The Up Round #24

Hola! Welcome to issue #24 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 spent a couple days this week in Washington DC at the Rise of the Rest Summit which always brings together a good group and some high quality guests including Afsaneh Beschloss, Co-founder and CEO of RockCreek as well as Josh Harris, Co-founder of Apollo and Co-founder and CEO of 25North (as well as sports tycoon). Below are some of my notes from the program:

• Remember as a VC, you need to have a clear comparative advantage. Why are you the best person in the room (or on the world) relative to a particular subject? This is what you get money from LPs for
• In Afsaneh's mind, endowment CIOs seem disconnected from reality when it comes to sustainability. Their view that climate isn't a place they can make strong returns is driven by historic biases that are nonsensical. The past does not necessarily reflect the future
• Josh shared his perspective around building a strong investment firm, regardless of whether it is VC or buyout. Leaning-in, his view of culture at a firm requires a flat structure, over-promoting people and heaping on responsibility on great people, having a mission, working really hard, and trying to involve everyone so the firm as a whole can compete better

This doesn't necessarily include tid bits from many of my side conversations that will add to the growing back log of "stuff" I want to write about this summer.

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What I'm Reading

Chris Harvey on the State of VC in Q1 2024 (link). Some great data that was compiled from both Carta and Aumni (pronounced Omni) data sets.

The Vertical SaaS Profit Premium (link) by Omar and Nic at Euclid Ventures. A thoughtful break down to answer, "Why does the market pay more for a dollar of vertical SaaS profit?" I thought it was interesting that despite having slightly lower growth, dominance, stickiness, and GtM efficiency help vertical SaaS companies trade at a premium.

Do Accelerators Improve Startup Success Rates? (link). I am a bit skeptical of the traditional accelerator model these days apart from YC and a select few programs. In total that list probably totals five. This study led by two two Wharton professors suggests that accelerated companies grow faster than peers but I'd be the first to say that it's not because of pitch competitions or learning sessions. I do think networks and/or industry specialization is where my favorite accelerators excel.

📽️ The Untold Stories of YC with Jessica Livingston (link) via Jon Bradford at Dynamo. This is just all-round good. I'm not going to try to summarize it but I particularly loved 1) Jessica's return home to Boston; 2) loving events- I often joke that I moonlight as an event coordinator despite being a VC; 3) meeting Paul Graham.

VC Isn't Shrinking, It's Not Growing Either (link). Looking at April 2024 Crunchbase data, it looks like $22B was invested in startups, globally with 11% ($2.4B) going to 1k seed stage startups. Early stage (or what I'd dub Series A) and growth stage appear to be chugging along - flat to last year. At this pace, are we due for a massive drop off in seed to Series A graduation rates? Note that Carta data suggests seed to Series A graduation rates from the last year are down to 12% (vs a high of 37% in 2020).

Fund Debuts

Apeiron Ventures Launches with $25M for GenZ and B2B (link). The fund will write €300k - €1M investments in 20-25 European startups. It noted a preference for founders as part of the Greek diaspora. The fund's focus is on teams targeting enterprise and the Gen Z Economy.

Starshot Capital Debuts with $35M Fund (link). The firm is founded by Jeremy Brewer, who’s worked at Google and Facebook, and Sam Levac-Levey, who spent time at Tesla and SpaceX. They will focus on startups building climate solutions in food and agriculture, industrials, manufacturing, and buildings at the early stage (I'd assume they do pre-seed and seed based on fund size).

Saga Ventures Confirms Fund I at $125M (link). As we mentioned in Issue 23, Saga Ventures is led by Max Altman, Ben Braverman, and Thomson Nguyen. The new fund will co-lead or lead seed rounds with $2M checks across 30 companies. It's interesting to note that Max mentioned the desire to get some "breathing room from the family name" as he starts his own firm.

Laude Ventures Seeking $75M, Led By Pete Sonsini, Andrew Krioukov, and Andy Konwinski (link). This is a who's who of names given Pete's background at NEA, Andrew's background building Antimatter, and last (but not least), Andy's experience founding databricks and Perplexity AI. It's also refreshing to see some sober fund sizes despite the pedigree of this founding trio.

Other Fun(d) Stuff

Norrsken VC Raises €320M to Double Down on Impact Entrepreneurs (link). The fund has the backing of LPs including AP1, Folksam, Saminvest, KfW Capital and the Ireland Strategic Investment Fund (ISIF) as well as Credit Suisse/UBS, Investcorp-Tages, BMW, SEB-Stiftelsen and Nordea. The raise makes Norrsken the largest generalist, impact investor in Europe with every investment having a strict environmental or social objective linked to both UN objectives and EU reporting requirements.

Accel Has $650M of Fresh Capital to Back European Startups (link). The fund will continue it's strategy of investing $1M-$20M across 30 companies at seed and Series A. FWIW, it appears that Accel is looking to push more into seed on the back of an expanded scout program that launched in 2021 with 20 scouts vs 40 scouts, today.

Roundtable Launches New Micro Fund Formation Tool for EU (link). I found this tool to be novel for the European market where we knoew plenty of micro funds or business angels. In the US market, I'd assume this is akin to Angellist's Syndicates and Fund Admin offering.

Master Investor List of Lists of VCs (link) by Ruben Dominguez at Mundi Ventures. This is a great reference if you need to fund investors for a round or "someone smart" on a particular subject.

Talent Tracker

Former GV Partner, Terri Burns Launches Type Capital (link). Terri was the youngest Partner at GV and has setup her own pre-seed/seed firm on the back of her "deal heat" thesis which distills to finding founders early. It's unclear where she is on the fundraising journey.

Fika Announces that Eva Ho Will Step Back After Fund III (link). At its Fika Summit, the firm announced that Eva who co-founded the firm will step back after the current fund is deployed. She will still continue supporting her existing portfolio companies and maintain her Board roles.

Warda Shaheen Joins Axa Venture Partners as General Partner (link). Warda will help oversee the €1.5B late stage fund that invests in companies a few years from IPO with the ability to hold-on into their journey as a listed organization.

Serena Ventures Seeing Leadership Transition (link). The VC founded by Serena Williams is hiring Beth Ferreira who was previously a GP with FirstMark Capital. Allison Rapaport Stillman who helped found the firm has left.

Next Coast Ventures Promotes Four Team Members (link). The promotions include: Kaitlyn DeBernardo to COO; Michael Maloney to Principal; Michael Tian to VP; and Julia Holmes promoted to VP of Finance.

LP Radar

Hoards of European VCs are Hunting for LPs in The Gulf (link) and related, Meghan Reynolds at Altimeter shares thoughts on the topic. Similar to their US peers, European VCs are showing up in The Gulf region to fill the gap left by LPs in their local markets. As common with all things related to LPs, this stuff tends to be secretive but of late several funds have made moves worth noting: SpeedInvest w/ a Gulf-based Partner, Antler is doubling down on programs in the region, and FoF VC Singular raising from Mubadala. It's clear that competition is heating up and money isn't falling off trees as it might be perceived to be.

Melinda French Gates Leaving The Gates Foundation (link). This likely does not come as a surprise to anybody compared to the additional $12.5B that Melinda will leave the foundation with. I would suspect a meaningful part comes back to support her initiatives in supporting and backing under represented VCs and founders.

UPS Strikes Deal with Goldman Sachs for $43B of Pension Assets (link). As part of the deal, the UPS pension investing team will join GS by Q3 2024 when GS will close the deal to become the OCIO for the asset pool. This continues a trend of corporates with large defined benefit programs offloading the management to specialists.