Notation Capital, the NY-based pre-seed fund that launched in 2015, has simply picked up a contemporary $27 million in capital to put money into to tremendous early stage startup sin the NYC space.
The fund is known as Notation II, and it’s nonetheless run by Nick Chirls, who led seed funding at betaworks and helped construct Alphaworks, and Alex Traces, an architect at betaworks who contributed to merchandise like Digg, Chartbeat, and bit.ly. Alongside the greater than tripling in dimension of the second fund from the primary, there’s one other distinction to be made: Chirls and Traces wish to avoid the time period pre-seed and go together with “first-check” funding as a substitute.
“To today, we discover that founders are nonetheless confused on tips on how to navigate the early-stage funding panorama,” mentioned Nick Chirls. “The early-stage panorama has splintered into hundreds of thousands of various financing, from seed corporations, pre-seed corporations, angels, scout funds, and accelerators. It’s introduced extra questions than it has solutions. The clearest messaging for us is that we wish to be your first test. You possibly can name it pre-seed or seed or angel or no matter you need.”
When Notation Capital first launched, it was primarily based on a number of core premises. The primary was that the NYC tech ecosystem would proceed to develop. The second was that conventional early-stage corporations would proceed elevating bigger rounds and writing greater checks, transferring into later stage rounds. The final was that NYC doesn’t have the identical deep pool of angel traders as SV.
As we’ve seen from the Collection A Squeeze, that premise appears to be fairly correct.
With Notation I, the agency wrote 28 checks, with solely two financings going exterior of the NYC space. The typical test dimension was about $200Ok as a part of a spherical from $500Ok to $1 million whole. Notation II goals to fund the identical quantity of corporations, however with checks between $350Ok and $400Ok for a similar dimension rounds, which is able to go away reserves for follow-ons.
Notation II additionally goals to serve different non-SV ecosystems alongside the Japanese Hall, investing in expertise in Toronto, Boston and D.C. That mentioned, Chirls mentioned he expects between 80 and 90 % of funding to go to the NYC space.