What if a founder could become a co-owner of the fund that’s investing in their company? While it may sound a bit out of ordinary, this is exactly what the VC firm Kindred Capital envisions. The company has come up with a new model for VC and it seems to be working, as the firm has announced paying back €5.4M to founders of the companies it has invested in. The announcement comes after Kindred Capital revealed it has secured €88.1M in its second seed funding round.
Kindred’s portfolio displays higher funding success
Quoting Dealroom data, Kindred says, about 19% of startups that raise seed funding go on to raise Series A within 36 months. On the other hand, the firm says that 54% of its Fund I portfolio successfully raised Series A funding within 3 years, which can be attributed to the equitable venture model.
In Fund I, Kindred Capital invested in 29 companies across Europe. Some notable investments include Five, the company creating software layer for autonomous vehicles; Paddle, which enables firms to sell their software products; Pollen, the invitation-only peer-to-peer marketplace for experiences and travel; Disperse, the AI enabled construction startup and more. Kindred has also commenced investing from its second fund with 10 seed investments in companies such as BotsAndUs, Gravity Sketch and Beit.
“We are delighted with the success of our first fund, and excited to announce that our second fund was significantly oversubscribed and which we’ve now closed at €88.1M. We originally entered the UK seed stage ecosystem with ambitious goals, to invest in around thirty high quality UK technology companies per fund, and to introduce ‘Equitable Venture’ as a totally new way of practicing our craft,” says Partner Leila Zegna.
Equitable Venture method works?
The Equitable Venture model was introduced by Kindred Capital and the company says it works. From Fund I, the company estimates that around £5m (€5.4M) will be returned to the founders, which would otherwise have gone to General Partners of Kindred. The whole model works on the idea that Kindred Capital will share its carry with the founders in which the fund invests. It offers a collective model, wherein founders are said to actively help each other achieve their goals.
Image Credits: Kindred Capital