Good things come in bunches: Adding more to the bunch at Broadhaven Ventures with the launch of the AGM Collective Scout Program
Good things come in bunches: Adding more to the bunch at Broadhaven Ventures with the launch of the AGM Collective Scout Program
Launching the Broadhaven Ventures AGM Collective Scout Program with our first Scouts, Levent Altunel and Enrico Ohnemuller, Co-Founders of bunch
If you only have a few minutes to spare, here’s what you should know about the launch of the AGM Collective Scout Program by Broadhaven Ventures:
💵 AGM Capital by Broadhaven Ventures is launching the AGM Collective Scout Program: As I shared in last week’s post, AGM is launching capital solutions to help alts go mainstream. The first initiative is the AGM Collective Scout Program, which will provide alts founders and angels with the ability to invest into alts and fintech companies, all while leveraging the private markets infrastructure we’ve invested into that is making alts go mainstream.
🛠 Trends in private market investing infrastructure:
Innovation in investing infrastructure has made it easier for GPs and LPs to participate in private markets.
Starting and running a fund has never been easier. Infrastructure solutions that enable investors to create SPVs at low cost and low friction have made it easier for founders, operators, and angels to build an investing track record.
🏗 Building the pipeline for emerging managers:
We want to help the next generation of potential investors get their feet wet by building a track record.
We are launching the AGM Collective Scout Program by Broadhaven Ventures to help create and train new fund managers.
💵 Our first AGM Collective Scouts: Levent Altunel and Enrico Ohnemuller, Co-Founders of bunch
We couldn’t have picked founders who embody the concept of alts going mainstream in Europe any more than Levent and Enrico — they are building the infrastructure that will push private markets forward by helping investors and founders set up and manage SPVs to pool co-investors, LPs, or business angels.
To learn more about the AGM Collective Scout Program, you can reach me at michael.sidgmore@broadhaven.com.
VCs have often found success backing companies that unbundle industries. Interestingly, the past 10 years have been an exercise in the unbundling of VC itself.
Innovation in technology infrastructure for GPs and LPs has paved the way for the structure of VC funds and fund of funds to be deconstructed.
Unbundling VC funds with deal-by-deal SPVs
The first wave of unbundling came in the form of deconstructing the fund with singular investment vehicles (SPVs) into companies on a deal-by-deal basis.
SPVs have created a way for investors to build a track record on an investment-by-investment basis in order to subsequently raise capital in a fund structure. The advent of SPVs has been a tremendous innovation for both the GP and LP communities – it’s supported the growth of the micro-VC industry that has led to the rise of some of the most well-respected VC funds and some tremendous returns for LP.
Fund managers like Chris Sacca (Lowercase and Lowercarbon), Alexis Ohanian (776 and Initialized), Semil Shah (Haystack), Brendan Wallace (Fifth Wall), Zach Coelius (Coelius Capital) may be household names now, but got their start with sub-$10M funds or AngelList SPVs. Chris’ $8M Lowercase Fund I, at 204x MOIC, remains one of the best funds in history.
Much like the rise of cloud and SaaS have enabled founders to start companies faster and cheaper, advancement in tech infrastructure for private markets has paved the way for fund managers to go into business faster, with less costs and fewer barriers to entry.
An aspiring fund manager who has great access to quality investment opportunities can go to AngelList or Carta and spin up an SPV to invest into a company in a few days for a few thousand dollars per year.
Smaller funds provide benefits for both GPs and LPs.
For GPs, they offer a way to build a track record to then go on and build a larger fund platform.
For LPs, smaller fund sizes can provide an easier path to higher returns because it can be easier to return a fund on a smaller fund than a larger one.
We’ve been lucky enough to experience this from both the GP and LP vantage points.
At Broadhaven Ventures, we’ve kept our focus on early-stage opportunities as we know that a single investment with a $B outcome can return the equivalent of a fund with the right entry point.
We’ve also invested in over 15 VC funds either personally or through Broadhaven Ventures, a number being sub-$100M in size for their first funds or first-time fund managers. Many of these funds have outperformed.
We’ve helped a number of our VC funds raise from LPs and I was a part of the team building the LP network at iCapital, where we helped investors access PE and VC funds. We’ve seen what LPs look for in fund managers. And we know how hard it is to raise capital, particularly for first-time fund managers.
