Counterpart Ventures Fund II

It is March 2020, the COVID-19 pandemic is upon us and like almost all our VC peers we decided to go remote. Joe headed back to Japan, Mikey to Australia and Patrick remained in San Francisco. We figured it wouldn’t last long and we would all be back in the office within 3 to 4 months. The challenge was to raise Fund II, our first multi-LP fund, as a remote team across three separate time zones while continuing to invest and support our existing portfolio.

Today we are thrilled to announce that we have closed Fund II with over $110M raised to invest in founders and entrepreneurs who are just like us: ambitious and relentless.

Hello, Newman… (we have a penchant for Seinfeld & Curb Your Enthusiasm gifs)

It is rare to see two former corporate venture capitalists (CVC) raise an independent and purely financial VC fund of meaningful size. Few have the track record or risk tolerance to leave the comfort zone of CVC. Previously we embraced an innovative model at both Qualcomm Ventures and Recruit Strategic Partners. We elevated both funds to think and act like a real VC: financially-driven mandate with a differentiated strategic edge. This meant actively investing at early stages, leading and pricing rounds, taking board seats, adopting portfolio construction and building sustainable franchises. Investors are ultimately judged by track record. And we were fortunate enough to invest in some pretty amazing companies such as Zoom, Cruise, Matterport, Noom, Palo Alto Networks and DocuSign to name just a few. We hope that we blaze a path for other CVC alumni to follow in the future and raise similar funds.

Our Founding GPs

The Importance of CVC & Counter Club

The CVC community still lacks leadership from an impartial source. One that isn’t living on borrowed knowledge but actually lived the pain and understands the opportunity.

Two decades combined in CVC led to authentic relationships with hundreds of CVC funds around the world. At times as co-investors and occasionally as a sounding board when others set out to establish their first CVC fund. When we launched Counterpart Ventures we activated these relationships in the form of potential partnership or customer introductions for our portfolio companies. Having collected primary information on investment preferences such as sectors or technologies, stages, check sizes and more — we also understand the “sweet spot” of many CVCs . Over the past 3 years we advised and hosted private events for the CVC community via our Counter Club. Counter Club is now the most active and engaged community of CVCs run by an independent VC fund. It boasts over 200 member funds and offers counsel (and therapy sessions!) to nascent CVCs in partnership with our friends from Silicon Valley Bank, Pitchbook, Aduro Advisors and Lowenstein Sandler.

We recently concluded the largest benchmarking survey of the industry to-date with SVB. Download a copy of our report, the State of CVC 2021.

The Counter Club has become a leading independent community where investors connect with one another and find answers to some of their toughest questions in a “no judgment” zone. All our events are high energy and shun party line, a non-corporate approach to corporate investing.

Fund II

We feel that too many early stage investors sit passively on the sidelines, confusing hands-off style with founder-friendly. Today it is in vogue to raise a $12–$20M Series A on premature growth signals. We don’t play this game and believe it is unsustainable. With our creative and flexible funding model our focus remains on old school Series A rounds, specifically $5–8M rounds. We want to run it back to the days of rational check sizes. Check sizes that are sensitive to founder dilution. We don’t celebrate highly dilutive equity finances which could potentially cripple founders and set unrealistic valuation targets. We embrace pragmatic round sizes, setting founders up for success in their next round.

The “tweener” round, before Series A and Series B, is an overlooked opportunity in which our creative model and check size aligns nicely with founders. While we avoid insider “bridges” as a new investor, we are receptive to pricing and leading interim rounds which align founders, existing investors and new investors. We do not subscribe to the traditional VC playbook, in which your next financing round needs to be double the size. Too much of this VC thinking is entrenched in dogma from several decades ago. We aim to inject optimal capital, considerate of founder dilution to hit meaningful milestones.

We continued to invest throughout the pandemic and some of our most recent investments include:

Want to join us at Counterpart Ventures?

Patrick, Joe & Mikey.

Stage agnostic Venture Capital firm based in San Francisco investing with unrivaled conviction to create unique and memorable stories.