There’s a new fund on the block.
Avid Ventures, a venture capital firm led by former investors at General Catalyst and Bessemer Venture Partners, raised $68 million for its debut fund focused on early stage investments across the fintech, software, and consumer Internet space.
Led by former General Catalyst principal Addie Lerner and Bessemer Venture Partners investor Tali Vogelstein, the new firm has already invested in companies including fintech Nova Credit and payments company Rapyd. Lerner is the founder and managing partner of the firm, while Vogelstein is a founding investor.
In a competitive dealmaking environment where investors often lament over too much money chasing too few deals, Avid Ventures hopes to differentiate itself by purposefully eschewing the coveted role of lead investor—a position with the most ability among the group to negotiate the price of a deal. Instead, it plans to write smaller $500,000 to $1 million checks for companies starting around the Series A stage. Then, as the company grows, Avid aims to take on an outsize, hands-on role in helping the company operate, and hopefully, as the duo like to put it, “earn the right” to write a larger check or lead a later stage of funding.
“Our investing strategy is to write smaller checks alongside the lead investors and be disproportionately hands on,” says Lerner. Or, as she puts it, Avid tries to act “as an extension of their team. We’re trying to be collaborative [with the company and lead investors] so we don’t have to have sharp elbows or ownership targets.”
When female-focused coworking space the Wing, also an Avid investment, was hit hard by the pandemic, Lerner stepped in as a strategic financial adviser for about a month while the company’s then CFO, Diedra Nelson, was out on maternity leave. (Nelson later in the summer moved on to become CFO of Emerson Collective, Laurene Powell Jobs’ philanthropic organization. Coworking company IWG earlier this month acquired a majority stake in the Wing.)
While the fund itself is limited in size, Lerner says that Avid has the ability to invest up to $40 million in future rounds by tapping into the venture firm’s pool of limited partners, a group that includes Schusterman Family Investments and the George Kaiser Family Foundation.
The duo acknowledge it’s an expensive time to be an investor. Unicorns are plentiful these days, and valuations reflect that headiness. Avid is also actively constructing its portfolio in a way that it believes will offset the riskiness around high prices.
“We like to think about it not only in terms of valuation, but also in terms of the risk profile of what we are investing in,” says Lerner.
As part of the construction of the fund’s portfolio, Avid is looking to balance out the risk with a more diverse set of companies. While some early stage enterprise-focused companies may not yet have a mature revenue stream—say, Staircase, which provides tech for the mortgage industry—Avid seeks to balance the risk out with investments in, for example, payments, where companies are already steadily monetizing, such as Rapyd.
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