Today we are deep-diving into the newest trend in venture funding: Rolling Funds.
.@AngelList’s rolling funds is about to eat venture capital.
— Norgard (@BrianNorgard) August 13, 2020
What is a Rolling Fund?
Rolling Funds were created by AngelList in tandem with Wilson Sonsini Goodrich & Rosati earlier in the year. Hence the name, these funds allow for “rolling” fundraising, via the form of quarterly subscriptions from LPs.
"The huge benefit for a fund manager is that they can raise money incrementally, one investor at a time, rather than having to do a one-time, big-bang fundraise and then lock the fund for four years" - Naval Ravikant, AngelList's founder and chairman.
Rolling Funds allow for fund managers to:
- Raise a much smaller portion of a traditional fund to start
- Begin deploying capital into companies immediately
- Leverage portfolio markups to accept new money from LPs, anytime
- Increase the fund size as the fund ages, so the fund managers never need to raise another fund again
Exclusive: AngelList has launched the "Rolling Venture Fund," a new product that aims to eliminate the need to fundraise for emerging VCs https://t.co/0ChZraOqN7
— Alex Konrad (@alexrkonrad) February 5, 2020
What does this mean for Venture Capital?
1/ After reflecting for a while on @AngelList's rolling funds, I believe they will be very disruptive.
— Leo Polovets (@lpolovets) August 11, 2020
Previously the best way to start a VC fund was to build an investing track record. That takes many years. Rolling funds allow people to turn reputations into investing capital.
The common entry into Venture Capital is as follows:
- Build a company as a founder or early-stage employee
- grow at tremendous rates
- have an exit via IPO or M&A
- Start Angel investing, build a track record
- Join a Venture firm as a Venture Partner
- Become a GP / Start your own fund after a track record of success
Venture investing for most people without a background in startups or banking/private equity is a seemingly unattainable goal - or at least it was.
Now with Rolling Funds, the barriers to entry have been lowered significantly. One need only register as a GP and begin soliciting subscriptions to the fund, and can start doing deals ASAP.
This will mean more GPs, more funds formed, and more capital deployed, but likely in smaller and smaller chunks.
Similar to the rise of syndicates, micro funds, and crowdfunding, we see Rolling Funds as a catalyst for bringing more and more people onto
With Regulation Crowdfunding growing rapidly through COVID & the launch of @AngelList Rolling Funds, there is a lot of innovation in startup capital raising right now.
— Jonny Price (@JonnyCPrice) August 17, 2020
It will be interesting to see if VCs embrace the disruption of their own sector, as they do that of others.
What does this mean for startups raising capital?
AngelList is billing Rolling Funds as “Always Open Venture Capital” - this means that when you’re raising from a rolling fund manager, there might be fewer hurdles for getting the first check in the door.
As any founder or ‘want-reprenuer’ knows, often the most difficult part of fundraising is getting the first check written.
We think with more flexible access to capital and potentially streamlined closings, early-stage founders will reap the benefits of more investors looking to write potentially smaller checks than typical venture investors.
Rolling Funds that have been launched and are looking for investments:
CapitalX Is Live via AngelList Rolling Fund! https://t.co/QzujPa5Mc4
— Cindy Bi ㊙️ (@CindyBiSV) August 6, 2020
Proud to be part of @AngelList family for the launch of the W Fund with @Just_Kate. We've built the largest pipeline of women-led #startups and can't wait to back many of them! https://t.co/ZOTr65i4Cg via @MaxJungreis #femalefounders #changetheratio #VC #womenintech
— Allyson Kapin (@WomenWhoTech) August 15, 2020
Occasionally I angel invest in tech startups, including @LambdaSchool, @figmadesign, @HelloSign. I’m also an LP in @Backstage_Cap.
— Sahil (@shl) June 1, 2020
My next investment will be in a Black founder. If you are one, please send me an email this week about what you’re working on: [email protected]
Further Reading
- https://angel.co/blog/rolling-venture-fund-launch
- https://techcrunch.com/2020/07/22/diaspora-ventures-explains-how-angellists-rolling-venture-funds-work/
Deal News 8/8-8/14
Seed
- Atomo Coffee raises $9,000,000, led by Horizons Ventures, S2G Ventures | Atomo Coffee is a developer of molecular coffee.
