Former Founders Fund GP Brian Singerman and co -founder and CEO of Quiet Capital, Lee Linden, are looking for over $ 500 million for a new fund called GPX, three people who are familiar with their strategy told TechCrunch. A significant part of the GPX fund, potentially as much as 50%, comes from Founder’s Fund Founder Peter Thiel, these people said.
GPX uses a til -shaped strategy. The company will invest approximately 20% of the capital in funds managed by new VCs targeting the start-seed and seed stages startups; The remaining capital will go to collaboration with new leaders on leading investments in later phase (probably in Series B) of their breakout companies.
It is a rather different approach compared to how most venture companies work. While typical VC companies are investing in all their capital directly, GPX adopts elements of what is known as a fund-of-fund model, a lesser ordinary investment strategy, where a company invests part of its capital in a portfolio of other funds, rather than directly in underlying assets, such as startups. While a fund-of-funds offer limited partners a convenient way to access under-radar or difficult access companies, a significant disadvantage is the double layer of fees: those charged by fund-of-funds and those of the underlying leaders.
While capital raised by fund-of-funding companies hit a 16-year-old low last year, according to Pitchbook, Singerman and Linden, their personal brands, unique networks and a strategy that is only partially a fund-of-funds will encourage limited partners to open their Checkbooks for GPX.
Singerman and Linden may be on something. As venture capital concentrates in the largest funds, some of these companies’ best investors are no longer interested in being part of a large machine. They leave the Behemoth companies to launch their own investment equipment where they can be more quick and specialized.
GPX is aiming for the next generation of VC investors to identify and support many strong companies in the early phase, allowing Singerman and Linden’s company to co-lead later-phase investments in the new leaders’ most successful portfolio companies.
Here, GPX’s strategy becomes particularly valuable: VCs in early stages often try to exercise Pro-Rata rights in later financing rounds (Serie A, B and beyond), but their fund sizes typically prevent them from maintaining their percentage ownership in top priesting companies. When facing such options, small VCs are often encrypted to raise vehicles with special purposes (SPVs) from their existing limited partners. Nevertheless, these processes are time -consuming, allowing other investors to beat after sought -after stock in the most sought -after offers.
With GPX’s capital behind it, new foundations will have an opportunity not only to exercise their pro-rata rights, but also lead a later round.
The information previously reported that Singerman and Linden launch GPX but did not provide details of the fund’s target size and other strategy information.
Singerman and Linden did not respond to a request for comment.