Version One’s Successful Year and New Funds
Version One, an early-stage investor with partners Boris Wertz and Angela Tran, has announced the raise of its fourth fund, as well as a second opportunity fund dedicated to making follow-on investments. The new funds have raised a combined total of $100 million, with Fund IV pooling $70 million from Limited Partners (LPs) and Opportunities Fund II accumulating $30 million. This marks an increase from the previous funds, where Fund III raised $45 million and Opportunity Fund I raised around $20 million.
A Year of Success for Version One
2021 was a significant year for Version One, marked by its first major exit with Coinbase’s Initial Public Offering (IPO). The investor also saw substantial valuation increases in several portfolio companies, including Ada, Dapper Labs, and Jobber. These successes demonstrate the fund’s ability to identify promising startups and support them throughout their growth journey.
Focus on Mission-Driven Founders
In an interview, Wertz highlighted Version One’s focus on mission-driven founders who are not limited to specific verticals like SaaS or marketplaces. The firm prefers investing in pre-seed and seed stages, prioritizing people over existing traction and numbers. Tran emphasized the importance of building close relationships with entrepreneurs, enabling them to learn from each other’s successes and challenges.
Contrarian Approach to Investing
Version One takes a contrarian approach by investing in novel verticals and backing first-time entrepreneurs that others might overlook. This strategy has allowed the firm to capitalize on emerging trends before they become mainstream. For instance, Version One invested in crypto early in 2016 when many others were skeptical.
Distributed Nature of Tech Industry
Wertz expects a significant shift in the firm’s investment approach due to the increasing distributed nature of the tech industry post-pandemic. He believes that the widespread adoption of remote work will lead to more international investing opportunities, making it easier for Version One to identify and support promising startups globally.
International Focus and Investing
With the expansion of digital communication tools, the boundaries between regions have become less relevant in the venture capital world. As a result, Version One is now better equipped to identify and invest in high-potential startups from various countries. This shift will allow the firm to tap into emerging markets and capitalize on the growing demand for innovative solutions.
Advantage of Distributed Work
Tran noted that Version One’s distributed nature has been an advantage during the pandemic, enabling them to maintain their work style without significant adjustments. As more investors and companies adapt to remote work, the firm is poised to benefit from this trend.
Investing in Companies with Existing Relationships
Opportunities Fund II allows Version One to double down on its existing portfolio companies by providing additional funding for those that have shown strong growth potential. This approach enables the firm to build even closer relationships with entrepreneurs and better understand their challenges, ultimately leading to more informed investment decisions.
Benefits of Investing in Companies with Existing Relationships
Investing in companies with established relationships offers several benefits, including reduced due diligence costs, increased information flow, and improved understanding of company operations. By leveraging these advantages, Version One can make more informed investment choices and generate stronger returns for its LPs.
Future Outlook for Version One
As Version One continues to adapt to the changing landscape of venture capital, the firm is well-positioned to capitalize on emerging trends and opportunities. With a strong focus on mission-driven founders, contrarian investing approach, and expanded international reach, Version One is poised to maintain its position as a leading early-stage investor.
Related Topics
- Boris Wertz: Co-founder of Version One Ventures
- Coinbase: Cryptocurrency exchange that went public in 2021
- Corporate Finance: Study of how companies raise and manage funds
- Economy: System by which goods and services are produced, distributed, and consumed
- Entrepreneurship: Process of creating and running a new business or venture
- Finance: Field concerned with the management of money and investments
- Investment: Allocation of capital to generate returns in the form of income, capital gains, or both