- Elisity raises $7,500,000, led by Atlantic Bridge | Elisity is the pioneering zero-trust networking and software-defined access company.
- WayScript raises $5,000,000, led by Greycroft | WayScript is a software company that offers a visual programming platform that helps build software tools, workflow automation, and data sets.
- Cube raises $5,000,000, led by Bonfire Ventures | Cube is a financial planning and analysis platform that empowers finance teams and businesses.
- Mighty raises $4,300,000, led by Slack Fund | Mighty Labs helps to manage teams and motivate people in flexible, remote, or fast-paced team environments.
- Compaas raises $4,250,000, led by Core Ventures Group | Compaas is an intelligence platform that helps growing companies make smarter decisions around compensation.
- The Demex Group raises $4,200,000, | The Demex Group is a technology company that customizes and delivers climate-resilience through financial risk solutions on a global scale.
- Merico raises $4,100,000, led by GGV Capital | Merico develops code analytics tools to support engineering teams in understanding and optimizing productivity and code quality.
- Stacklet raises $4,000,000, | Stacklet is a cloud governance company that provides operational efficiencies.
- Joblist raises $4,000,000, | Every job search is different. Joblist helps anyone find the right job for them.
- Trala raises $3,500,000, led by Next Play Ventures | Trala is a developer of a music education application used to teach users to play the violin.
- Allergy Amulet raises $3,300,000, led by TitletownTech | Allergy Amulet is the world’s smallest and fastest consumer food allergen sensor, testing for common allergenic ingredients in seconds.
- Symmetry Systems raises $3,000,000, led by ForgePoint Capital, Prefix Capital | Symmetry Systems is a platform that detects, respond, and protect against data breaches.
- The @ Company raises $3,000,000, led by | The @ protocol is a distributed system, like DNS, but for people so that they can own their own digital selves. Axle raises $2,700,000, led by Anthemis Group | Axle provides small brokers and their carriers with efficient and honest working capital to sustain the global logistics industry.
- Blumira raises $2,600,000, led by | An end-to-end automated detection & response platform that is easy to deploy and use. Designed for organizations of any size.
- ClearCam raises $2,600,000, led by Frank Barbella | ClearCam provides clinicians with innovative tools and technologies that improve their vision and skill in the operating room.
- SMBX raises $2,500,000, led by Better Ventures | SMBX is a funding portal and public marketplace for issuing, buying, and selling U.S. small business bonds.
- Warmly, raises $2,100,000, led by NFX | Warmly, is a platform that connects vetted professionals via actionable business cards.
- LitLingo raises $2,000,000, led by LiveOak Venture Partners | LitLingo provides an A.I. platform that reduces business risk, improves culture, and saves money with every communication sent.
- GoPeer raises $2,000,000, led by Ed Baker | GoPeer is a platform that connects K-12 students with vetted college undergraduates for in-person and online tutoring lessons.
Series A
- Pattern raises $52,000,000, led by Ainge Advisory, KSV Global | Pattern operates as a worldwide e-commerce growth, protection, control, and distribution platform for brands.
- High Definition Vehicle Insurance raises $16,000,000, led by 8VC, Munich Re Ventures | High Definition Vehicle Insurance offers insurance products to small and mid-size trucking fleets.
- GoSite raises $16,000,000, led by Longley Capital | GoSite provides a cloud-based software suite that helps small businesses stay connected with their customers.
- RevenueCat raises $15,000,000, led by Index Ventures | RevenueCat is an in-app subscription platform that makes it easy to build and manage app subscriptions.
- Stream raises $15,000,000, led by GGV Capital | Build chat and feeds for your applications at scale in a fraction of the time and cost of developing in-house.
- Routable raises $12,000,000, led by | Routable provides service to send and receive business-to-business payments.
- Bodyport raises $11,200,000, led by | Bodyport is the platform for health in the home.
- Eggtronic raises $10,000,000, led by Rinkelberg Capital | Revolutionary micro-sized and eco-friendly AC/DC & DC/DC power converters - inductive and capacitive wireless charging & data technologies
- Fyllo raises $10,000,000, led by JW Asset Management, K2 & Associates | Fyllo offers compliance cloud enterprise-grade software and database services for the cannabis industry.
