19 Apr Conductive Ventures Unveils Oversubscribed $200M Fund III
Doubling Down On Capital Efficient Non-traditional Entrepreneurs
We are both excited and humbled to announce our oversubscribed $200M Fund III, which brings total assets under management to $450 million. When we first launched Conductive Ventures in 2017, we had a vision to find and fund “Early Efficient Growth” technology companies led by non-traditional founders. We saw a gap in the market where many entrepreneurs did not seek to raise highly dilutive financing rounds to chase growth and sacrifice unit economics. Instead, these entrepreneurs wanted to raise sensibly sized financing rounds to continue building a strong foundation and grow their business while balancing cash burn.
The new fund also allows our team to continue working closely with the founders after we invest. We roll-up our sleeves to partner and collaborate with the entrepreneurs to grow and scale their businesses. VC is a service business, and we learned the hands-on partnership approach from our former partners and mentors at Kleiner Perkins and IVP on what they’ve been doing decades ago.
What We Do
Conductive Ventures is built upon three core principles: serve entrepreneurs as the go-to board partner; serve investors with strong returns; and serve corporate partners by providing a bridge into Silicon Valley innovation.
We began executing upon our unique vision back in 2017, and over these past 5-years, the success we’ve witnessed serves to validate our vision. We invest in early efficient growth technology companies defined as follows:
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Early: We focus on companies with at least $1M of revenue
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Efficient: We invest in companies where their cumulative capital burned is at least equivalent to their annual run-rate revenue
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Growth: We seek category leaders growing at least 200% the year after we invest
Beyond these measurable characteristics, we focus primarily on four areas including software, hardware, technology-enabled services and blockchain.
How We Do It
We wholeheartedly believe that while talent may be equally distributed geographically, access to capital is not. Over 50% of our portfolio is headquartered outside of the greater San Francisco Bay Area, and over 67% of our portfolio company founders/CEOs are immigrants and/or minorities. These scrappy founders often raise and burn very little capital before generating revenues. And once they raise capital from us, we assist them with business development and go-to-market strategies, recruiting assistance, guidance on business models and focus areas, and access and introductions to the pertinent VCs who could lead future rounds of financing.
One of our investors used an apt analogy to describe our fund, “Conductive Ventures seeks to buy a home with a solid foundation in the best neighborhood, but that home typically requires time and hard work to fix-up. Carey, Paul, and their team are not afraid of rolling-up their sleeves to build it. Versus other venture firms that prefer to buy a brand new home. Both will make money over time, but Conductive Ventures will have created a lot of equity.”
The Results
To date, we’ve made 31 investments across both Fund I and II with 7 exits (3 initial public offerings, 1 coin distribution and 3 M&A events). Both funds are top decile funds for their respective vintage years.
By honing our process and executing our vision, we’ve been fortunate to work with amazing entrepreneurs who make it happen day-in and day-out. Some investments include:
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Blueshift – an AI-based customer engagement SaaS solution
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CSC Generation – a digital first retail platform
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Forte – a blockchain solution for game developers
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HireEZ – an AI-based outbound recruiting SaaS solution
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Jackpocket – a mobile lottery platform
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Nice Healthcare – a reimagined primary care healthtech solution
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Self – a fintech company that helps people build credit
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Tripalink – a next generation property development and management solution
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Versatile – a data-driven solution for construction, among others.
We’ve also had 7 exits to-date including 3 IPOs from Desktop Metal (DM), Proterra (PTRA) and Sprinklr (CXM), a coin distribution from Rally, as well as M&A exits from Dor (acquired by Constellation Network), Oculii (acquired by Ambarella (AMBA)) and Travelbank (acquired by US Bank (USB)).
What’s Next?
We are able to share the success we have today because we have stayed true to our vision and executed on our strategy. Raising additional capital will enable us to continue doing what we love – working with entrepreneurs. Our focus and strategy is centered around finding and funding early efficient growth technology companies led by non-traditional entrepreneurs.
And to better support our entrepreneurs, we’ve promoted Arif to Principal, and hired Stella as an Analyst. Stella joins us from Leonis Capital where she focused on early-stage investments.
Last, but definitely not least, we want to extend a warm heartfelt thanks to everyone who has been on this journey with us. We want to thank our investors who believed in our vision from the very beginning, our close friends and families who have provided unconditional support, and our advisors and mentors who’ve been tremendous sounding boards to us. We couldn’t be more excited to continue this journey!
If you’re a capital efficient non-traditional entrepreneur seeking funding, please don’t hesitate to reach out to us at info@conductive.vc.