Co-founded by Rich Capital, a San Francisco-based venture firm Jennifer Carroll And Chantelle Garvey, The sector bubbling with unicorns for the first years focused specifically on Adtech. Rare, the women-led partnership closed its third fund in February, a નું 165 million vehicle and the largest ever. That said, the return from its previous fund shows that it is now paying an initial bet on the revived sector.
Rich Capital’s second fund, a $ 82 million vehicle closed in 2017, intended for LPs and posted a net internal return rate of 72.1% as of Q21 2021, according to data obtained by TechCrunch. The fund, which invests in Paper, Winnie and now Unicorns handshake and outschool, has multiple percentage points over the top quarter of vintage funds. According to data from Cambridge Associates, it had a net IRR of 47.64% in the same quarter as the top quarter of vintage funds.
In comparison, Rich Capital’s first fund was multiple percentage points higher than the top quarter of fund performers in its vintage year, 2015.
Notably, Rich Capital’s return for its second fund is largely a paper gain, i.e. based on an improvement in net IRR valuation. Given the fact that the firm is heavily focused on the follow-on round, the IRR is thus a snapshot of a moment of its performance. The portfolio company Elevation saw its first cash out recently as it merged with Course Associates, but that is not reflected in the data.
A number of flourishing startups may explain what could have contributed to the improved performance between Rich I and Rich II. According to the Impact Report, Reach II invested 32 32 million in 14 major investments, including Newsella, Handshake and Outschool. He also puts money into the paper, which recently landed a nine-figure round led by the IVP. By gaining access to those companies as soon as possible, and then seeing them marked as an Adtech boom as a category, Reich’s position is validated.
The diversity of Rich II’s portfolio beats the industry average, but the founders are still focused as white and male. About 74% of investments were set up by men, while 26% were set up by women, the report said. About 62% of the founders are known as white, 20% as Asian, 14% as Latin X and 4% as Middle Eastern. There are no black founders in Rich Capital II’s portfolio.
Impressive returns to reach come at a time when venture is in a more widespread boom. A number of investors and founders spoke in the background to refer to whether the returns for the vintage seed-stage fund are impressive. When it is not heard in this environment, the percentage of return is “crazy good,” said one investment strategist.
“Easily the upper quadrant and maybe the upper decimal,” they said. “Unless we’re talking about crypto, it’s pretty common.” A separate seed-stage investor pointed to Fred Wilson’s recent blogpost “Cash on Cash vs. IRR,” which could break the holding fund’s performance data during this period.
Nonetheless, Rich’s return offers an impressive window into how Venture Capital is doing the most diversified partnerships in one of the most revived sectors in startupland. Velocity does not go unnoticed. The filings show that Rich is raising money for the $ 50 million Opportunity Fund. The company is also recruiting late Jomaira Herrera And as a partner from Cowboy Ventures Tony Van As head of investor content from AdSurge.