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Peterson Ventures, a firm that quietly backed Allbirds and Bonobos, just closed a $65 million fund

Peterson Ventures, a 12-year-old, Salt Lake City, Utah-based seed-stage fund, has long operated fairly quietly, but many of its bets have become known brands in the respective worlds of consumer and enterprise software investing. Among these is the shoe company Allbirds; the men’s clothing company Bonobos (acquired a few years ago by Walmart); and Lucid Software, which closed its newest, $52 million round back in April.

Thanks to a newly raised $65 million fund — more than double the size of its $33 million second fund — Peterson has even more money now to write checks in the range of $250,000 to $1 million in a wide variety of startups.

We were in touch this week with Peterson partner Ilana Stern, whose own consumer startup, Weddington Way,  raised money from Peterson before selling to the Gap in 2016. Stern, who joined the outfit last fall and is based in San Francisco, shared a bit more about the firm’s newest fund and where it’s looking to shop. Our exchange has been edited lightly for length.

TC: Peterson is part of a bigger platform called Peterson Partners. How many asset classes is Peterson Partners funding?

IS: Peterson Ventures is part of the Peterson Partners platform with funds that invest in lower-middle-market private equity and search funds. There are over 30 people firm-wide, including a four-person full-time investing team [on the venture side]. We’ll be looking to add one to two more members in the next year.

TC: How does the firm think about consumer versus SaaS, and is this different than in past years? For example, First Round Capital used to invest half its capital in consumer-facing startups, and that’s not the case right now, as Josh Kopelman told us a couple of weeks ago.

IS: Our first, $25 million fund, was close to a 50/50 split; in the second fund, we shifted to 65%/35%, focusing more heavily on B2B SaaS than consumer. Going forward, we expect to be investing around 60% to 70% SaaS and around 30% to 40% consumer.

The bread and butter of the Utah market is SaaS, and we expect to continue to back great SaaS companies in Utah. That said, there is a growing ecosystem of compelling e-commerce and consumer companies, including in healthcare and financial services where we see a continued ‘consumerization’ of those two sectors.

TC: What are two of the firm’s most recent bets, and what do they say about the way your team operates?

IS: Via and Tava Health are two of our new seed investments. Via connects businesses to their consumers on their favorite messaging and voice platforms. Commerce infrastructure is an area where we’ve been very active over the last five or so years, [including because it’s a] perfect cross section of SaaS companies selling into e-commerce and retail. Tava Health is a telemedicine platform for mental health for employees paid by employers, and healthcare SaaS is an area that we’ve also invested in a lot. In fact, its founder, Dallen Allred, is someone whose earlier company, Artemis Health, is another portfolio company.

TC: Out of curiosity, how did Peterson get involved with Bonobos?

IS: Co-founders Andy Dunn and Brian Spaly were students of our founding partner, Joel Peterson, at Stanford GSB. GSB is a key area of deal flow for us. Joel has been teaching there for almost 30 years. Ben [Capell, a partner with Peterson since 2010] has been involved in backing over 20 companies in the last eight years led by Stanford GSB alumni, and I’ve been guest lecturing there for seven years.

TC: You don’t invest exclusively in Utah, but you spend much of your time with local startups. How has the Utah scene changed since Peterson swung open its doors?

IS: Peterson dates back to 1995, so we’ve been fixtures in the Utah market for 25 years as a firm. When we started Peterson Ventures in 2008 investing Joel’s personal capital — it’s now a mix of institutions, family offices and high-net-worth individuals — there were no seed-stage firms. Now there are three institutional seed-stage firms, several Series A firms that will also invest in seed-stage startups, and active family offices and angel investors.

Also, where the firm used to have to work hard to convince coastal firms to invest in Utah we now have an abundance of mid- and late-stage investors from both coasts spending significant time and
investing meaningful dollars here.

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Extra Crunch Live: Join Kirsten Green for a Q&A next Thursday at 8 a.m. ET/11 a.m PST/6 p.m. GMT

Last month, the Extra Crunch Live team hosted conversations with folks from all over the venture community that ranged from the pre-seed world with Charles Hudson to shark territory with Mark Cuban. We’re starting off May with a packed agenda, including talks with Hunter Walk of Homebrew and Kirsten Green of Forerunner Ventures. 

Kirsten Green is one of the most respected VCs in the country, with investments in Bonobos, BirchBox, Dollar Shave Club, Glossier, Outdoor Voices, Rockets of Awesome, Hims and Modern Fertility

TechCrunch’s Jordan Crook and Natasha Mascarenhas will host the chat with Green and talk about how D2C is changing amidst the coronavirus pandemic. We’ll get into the opportunities ahead for consumer brands, advice she’s giving portfolio companies and how to spot a breakout company. Extra Crunch members can also ask their own questions, so come prepared! 

Green founded Forerunner Ventures in 2010 and has already seen a number of high-profile exits. One of the firm’s first checks went to Dollar Shave Club, which sold to Unilever for $1 billion in 2016. We’ll ask if her investment appetite has changed, which sectors she’s newly bullish on and what metrics are now more important than ever when pitching her. Of course, we’ll get the record on if Forerunner is open for business right now — but we have a feeling it is. 

Kirsten is a founding member of the female mentorship collective All Raise, so expect some conversation on how the landscape is changing for underrepresented founders. 

If we have time, we’ll get into influencer culture, misconceptions about D2C and how founders should think about pitching Green. 

During the call, audience members are encouraged to ask questions. We’ll get to as many as we can, but you can only participate if you’re an Extra Crunch member, so please subscribe here. 

Extra Crunch subscribers can find the Zoom Link below (with YouTube to follow) as well as a calendar invite so you won’t miss this conversation.

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