SOSV, the global venture capital firm, just closed a $ 100 million fund to support its maturing startups – TechCrunch
Sean O’Sullivan, the founder of global venture capital firm SOSV, has slowly but surely put together a significant deal over the years.
SOSV started out as a family office, investing in O’Sullivan’s capital after co-founding two companies, including MapInfo, a company that went public in 1994 before Pitney Bowes acquired it years later in 2007. La Start-up investment firm has since raised three more funds, including a $ 277 million start-up fund that it closed in 2019 and is actively investing from now on.
Now, to top up those funds, the organization has raised $ 100 million for what it calls a “selected fund” to help SOSV maintain its pro-rated stake in some of its separate holding companies.
Due to other tools on the market, SOSV was not completely paralyzed until now. Instead, SOSV has, on occasion, assembled a special-purpose vehicle to reinvest in some of the startups it has supported. But O’Sullivan says they were relatively small SPVs – think $ 2 million or less. The new fund, he says, is expected to issue checks between $ 2 million and $ 5 million and even up to $ 10 million, or 10% of the fund, according to SOSV’s agreement with its investors.
Granted, the new fund also gives startups even more reason to work with SOSV, which tends to write its startup checks to first-time founders, who O’Sullivan says are often – mistakenly – overlooked by investors in favor of recurring founders.
He points to Apple, Microsoft, Facebook, Google and Alibaba, noting that the landscape would be rather different without them. He says he himself experienced the phenomenon when he co-founded a company (NetCentric) after MapInfo. “People were lining up to invest,” he says. “It was so easy to raise money without more than a business plan, and these days you don’t even need it.”
This does not mean that SOSV will be as big as it wants in every transaction. Although SOSV has found success betting on new entrepreneurs – it was among the early investors in FormLabs, for example, a company now valued at $ 2 billion; he’s also backed JUMP, the bike-sharing startup Uber acquired in 2018 – a $ 100 million fund is small by today’s standards. SOSV may well find itself competing with players who have billions of dollars to deploy and are writing bigger checks to younger companies at speeds never seen before in the venture capital world.
This is not an absurd concern, agrees O’Sullivan. He says he’s seen pointy elbows just this week, in fact. Part of a fundraising fund of over $ 100 million was brewing, and one company O’Sullivan declined to mention didn’t want to make room for the startup’s Series B or A investors because it wanted to reach out. a certain threshold of own funds.
O’Sullivan says the early investors nodded. (“They give us a valuation in the billions” and “are also trying to buy secondaries from existing investors,” he explains, while adding that SOSV would generally prefer to own its shares through an IPO.)
Still, he suggests that there is no need to worry about SOSV. As early investors have gone with the flow, O’Sullivan says that in “most cases there is enough going on for previous investors.”
He also calls it “good protocol for end-stage investors. [to make room] if they want to continue with us making offers to them.
In other words, smaller fund or not, SOSV also has a kind of leverage.