A16Z, Greycroft, Greylock, Upfront and a lot of the big Venture funds. I’m trying to find that sheet but we have a list somewhere of all the different funds we’ve invested in and it’s sizable.

Again, the Hawke Deal Network. We’re going to be posting this on the Emerging Manager show. Erik was one of our first guests several months ago. I wanted to let everyone know about the deal network. If you want more information, you can go to HawkeDealNetwork.com or you can reach out to me and I’d be happy to get you contact with Erik and his folks. Erik, thanks for being on the show. I appreciate it.

Thank you. Thanks for having me, Scott.

Important Links

• Erik Huberman
• Erik Huberman on LinkedIn
• Erik Huberman on Instagram
• Hawke Media
• Hawke Ventures
• Hawke Deal Network
• Verizon
• Red Bull
• HP
• FabFitFun
• PATH Water
• Postscript
• Hawke AI
• Gumshoe AI
• Cursor
• Lovable
• Heatmap.com
• MOSH
• AngelList