Main Enterprise Companions, a seed agency that invests solely in New York Metropolis startups, has raised a second fund of $100 million.
That focus is uncommon — even Lerer Hippeau, a agency that’s intently related to New York, makes some investments exterior the area.
Main’s Ben Solar (pictured above together with his co-founder Brad Svrluga) mentioned he’s betting, partly, on the New York workforce, significantly “the expertise that got here into the tech ecosystem post-financial disaster” — a shift that gave town extra gifted entrepreneurs, plus a expertise pool that they may draw from to construct their corporations.
In spite of everything, Solar famous that employment in New York’s tech sector grew by 57 % between 2010 and 2016.
He additionally mentioned that Main (previously referred to as Excessive Peaks Enterprise Companions) affords extra help and providers than many seed corporations — for instance, Cat Hernandez, Main’s companion targeted on “human capital,” has been immediately concerned in hiring practically 200 staff on the agency’s portfolio corporations. Main is ready to supply that stage of help with a workforce of 13 individuals, Solar mentioned, by leveraging native connections and experience.
The funding workforce has additionally grown, with the addition of Steve Schlafman as enterprise companion final month — Solar described him as “an excellent extremely networked man who has a very good nostril for expertise.” (When we talked to Schlafman previous to in the present day’s announcement, he managed to dodge a query in regards to the agency’s fundraising.)
“With a singular give attention to this market, we had been capable of construct an working and portfolio impression mannequin that gives concentrated, on-site help to our portfolio corporations in a method that wouldn’t be attainable throughout geographies,” Svrluga mentioned in an emailed assertion. “Elevating this second fund not solely provides us the capital to proceed to be a high-conviction seed spherical chief, however to proceed to develop our Portfolio Affect workforce in order that we may be a fair higher companion to our founders on their journey from Seed to Sequence A.”
Main’s method has resulted in some huge successes already, like Jet.com (acquired by Walmart for $three.three billion) and Coupang (valued at $5 billion). Even past probably the most attention-grabbing offers, Solar pointed to the truth that of the 15 corporations within the Main portfolio which have tried to boost Sequence A rounds, 13 of them have succeeded.
As a part of this announcement, VCs that Main has labored with up to now additionally provided their reward, with Spark Capital’s Kevin Thau describing the agency as a workforce that “is aware of the New York Seed market higher than anybody,” and Kleiner Perkins Caufield & Byers’ Eric Feng saying it’s “one of many prime companions to startups within the metropolis, offering true worth guiding their portfolio corporations from seed to Sequence A.”
Whereas the agency raised considerably extra this time round (Main’s first fund was $60 million), Solar mentioned it should stay targeted on seed offers — with the occasional incubated startup, like pet food firm Ollie. It is going to, nonetheless, be capable to write barely bigger checks, say within the $1.5 million to $2 million vary, with extra funding reserved for follow-on rounds.
“What we’re going to do with this $100 million is comply with the identical technique,” Solar mentioned.