Our team of honeybadgers is back with a $230M seed fund for startups pre-product market fit
I’m really proud to announce our newest $230M core seed fund, Initialized V. This brings our total assets under management to more than $770M. It’s hard to believe it’s only been eight years since Initialized’s first fund ($7M in Initialized I from 2012), and only four years since our first true independent seed fund ($125M in Initialized III from 2016).
We are proud to say Fund III now sports a pair of recently announced startups worth more than a billion dollars (telemedicine startup Ro and HR systems provider Rippling). In both cases, we were among the earliest investors — well in advance of product-market fit. Initialized has now been a part of at least eight such billion dollar startup stories, including Instacart, Coinbase, Cruise Automation, Flexport, Blend, Opendoor, with countless other startups well on their way.
None of it would be possible without a community of founders: engineers, designers, product managers, and deep practitioners in the science and art of startup-making. We’ve also been incredibly blessed to have the world’s best institutions, endowments, and foundations behind us. Along the way we’ve funded companies now worth in aggregate over $40 billion in market value and counting, and for nearly all of those, we were among the first investors in those businesses.
I remember graduating from college in 2003 with a degree in computer engineering and feeling worried that the software revolution and first wave of the Internet had passed me by. It turns out every generation in tech looks at the pioneers that have come before and wonders the same thing: Is it over?
The truth is, from where we stand today in 2020, we are still just getting started. What started with the Gutenberg printing press led to the rise of modern literacy and an industrialized society. The mass produced book took hundreds of years to push society forward into what we now call modernity. We’re less than 10 years into a world where the infinite book — the internet-connected computer in every pocket — is in more than half of the world’s hands. Every percentage of the GDP pie will be touched by this technology, and we believe this transformation continues in every sector.
We remain generalists with a strong software-first thesis. If software innovation powers what you’re doing, we want to talk.
We remain focused on pre-product-market fit startups at seed in the lead position. Our sweet spot remains checks of $1M to $4M. What founders need at this stage is fundamentally different than what is needed at Series A and later, and so we’ve built our team and our software to be focused on those earlier stage requirements: product, engineering, design, PR, marketing, finance and legal. And when we invest, we’ll do it bravely and unilaterally. You’ll never hear Initialized say, “Come back to us when you find a lead,” because we want to be the seed investor of record. We prefer to be first to commit, and most of the time we are.
When we invest, you don’t get one partner, but all of us. Many funds are run like a loose confederation of lone wolves. That may work just fine at later stages, but we believe seed requires a panoply of skill sets. You need investors who can help you level up in every area, and that’s what we are with our startups. Together, we try to greatly increase the chance of you getting to product market fit.
You’ll also get trusted advisors. We aren’t your boss and won’t pretend to be. Founders are the ones who put their blood, sweat, and tears into their businesses, and are the right people to make the call. We’re here to help you make the best call you can. If we can help you see around the corner or see your own blindspots, that’s what we’re here for. Our method is Socratic, not prescriptive and top-down. We’ll ask you questions to help you get to the answer only you can find.
We remember what it was like to build our startups, and so we want to be the investors to help you get to the next stage the right way. We’ll help introduce you to your first customers, get your first press and social media mentions, close your first hires, and advise you on how to set the processes and culture for your team. When it’s time for that Series A, we’ll make sure you meet the board member who will help you get to the IPO. When you get punched in the face (and every startup does), we’ll be in your corner to help you dodge the next punch and plan your counterattack.
One proverb that has guided me as we’ve built this team together and decided on a team approach: If you want to go fast, go alone. If you want to go far, go together.
I’m proud to announce Brett Gibson is returning as a general partner for Initialized Fund V. He joined Initialized in 2017 as an operating partner and progressively developed his expertise as a great advisor to startups, initially on the technical side and now across the breadth of things that a founder will inevitably run across. He’ll continue to lend his support to the full portfolio on all things cloud, infrastructure, crypto, and AI/ML.
Our investment team remains six strong, including myself, Brett, Alda Leu Dennis, Jen Wolf, Kim-Mai Cutler and Andrew Lee. We remain committed to a strong team-first approach helping our founder community find product market fit and build meaningful businesses.
I’m excited to be one part of a team that has a chance to build an enduring brand and community of founders who will go on to make enduring businesses. Initialized has already been early investors in eight companies worth over a billion dollars in eight years of operation. We’re here to help our founders make a lot more of them happen.
We believe in a positive-sum growth-mindset world where strong missions and great teams — led by high-integrity founders — can systematically generate world-class products and services, build positive impact for the world, and ultimately drive outsized returns.
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