The US has had solo VC fund managers for a few years however the pattern is just simply beginning to catch on in Europe. One of many latest is Underline Ventures, began this yr by Bogdan Iordache in Romania. His profession trajectory in direction of being a Solo GP suits the profile: a former entrepreneur, a key participant within the Japanese European tech scene, a founding father of the The way to Internet convention, and a former VC in a a number of Accomplice group.
Above all, what Europe wants extra of is these ‘funds of funds’ that are specialised in working with this new wave of European Solo GPs.
Hypernova, a $25m fund which soft-launched in June has been based by skilled investor Tugce Ergul. She plans to not solely spend money on different funds but in addition straight into startups. Ergul was previously with Angel Labs, an “investor accelerator”, which unfold throughout 44 nations.
Talking to TechCrunch, Ergel stated: “There’s a brand new wave of funds arising. We’re speaking about profitable founders that are actually beginning their very own funds to spend money on new entrepreneurs. There are companions leaving their former funds beginning their very own funds, as a result of now it’s simpler and cheaper than ever to start out a fund. And there’s extra help for solo capitalists.”
So how does it work? Hypernova places 40% of its fund into Solo GP funds, and the remaining straight into startups, with 50% within the US and 50% in Europe.
Ticket sizes will likely be $500k-750k into these Solo GPs who’re elevating their first fund, and Hypernova will goal not only for financiers however doubtlessly journalists, angel buyers, former entrepreneurs, or Associates / Companions spinning out of their earlier VC fund.
Hypernova gives new GPs help on the fund administration facet, the tech wanted, LP introductions, branding help, and coinvestment alternatives
Ergel added that previously no LP would give Solo VCs any cash: “Now there’s a there’s a brand new world on the market yow will discover LP cash in case you’re only one individual and a solo GP. Beginning funds has turn into cheaper. You may arrange a fund for $10,000 and your fund admin prices are actually low. So it’s simply making the entry which way more straightforward for these fund managers. So we wish to again these fund managers. Then that’s the place the hybrid play comes into place as a result of the opposite half of the fund is a direct funding automobile. And we are going to both co make investments with these funds that we spend money on, or we’re going to spend money on the comply with on rounds into the winners of those fund managers.”
For its direct investments, Hypernova plans to give attention to automation, retail, finance, logistics, transportation and transport, with $250k-500k ticket sizes, and it gained’t take board seats.
Hypernova is claiming to be the primary female-led solo GP fund in Europe and the primary female-led solo GP fund-of-funds within the US
Since its tender launch in June Hypernova says it has:
– Invested in an early stage infrastructure fund primarily based out of San Francisco
– A London primarily based fund managing athletes’ cash
– A Berlin primarily based, solo GP fund
– LA-based deeptech fund
– San Francisco primarily based fund investing in LP secondaries (Fund II).
– Invested straight in a hydrogen market primarily based out of San Francisco
– DevOps for carbon elimination firms primarily based out of Berlin
– Cohort primarily based studying and expertise platform primarily based out of London referred to as Neol
– a Micro-fulfillment platform to optimize the final mile
It now plans to open an workplace in London and rent a London primarily based associate as of January 2023.
And it’s launching an LP range and inclusion program to get new buyers into the fund-investing recreation the place they may co-invest with with very small quantities.
“I’m a solo enterprise capitalist myself,” Ergel added. And that’s additionally one of many new issues for the markets. I began this as a result of I skilled so many difficulties and points myself being a solo GP. If I had began this within the US as a pure US targeted American fund, I might have closed it in six months. However as a result of I needed to do one thing that’s bridging US and Europe it took so much longer.”