The unbundling of a VC fund with SPVs on a deal-by-deal basis can be a great way for aspiring fund managers to build a track record in advance of launching a blind pool fund.
Unbundling fund of funds with fund-by-fund SPVs
The second wave of unbundling is starting to take hold with the deconstructing of VC fund of funds.
LPs want to invest in smaller funds, but it can be difficult to find and invest into managers in a systematic way. That’s why fund of funds exist and provide a strong product to LPs.
However, LPs want increased choice and agency with their investment decisions. Fund by fund vehicles allow for that.
Platforms like iCapital, Moonfare, and Allocate, which enable LPs to access and invest into PE and VC funds on a fund by fund basis with their feeder fund infrastructure have led the charge with the unbundling of fund of funds. LPs can invest into single funds and build their own bespoke portfolio of PE or VC funds without the fee structure of management fee and carry that a fund of funds would charge them.
More recently, technology infrastructure from the likes of Carta / Vauban (acq. by Carta), AngelList, and Bunch now allow LPs to invest into funds on an investment-by-investment basis in the form of LP syndicates.
Building the pipeline for emerging managers — The AGM Collective Scout Program
How does the venture industry continue to improve? By giving future investors the access and ability to be investors. The more experience investors gain, the better investment decisions they will make and the better they will serve founders.
To grow the pipeline of emerging managers, we must start even earlier. Helping founders and angel investors gain experience as investors will support then as future fund managers, if they choose to go down that path.
Now, we want to help the next generation of potential investors get their feet wet in building a track record.
We believe that great founders generally know — and know how to spot — other great founders and companies. Founders also can help other founders since they are walking in the same shoes.
To that end, we are launching the AGM Collective Scout Program by Broadhaven Ventures to help create and train new fund managers. We want our scout program to give founders and angels the track record they need to raise a fund in the future. We’ve structured our program to provide our scouts a pool of capital that we can allocate to investments on a deal by deal basis.
Thanks to the innovation of SPV infrastructure providers like AngelList, Carta / Vauban (acq. by Carta), and bunch, it’s now possible to deconstruct a fund of funds and give us the ability to back a number of micro funds on a fund-by-fund basis.
We plan to build out a portfolio of scouts while leveraging the infrastructure we’ve invested into.
Welcoming our first scouts – Levent Altunel and Enrico Ohnemuller of Bunch
The first scouts in our program will be Levent Altunel and Enrico Ohnemuller of bunch. They are well-respected and deeply connected in the startup ecosystem in Germany and across Europe as founders of bunch, where they are building the private OS for investors and founders.
Levent and Enrico have deep connections in the European startup community. We couldn’t have picked founders who embody the concept of alts going mainstream in Europe any more than Levent and Enrico — they are building the infrastructure that will push private markets forward. Bunch has quickly proven to become the infrastructure of choice for founders to roll up smaller investors and for investors to create SPVs to invest into companies and funds (and make it a heck of a lot easier to invest into European companies by abstracting away much of the complexity and manual work required with the process of investing into a European company).
We’re big believers in alts going mainstream and the technology that’s being created to enable more people to become investors.
To that end, we are excited to use bunch’s technology to enable Levent and Enrico to invest into a number of FinTech and Alts startups in the European ecosystem. For any other VC or Accelerator who is thinking of launching a scout program in Europe or founders or investors who would like to roll up investors to create a more efficient cap table, we hope that they too look into working with bunch.
We are thrilled to continue to support Europe’s growing startup ecosystem beyond the 12 companies and 3 VC funds we’ve invested in across Europe. The quality of companies, founders, and investors in the ecosystem has continually impressed us — and with data that shows that there’s a thriving network effect of founders coming out of many of Europe’s unicorns, it’s clear that this is an ecosystem that will produce many more incredible companies. With that will come an incredible set of angel investors and micro VCs, who will be the early backers of these iconic companies, and then some will ultimately start their own VC funds.
Good things really do come in bunches — albeit unbundled ones — so we’re excited to launch our AGM Collective Scout Program with Levent and Enrico from bunch and add more stellar founders and angels to this great bunch as we all play a part in continuing to make alts go mainstream.
To learn more about the AGM Collective Scout Program, you can reach me at michael.sidgmore@broadhaven.com.