From coding tests to billion-dollar startups, Ali Partovi’s eight-year experiment is showing results

Ali Partovi’s venture firm Neo is transforming venture capital by focusing on individuals.

: Ali Partovi, co-founder of Code.org, built a venture firm called Neo that rethinks venture capital by nurturing individual talent in college. Neo invested in promising startups like Bluesky, valued at $700 million, and Anysphere, with a $10 billion valuation. The firm prioritizes exceptional technical ability, entrepreneurial spirit, and challenging norms under its Neo Scholars program. Neo maintains a selective approach and recently secured $320 million with increased personal investment from Partovi.

Ali Partovi, an influential figure with roots in Silicon Valley’s inner circle, is known for his significant investments in technology giants such as Facebook and Airbnb alongside co-founding notable startups like Code.org. In recent years, his venture firm, Neo, has emerged as a game-changer in how talent is scouted, providing evidence that Neo’s philosophy for discovering stars is impactful. Neo’s strategy departs from traditional themes, focusing on individual potential, especially targeting students in their nascent stages of development.

Neo’s early actions demonstrate success in predicting and backing early-stage startups destined for significant milestones. For instance, the firm’s early investment in Bluesky—a decentralized social network that emerged after Twitter—has already seen valuations of $700 million. Similarly, Kalshi, an online prediction market that gained traction during the U.S. presidential election, underscores Neo's knack for identifying potential in evolving markets. Such initiatives typify Neo’s selection methodology, often relying on coding tests and in-depth discussions rather than conventional strategies.

Neo places significant emphasis on mentoring potential founders through initiatives like the Neo Scholars program, which provides $20,000 grants to around thirty students annually, with no equity in return. This philosophy is reminiscent of Partovi's approach with individuals like Michael Truell, who, after a pivotal meeting and successful coding assessment, co-founded Anysphere. Anysphere's AI-powered product, Cursor, is a testament to Neo’s predictive success, potentially driving its valuation to $10 billion.

Partovi's selection model is pivoted around four traits: technical ability, entrepreneurial passion, status-quo-challenging mindset, and personal magnetism. This selective process has attracted a pool of talent with Neo Scholars going on to found successful firms like Cognition, valued at $4 billion, and Pika Labs, notable for its generative AI innovation. Partovi believes such qualities are pivotal for visionaries akin to Jeff Bezos and Reed Hastings, aligning technical skills with a transformative mindset.

Though Ali Partovi's Neo is resonating within the venture capital landscape, it remains committed to its selective philosophy, highlighted by deliberate fund sizes and controlled expansion. Neo recently garnered $320 million, slightly more than its previous $235 million fund, reiterating its dedication to quality over quantity. With backers like Sheryl Sandberg and Bill Gates, Neo's growing influence is matched by its early-stage fund's promising returns, signaling continued support for genuine innovation.

Sources: TechCrunch, Forbes, Bloomberg, Business Insider, Crain's New York Business

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