Todd Chaffee has long been one of the most senior members of the late-stage venture firm Institutional Venture Partners. Chaffee joined IVP in 2000 after logging six years at Visa, and went on to lead rounds in numerous prominent later-stage companies, many (but not all) of which have gone public, including Coinbase, Compass, Klarna, Kayak, Omniture, Pandora and Twitter.
It’s a good business to be in, particularly when companies are going public at that clip. Given that the IPO window is now shut indefinitely, we wondered what that might mean for the firm’s model.
Chaffee — who, like contemporary Bill Gurley, won’t be making new investments out of his firm’s next fund — talked with us about that question and what else the pandemic means to the venture industry and to him personally. Our chat has been edited for length and clarity.
TechCrunch: IVP last announced a fund in 2017. I assume one is coming soon that you cannot talk about — unless you can talk about it?
Todd Chaffee: Yeah, we’re currently investing Fund 16. That’s all I can tell you right now.
Do you think it’s time to bulk up even more, or size down? There’s maybe more opportunity but also check sizes are going to get smaller, seemingly.
Rich Kerby and Rick Zullo founded New York-based Equal Ventures last year with the goal of investing in “founders who are bringing technology innovations to existing markets that will transform society and industry.”
In other words, they’re looking to back entrepreneurs looking to shake up existing industries that impact “the way we work and live.” Those industries include: insurance, logistics/supply chain, retail infrastructure and the care economy.
“We’re not focused on technology development, such as internet infrastructure, but more on the deployment of technology,” Zullo told me in a phone call. “Our core focus is to bring the knowledge and networks necessary to help founders solving problems in these complex and nuanced industries in their push to attract capital and bring products to market.”
Also, Equal has the ambitious goal of bridging the digital divide “between the combative worlds of incumbents and innovators.”
“One of our core beliefs is that by bridging that divide between the technology haves and have nots, benefits are more evenly distributed across all parts of society and industries,” Zullo said. “At the same time, we look to generate some great returns.”
The pair’s approach to sourcing deals for Equal Ventures is what they describe as data-driven. They spend the majority of their time researching and analyzing the dynamics of the markets in which they’re looking to invest. Their goal is to identify potential solutions to the market before it’s obvious.
Notably, they have an interesting mix of LPs, including Walker & Co. founder Tristan Walker and YCombinator CEO Michael Siebel. Other LPs include the founders of new Austin-based unicorn RigUp, traditional institutional LPs, university endowments, general partners of other VC firms and some Fortune 500 executives “who know how to move needles in these industries”
“Our LPs are a combination of industry operators, providers of investment capital and top-tier founders, which we believe is exciting alchemy for future success,” Zullo told Crunchbase News.
Equal Ventures had its first close last April and has since invested in six portfolio companies.
Those portfolio companies include: retail platform Leap, home renovation marketplace Block, employee benefits-focused WatchTower and Gerry, which aims to improve “the access, accountability, and affordability in the senior living market via a managed marketplace to help place seniors in the best facilities.”
Equal Ventures’ goal with the fund is to invest in 20 companies total with an average initial check of about $1.5 million, according to Zullo. It does not have a multistage strategy, he adds. Instead, the firm wants to get in at the early stage with a significant ownership stake.
“We’re a little bit more concentrated and focused on getting ownership early,” Zullo said. “We want significant skin in the game and at the same time, we don’t want to invest in too many companies so that we can make sure we have the time and resources necessary to be hands-on for those companies.”