SOSV, the global venture firm, just closed a $100 million fund to back its maturing startups – TechCrunch

Sean O’Sullivan, the founding father of the worldwide enterprise outfit SOSV, has slowly however steadily constructed up a large operation through the years.

SOSV began off as a household workplace, investing the capital of O’Sullivan after he cofounded two corporations, together with MapInfo, an outfit that went public in 1994 earlier than Pitney Bowes it years later, in 2007. The seed-stage investing outfit went on to boost three extra funds, together with a $277 million early-stage fund that it closed in 2019 and is actively investing from proper now.

Now, to enhance these funds, the group has raised $100 million for what it’s calling a Choose Fund, a automobile meant to assist SOSV keep its professional rata stake in a few of its breakaway portfolio corporations.

Due to different instruments available in the market, SOSV wasn’t fully hamstrung till now. As an alternative, SOSV has, once in a while, assembled a particular objective automobile to re-invest in sure of the startups it has backed. However O’Sullivan says these have been comparatively small SPVs — suppose $2 million in dimension or much less. The brand new fund, he says, is predicted to jot down checks of between $2 million and $5 million and even as much as $10 million — or 10% of the fund, per SOSV’s settlement with its buyers.

Actually, the brand new fund additionally provides startups much more cause to work with SOSV, which tends to jot down its seed checks to first-time founders, who O’Sullivan observes are sometimes ignored — wrongly —  by buyers in favor of repeat founders.

He factors to Apple, Microsoft, Fb, Google and Alibaba, noting that panorama would look slightly completely different with out them. He says skilled the phenomenon himself when he cofounded an organization (NetCentric) after MapInfo. “Individuals have been simply lining as much as make investments,” he says. “It was really easy to boost the funds with out something aside from a marketing strategy, and nowadays, you don’t even want a type of.”

That doesn’t imply SOSV will get as huge a chunk as it would like in each deal. Although SOSV has loved success by betting on new entrepreneurs — it was among the many first buyers in FormLabs, for instance, an organization now valued at $2 billion; it additionally backed JUMP, the bike-share startup that Uber acquired in 2018 — a $100 million fund is small by present requirements. SOSV may effectively discover itself competing in opposition to gamers which have billions of {dollars} to deploy and that are writing greater checks to youthful corporations, quicker than ever. 

It’s not an absurd concern, agrees O’Sullivan. He says he noticed some sharp elbows simply this week, in truth. A part of a $100 million-plus spherical was coming collectively, and a agency that O’Sullivan declined to say didn’t wish to make room for the startup’s Collection B or A buyers as a result of it wished to satisfy a sure fairness threshold.

O’Sullivan says the sooner buyers acquiesced. (“They’re giving us a multi-billion valuation” and likewise “attempting to purchase secondaries from current buyers,” he explains, whereas including that SOSV would usually want to carry its shares via an IPO.)

Nonetheless, he suggests there’s no want to fret about SOSV. Whereas the sooner buyers went with the stream, O’Sullivan says that in “most circumstances, there’s sufficient to go round for the earlier buyers.” He additionally calls it “good protocol for the late-stage buyers [to make room] in the event that they wish to proceed to have us introducing offers to them.”

Put one other method, smaller fund or not, SOSV has a sort of leverage, too.

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