Series B
- Atomwise raises $123,000,000, led by B Capital Group, Sanabil | Atomwise develops artificial intelligence systems using powerful deep learning algorithms and supercomputers for drug discovery.
- Dyne Therapeutics raises $115,000,000, led by Surveyor Capital, Vida Ventures | Dyne Therapeutics is a developer of targeted therapies intended for serious muscle diseases.
- Thirty Madison raises $47,000,000, led by | The human-first health company bringing specialized care and treatment to everyone.
- Omaze raises $30,000,000, led by FirstMark | Omaze is an online fundraising platform that offers once-in-a-lifetime experiences and prizes to support nonprofits around the world.
- Reify Health raises $30,000,000, led by Battery Ventures | Reify Health is a cloud-based software company that develops tools for the clinical trial ecosystem.
- Eden Health raises $25,000,000, led by Flare Capital Partners | Eden Health is a primary care and insurance navigation company for employers seeking to elevate the health and wellbeing of their employees.
- Arevo raises $25,000,000, led by Defy.vc, GGV Capital | Arevo develops technology to enable direct digital additive manufacturing of parts for end-use applications in high volume.
- TearClear raises $22,000,000, led by | TearClear is a pharmaceutical company that specializes in providing disruptive eye health technology.
- Cecelia Health raises $13,000,000, led by Endo Investors, Rittenhouse Ventures | Cecelia Health is a health-tech company that connects clinical coaching and proprietary technology with people living with diabetes.
- Hiretual raises $13,000,000, led by Oceanpine Capital | Hiretual is an AI-driven HR technology company and sourcing tool throughout the recruiting community.
- Oomnitza raises $12,500,000, led by Riverside Acceleration Capital, Shasta Ventures | Oomnitza is an IT company that provides a single place to track and optimize everything that powers a business.
- springbig raises $11,500,000, led by TVC Capital | springbig provides leading loyalty, digital communications, and CRM for the cannabis industry
- Simpplr raises $10,000,000, led by Norwest Venture Partners | Simpplr is a provider intranet software platform for companies to engage with and manage employees.
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Series C
- PayActiv raises $100,000,000, led by Eldridge | PayActiv offers a holistic financial wellness platform for employees.
- Coda raises $80,000,000, led by Kleiner Perkins | Coda is a new document that brings words, data, and teams together.
- Mission Bio raises $70,000,000, led by Novo Holdings | Mission Bio develops only single-cell multi-omics platform integrating genotype and phenotype for cancer research and biomarker development.
- Mux raises $37,000,000, led by Andreessen Horowitz | Mux Video is an API that enables developers to build unique live and on-demand video experiences.
- Nurx raises $22,500,000, led by Comcast Ventures, Trustbridge Partners, Wittington Ventures | Nurx is a healthcare company offering at-home STI testing allowing treatment for genital and oral herpes, and emergency contraception.
- mPulse Mobile raises $16,000,000, led by Optum Ventures | mPulse Mobile, the leader in mobile health engagement, drives improved health outcomes and efficiencies by activating healthcare consumers.
Series D
- Gong raises $200,000,000, led by Coatue Management | Gong.io is a revenue intelligence platform that delivers insights at scale.
- Skillshare raises $66,000,000, led by OMERS Growth Equity | Skillshare is an ed-tech platform offering online learning for creative fields.
- Parsable Raises $60,000,000, led by Activate Capital Partners, Glade Brook Capital Partners | Parsable offers a connected worker platform for industrial workers with modern digital tools to improve productivity, quality and safety.
Series E
- Fanatics raises $350,000,000, led by Fidelity National Financial, Thrive Capital | Fanatics design, manufacture, and distribute high-quality fan gear and jerseys across retail channels.
- Trumid raises $200,000,000, led by Dragoneer Investment Group | Trumid is a financial technology company bringing efficiency to credit trading through data, technology, and innovative products.
- SiFive raises $61,000,000, led by SK Hynix | SiFive is a platform offering open-source semiconductor technology and software automation.
Series F
- Blend raises $75,000,000, led by Canapi Ventures | Blend is a SaaS platform for lenders to speed up and simplify applications for mortgages and consumer loans.
Sources: Crunchbase, AngelList, Twitter, LinkedIn
