early stage investors Version One, which includes partners Boris Wertz and Angela Tran, has dedicated its fourth fund, as well as the second Opportunity Fund, exclusively to follow-on investing. Fund IV collects $70 million from LPs to invest, and Opportunities Fund II has $30 million, both $45 million from Fund III and roughly $20 million from the original Opportunities Fund.
Version One is unveiling this new pool of capital after a very successful year for the firm, based in Vancouver and San Francisco. 2021 saw its first true blockbuster exit with Coinbase’s IPO. The investor saw large valuation increases on paper for several of its portfolio companies, including Ada (which had a valuation of $1.2 billion in May); Dapper Labs (valued at $7.5 billion after riding the NFT wave); and Jober (no valuation disclosed but raised a $60 million round in January).
I spoke to both Wertz and Tran about their good fortunes, how they think the fund has achieved its record tally so far, and what Version One has planned for this Fund IV and its investment strategy going forward. Increasing.
“We have this very broad focus of mission-driven founders, and don’t necessarily just invest in SaaS, or just marketplaces, or invest in crypto,” Wertz said of their focus. “We obviously prefer to be early – pre-seed and seed – we are really the kind of investors who like to invest in people, not necessarily in the current traction and numbers. The verticals we go into, and those In terms of both of the entrepreneurs we support, we like to be contrarian; we’re happy to support first-time entrepreneurs that no one else has ever supported.”
Speaking to the individual startups that Version One has supported over the years, I’ve always been struck by how the founders are attuned to both the firm and Wurtz and Tran — even as the startups Much later in maturity too. Tran said one of his benefits is to follow the journey of his entrepreneurs in both good and bad times.
“We get to learn,” she said. “It’s great to see these companies at scale […] We get to see how these companies grow as we keep up with them. Even the Little Things We’re Constantly Thinking About—We’re Constantly Thinking of Laura [Behrens Wu] At Shippo, we’re constantly thinking of Mike [Murchison] and david [Hariri] In Ada, even if it’s going to be tough to actually help them hook the needle on their business.”
Wertz also discussed that Knack Version One, which seems to be in a hot investment zone early on, anticipates a hype cycle when many other firms are still reticent.
“We moved to crypto in early 2016, when most people didn’t really believe in crypto,” he said. “We started investing quite aggressively in climate last year, when no one really invested in climate technology. In some areas, as well as having a strong belief in the types of entrepreneurs that someone else actually has confidence in No, that is exactly what makes these returns possible.”
Since climate technology is a relatively new focus for version one, I asked Wertz why they’re betting on it now, and why it’s not just another green bubble like the one we saw in the late 2000s.
“First of all, we care deeply about it,” he said. Secondly, we think that clearly a new urgency is needed to jump-start technology into one of mankind’s biggest problems. Third, is that the clean tech boom has taken a lot of infrastructure off the ground. It really reduced the cost of infrastructure, and hardware, of electric cars, of batteries in general, of solar and renewable energy in general. And so now it looks like there’s more opportunity to actually build a more sophisticated application layer on top of it.”
Tran said Version One saw its current climate condition as an important inflection point — effectively at the height of the pandemic, when most others were focused on health crises rather than imminent existential threats.
I also asked him about the new Opportunity Fund, and how it fits in with his early-stage focus and his overall functional approach.
“The way we do things doesn’t need much change, because we’re not making any net new investments,” Tran said. “That’s why we believe that we are not growth investors, or Series A/Series B investors, which require a different lens in the way we evaluate companies. For us, we just say that we are not looking for these companies. We have such a close relationship with them, we know what the opportunities are. It’s almost like we have information mediation.”
This works well for everyone involved, including the LP, because Tran said it is appealing to them to create an SPV with the target companies without having to create a new direct relationship with the target companies, or something like that. Be able to invest more in companies that perform well. purpose, which is costly and time consuming.
Looking at what is about to change with this fund and their investment approach, Wertz points to a broader international focus made possible by the increasingly distributed nature of the tech industry in the aftermath of the pandemic.
“I think the thing that will probably change the most is a lot of international investment in this one, and I think it’s a direct result of the pandemic and the Zoom investment, that suddenly the pipeline has opened up,” he said. .
“We’ve definitely learned a lot about ourselves in the last year and a half,” Tran said. “I mean, we’ve always been delivered, […] And staying away was one of our advantages. So we definitely benefited and we didn’t have to adjust our working style too much, okay. But now everyone is acting like this, […] So it will be fun to see what benefits we come up with next.”