The Startup to Fund Other Startups
Rolling funds, solo capitalists on the rise, crowd syndicates, and team-based seed funds all shout the same thing: venture capital is expanding and unbundling at the same time. Oper8r aims to bridge the gap between what it takes to be a casual investor and what it takes to be a full-time VC with institutional backing. It’s a startup that was created to assist single investors and those creating rolling funds in their growth. The concept was that a well-connected, knowledgeable individual might raise $10 million in a debut fund through contacts, but when it came time to grow to a $50 million or $200 million fund, managers needed a comprehensive understanding of how the limited partners (LP) world operated.
Now, the CEO says that all 18 of his first cohort’s graduates have closed funds. This includes Stellation Capital, Maple VC, Interlace Ventures, and Supply Change Capital. Its second cohort is currently fundraising, although nearly $500 million has been raised throughout both cohorts. Next week Oper8r will start its third cohort. Besides, Cr8r – an early-stage program to assist outstanding angel investors expand their investment cadence – will be announced soon.
The growth of Oper8r coincides with an increase in the number of first-time venture capitalists. Wall Street Journal reported this week that the rate of first-time venture financing in the United States is “on pace to reverse course” after years of decline. According to the story, “some 40 percent of venture-fund announcements, which includes funds just setting out to raise capital, were made by debut funds in the second quarter of this year, whereas they represented between roughly 20 percent and 30 percent of fund announcements in each quarter over the past two years,” citing data from advisory firm Different Funds.
The growth of a single GP or an ambitious rolling-fund-turned-venture business, according to this data, isn’t a one-off; it’s a pattern. This implies that venture companies are under increasing pressure to go beyond a scout program. And it is especially true when it comes to helping the next major investors, and there is a bigger market for formal attempts to grow operations.