Four New York Entrepreneurs Launch A New Type Of Venture Fund
Matthew Brimer builds things. In 2011, he cofounded General Assembly, an early coworking company that evolved into tech and programing school. (Fifteen campuses strong, it sold to the Adecco Group for more than $410 million in April.) Passionate about music, in 2013, he helped launch Daybreaker, a wellness and dance party experience—early morning and substance free—which has become an unlikely lifestyle brand with a cult following.
His next project is a new venture fund, dubbed simply The Fund, that will focus solely on New York startups. It will not charge a management fee (there is a 20% carry) and will shun institutional money. Instead Brimer—along with The Fund’s cofounders Katie Hunt (an early employee at Warby Parker), Adam Carver (Battlestar Capital and AngelList), and Jenny Fielding (Switch-Mobile)—are taking personal money from 75 New York-based entrepreneurs. Member LPs include the likes of Casper’s Neil Parikh, Handy’s Oisin Hanrahan and Umang Dua, and Common’s Brad Hargreaves.
To date, The Fund has raised from its community of New York angel investors a total of $3.2 million—paltry by VC standards but, according to Brimer, small by design. He sat down with Forbes to discuss his new venture in venture.
Steven Bertoni: How is The Fund different from conventional venture capital?
Matthew Brimer: The Fund is part community and part experiment. The concept is to bring together the New York startup ecosystem—specifically a group of successful founders and operators who have built companies from the ground up. The goal is to come together, pool capital, networks and expertise to support the next generation.
SB: The Fund’s size, $3.2 million, is tiny by VC standards—especially given your network of investors and founders. Why the small size?
MB: The fund is intentionally small. The capital is almost entirely made up of personal investments from founders, not endowments and pension funds. When people are personally invested they care more. We intentionally didn’t want to have the investment size so large that we limited getting good people because of this personal money. We want people who had an exit as well as successful people who are running growing companies but don’t currently have a ton of cash sitting around.
SB: With the small size, how do you fund future investment rounds if the portfolio takes off?
MB: We will invest anywhere from $50,000 to $250,000 into the first round. But then we also, if it’s a deal that we like, will offer co-investment opportunities to our members LPs to co-invest at the same terms of the fund. For investing in later rounds, I anticipate we will have raised larger funds. But we have also structured it so we can set up a special purpose vehicle to offer additional investments to member LPs and other investors in our network.
SB: The Fund is backed by individuals, not institutions. What advantages do you see in that?
MB: We have 75 handpicked founders and operators in the fund. What that means for entrepreneurs raising money is that you have 75 successful company builders who have invested in your company all in one fell swoop. You now get advice from any of these folks, introductions to key people, mentorship and expertise. The whole thing is really run as a community. We share all of our members. It all runs on Slack, but we we bring together our members and our portfolio companies about once a month. These are real people who build companies. It speaks to the idea that the best people to invest in startups are the people who have successfully built startups.
SB: Deal flow is such a vital piece of venture investing. Why are you avoiding tech meccas like Boston, Seattle and, of course, Silicon Valley to focus solely on New York?
MB: Tech in New York, despite growing by leaps and bounds in the last few years, is still an underdog industry compared to finance, real estate and fashion. Because of this there is a sense of camaraderie. New York is such a place of diversity— not just the people but also in terms of industries, ideas and expertise. Everything gets remixed and there’s so many different ideas and expertise of the people who come together to make all sorts of crazy stuff. It’s a cauldron. In the end, the desire is more than just for financial gain. We all hope that there’s financial gain here, but before we brought anyone onboard, we made sure their hearts were in the right place, that they’re doing this not only for the return but, more importantly, because they believed in this idea of coming together and supporting the next generation of New York entrepreneurs.