The Up Round #19

Hello and welcome to the 19th issue of The Up Round! As a reminder, this is a summary of relevant news and firm-building resources for VCs. Expect us to land in your inbox every other weekend.

I'm heading to spring break with my kids so keeping it brief. While I'm out, expect at least one new resource drop this week. Working to deliver on the promise of shared resources for those on the journey to VC greatness. Also, I'm thinking of ways to make this more useful and practical. Any feedback would be welcome - iterations are the key to success.

🙏 Do me a favor, if you find this content valuable, forward this on to a friend or share it on social media.

X’s & O’s of Firm Building

VC Performance Benchmarks by AUM (link). While I'm unclear what the source of this data is, it's pretty powerful to see the return benefits of smaller funds (up to $30M) in VC. What's interesting is the band of funds between $101M and $250M that post performance rivaling their nano-fund peers.

Why We Don’t Believe in "VC Value Add Services" or Platform Teams (link). Slow Ventures shares their philosophy and reasoning as to why they simply focus on: 1) giving startups money; 2) helping them raise more money; 3) help founders becoming better investors (I read this as capital and time allocators).

The Dumber Side of Smart People (link). Read this. My thoughts as a VC are: 1) it's important to be self aware and intellectually honest, 2) having partners one respects enough to have robust conversations with is key, 3) don't be too smart for your own good- remember this by trying to learn new things, constantly.

Fund Debuts

Entourage Launches $30M Fund/Studio (link). Entourage is founded by Showpad co-founder, Pieterjan Bouten who wants to support the next generation of enterprise SaaS founders in Europe. The fund will invest through Series A.

COTU Ventures Raises $54M Fund I (link). COTU (not to be confused with Coatue) stands for Champions Of The Underdog focuses on backing pre-seed and seed stage founders in MENA with a first check of $500k-$1.5M. LPs include Lunate, Mubadala, Dubai Future District Fund, Arab Bank, Bupa KSA, and GPs from VCs, including Foundry Group, Tribe Capital, Stride, and several family offices.

Zacua Ventures Closes $56M Debut Fund (link). Backed by 19 different corporate LPs from the construction industry including Procore, Volvo, and Cemex. Zacua invests in seed stage startups building technology for the construction industry.

Other Fun(d) Stuff

Artemis Fund II Has $36M to Fund Diverse Founders (link). Artemis leads seed rounds in fintech, commerce and care. To date, it has invested in 20 companies, all led by female founders and >60% having Black, Latinx or immigrant leadership. It has backing from Bank of America, Bank of Montreal, TIAA Nuveen’s Churchill Asset Management, Texas Capital Bank, Amazon, The Rockwell Fund, and Ballentine Partners.

Prudence Closes $80M for Third PropTech Fund (link). This fund compares to the previously unannounced $65M Fund II closed in 2020. Fund III has made three investments to date. As an overview, Prudence leads rounds from the pre-seed to Series B stage and seeks to have a portfolio of 10-15 companies per fund.

Commerce Ventures Raises Oversubscribe Fifth Fund at $150 (link). Commerce invests in both retail and financial services and leverages it's unique LP base of strategics including nine banks, two retailers, three insurers, and the world's leading payment platforms. Institutional LPs include Franklin Park, Industry Ventures, and StepStone Group.

Inspired Capital Announces Fund III at $330M (link). On the fifth anniversary of the firm, Inspired announced it's final close on fund three to focus on "fearless founders who are solving the hardest challenges facing humanity". It will write $1-15M checks in pre-seed to Series A startups.

Team8 Closes $500M in Fresh Funds (link). The new funds will be deployed across both the studio and traditional seed/Series A fund. The firm focuses on cyber, data infrastructure, AI, fintech, and digital health startups. The announcement marks Team8 now managing $1B in AUM.

Spark Closes $2.3B Across Core and Growth (link). The new funds (Capital VIII and Growth V) are roughly in-line with Spark's prior funds. It's interesting to also read- "We prefer to roll our sleeves up with entrepreneurs rather than outsource this partnership to a support team." Given the seemingly "hands off" approaches to investing over the last three to four years.

OpenView Returning 75% of Newest Funds Back to LPs (link). Putting a bow on what's ended up being a very public generational transfer, gone awry, OpenView will only retain $140M of the $571M it raised last year. The funds will go to back stands outs from it's portfolio of 30 active companies.

Talent Tracker

Miles Grimshaw Returns to Thrive Capital (link). After three years at Benchmark, Miles is making a homecoming of sorts in his return to Thrive Capital as General Partner. Miles' previous investments at Thrive include Airtable, Monzo, Benchling, and Lattice.

Sam Blond Departs Founders Fund (link). "Full time investing / being a VC isn’t the right fit for me and I’ve decided to go back to operating. More on what’s next for me later."

Eclipse Hires Jiten Behl as Partner (link). Jiten joins from Rivian as Eclipse makes a further push into the world of manufacturing and transportation. He's also the third Rivian exec to transition into the world of VC.

LP Radar

Cendana Capital Hires Fernandina Ko as Director of Data Sciences and Strategy (link). Fernandina will help further efforts around data, data structure, and analytics. She has prior experiences in banking, consulting, VC, and startups.

Keeling Capital Targets $75M Climate FoF (link). Keeling will invest in 10-15 managers to build a portfolio of 250 companies focused on climate. It has closed roughly $10M and expects to have $20-30M closed by midyear. To date, Keeling has invested in three managers, all in North America. At full build-out, it expects that 75% of it's GPs will be North America-based.

SAIL Advisors to Outsource all Investment Functions (link). The 20 year old, Hong Kong-based family office of the Duty Free Shop founder, Robert Miller has begun the process to shutter all internal investment functions. Instead, and why I shared this, it plans to outsource management of the $2B portfolio to external managers with Blackstone in contention for the opportunity. Is this representative of a new future as the large PE platforms seek to hoover up assets in the family office space?

QIA Earmarks $1B for VC (link). The FoF strategy will focus on helping the SWF drive improved returns whilst also turning Qatar into a hub for the startup ecosystem. This effort is complemented by a $100M direct fund effort announced at Web Summit.

2023 NACUBO-TIAA Endowment Study (link). The 2023 study shows that while endowments enjoyed a 7.7% return last year, many had to increase withdrawals >8% YoY to support their core missions. Such liquidity needs stress smaller capital bases and as a result, they're unable to allocate heavily into privates like VC which can fuel the disparity between the haves and have nots. Digging into the data, endowments of $50M or less allocate <1% to VC whilst those >$5B are allocating nearly 13% to the asset class.