Founder’s Co-op, the Seattle-based early stage investment group headed by Andy Sack and Chris DeVore, has closed its second fund at just under $8 million. That’s a significant step up from the first Founder’s Co-op fund, which DeVore says was about $2.5 million—a shift that reflects both the growth of Seattle’s startup scene, and a decision have more reserve capital on hand for follow-on investments.
Founder’s Co-op operates on an interesting model, one that Sack has described as a “peer-to-peer, seed-stage fund” drawing from a wide pool of investors and entrepreneurs. As the name reflects, Founder’s Co-op touts its ties to experienced startup hands around the region—just about anyone you can think of in the Seattle area, and a few from beyond the region, are listed among the nearly 60 “mentors” on the website. The number of limited partners involved in the new fund is big, with 66 investors listed on the regulatory filing.
“We think of Founder’s Co-op as a platform—not just for me and Andy to do stuff, but for a whole community of folks who have a track record in the startup community,” DeVore says.
Founder’s also is connected to the Seattle TechStars program, which Sack directs, and the fund has stocked an office building in the bustling South Lake Union neighborhood with portfolio companies. Typical early investments are in the $100,000-$200,000 range, which leads to between $500,000-$750,000 over the long run, DeVore says.
Notable investments so far include Sparkbuy, the comparison-shopping startup acquired last year by Google; healthcare marketing startup Appature; gamification startup BigDoor Media; and Urban Airship, the Portland, OR-based app services startup.
The fresh SEC filing for the new fund indicates the new pool could grow to $10 million, but DeVore says this will likely be the final fundraising for fund No. 2. Nearly $3 million was originally raised in late 2010 as an inside round from the limited partners in the first fund, and some of that money has been committed. The balance of $5 million was added more recently, reflecting an expanded pool of investors, DeVore says. Founder’s Co-op probably won’t raise another fund until 2013 or so, he says.
