Pre-seed and seed corporations have a brand new bucket of capital to go after right now. Twelve Below, a New York-based enterprise capital agency, closed on $108 million in capital commitments.
Taylor Greene and Byron Ling began Twelve Under in 2021 after earlier careers at Collaborative Fund and Lerer Hippeau for Greene, and Canaan and Main Enterprise Companions for Ling. Nonetheless, the pair have recognized one another and labored on offers collectively for a decade, together with investments into Mirror, Papa and Okay Well being.
Greene and Ling informed TechCrunch their philosophy is paying homage to the “old ways of venture capital.” They are saying it’s about belief — maintain your fund measurement small, excessive conviction, excessive possession and make a low variety of investments.
“Our mentors told us that this kind of old-school approach will drive great returns,” Greene mentioned. “We started with a blank piece of paper, designing the firm around that mentality based on relationships and trust with entrepreneurs.”
Twelve Under goals to steer or co-lead pre-seed and seed financings with the aim of incomes a ten% to fifteen% possession stake within the core investments from the fund. The agency invests in New York Metropolis-based startups within the areas of fintech, healthcare, power, SMB and shopper sectors.
Its first fund was $50 million, and the portfolio contains Accrue Savings, Odyssey Energy, Croissant, Campus and Truehold. Greene and Ling tout that over 60% of their portfolio has already gone on to lift follow-on capital.
Greene and Ling say their large differentiator is their give attention to belief. In addition they don’t have a platform group, so the founders work straight with them.
“We think trust is what underpins the ability to truly know what’s going on in business but also have an outsize impact,” Ling mentioned. “Their success and our success are very much intertwined. We’ve been very deliberate in that model because we think founders truly want personalized attention with an individual trusted partner, which is very different and why we’ve resisted the model of having a platform team and having all these different individuals that could potentially fragment that relationship over time.”
The brand new capital is unfold throughout two new funds, $80 million for its second early-stage fund and a $28 million alternative fund, giving the agency whole property below administration of $160 million. The agency is backed by entities, together with giant college endowments, institutional fund of funds and enormous household workplaces.
It was its giant variety of portfolio corporations going after follow-on capital that acquired Greene and Ling considering of how they may additional assist their corporations. Greene described the chance fund as “a little bit unique.”
“It just invests in our existing companies,” Greene mentioned. “We saw this disconnect in the market where we’re very excited about pricing, especially as we follow on into our existing companies. Pricing is, from a risk-reward perspective, seems great. We’re also very excited about how the portfolio is shaping up, so it gives us the ability to put more money into our existing companies.”
The pair invested in 21 corporations with its first fund and plan on round 25 for the second fund and between 5 and eight corporations for the chance fund. They haven’t made an funding but from the second fund, however say that’s coming early subsequent yr.
