Our 2016 Foundry Group Fund and A Little History

Yesterday we closed our fifth fund, Foundry Venture Capital 2016, L.P. As with all four of our other funds, it’s a $225 million fund.

In 2007 we raised our first fund – Foundry Venture Capital 2007. We subsequently raised a $225 million fund in 2010, another one in 2013, and a late stage fund in 2013. Our 2013 fund was originally raised in 2012, but we didn’t start investing it until 2013 so we renamed it 2013.

Except for our late stage fund, each of our funds has 30 investments (+/- 2) in it. Each is $225 million. Each is roughly invested 1/3rd into companies in Colorado, 1/3rd into companies in the bay area, and 1/3rd into companies in the rest of the US (Boston, NY, Seattle, LA, Portland, Austin, Minneapolis, Washington D.C., Burlington, and Phoenix.)

Our investment strategy has been unchanged since we raised our first fund in 2007. We are thematic investors, an approach we pioneered with a few other firms that today is trendy (and often mislabeled). We invest $5 million to $15 million in a company over its lifetime. We are early stage investors – if you’ve raised more than $3 million you are too late for us. We only invest in the US, but will invest anywhere in the US. We are syndication agnostic – we’ll invest with other VCs or invest by ourselves.

Our late stage fund gave us flexibility to invest more money in our later stage companies. We aren’t a growth investor, but rather interested in investing more money in our winners. This fund has already seen two big exits – Gnip and Fitbit.

We view our jobs as taking a box full of money that our investors give us and giving them back a bigger box full of more money over time. It’s pretty straightforward. We try to do this our own special way while having a lot of fun doing it. We have a small number of investors (around 20) who we appreciate deeply for supporting us in our journey.

And we couldn’t do any of this without the founders we get to work with. We appreciate them more than anything. Well, other than Jason’s musical abilities. For example:

  • Well congratulations. You guys are exceedingly regular and consistent, which can take time to appreciate.

    I was just on a run this morning and caught myself thinking about your videos and about not taking yourselves too seriously. You’ve been consistent even in that regard.

    It’s been fun watching you invest and reading the blog as well. I’m glad it will continue for some time.

    • Thanks Jess. I appreciate you showing up here regularly in the comments and challenging my thinking of stuff!

      • Seriousness has a cost as to much creates fear ( WE Deming rule 8 ) , Brad via Mary is letting us tour Foundry with heads of some very serious organizations to show them how an agile non serious focused organization can target a $50 m up project inside 60 minutes whereas a serious organization spends $50 m on seriousness , buildings , staff , all sorts of crap over years and often produces nothing.

        The Joy of Foundry ( + Techstars ) is you can feel the non serious ambiance in the air and no the guy with the awesome shirt wild hair no shave is not the janitor or head programer he is a foundry / founder busy slaying seriousness dragons to make more Hamilton’s

  • In a week when reading thousands of lines of code is the most exciting thing we get to do…This video made all of us smile..Thanks for the ‘pick me up’

    • It’s all about the hamiltons baby…

    • Rick

      “reading thousands of lines of code”
      .
      Oh my… I’m soooo glad I stopped programming. I don’t miss those days.

  • Congratulations. What’s the significance of 225M?

    • We like February 25th a lot …

      It’s random. We went out to raise $175m for our first fund and ended up at $225m. We decided never to raise a bigger fund, so we’ve capped them all at $225m.

      • February 25th is my birthday.
        that explains a lot of things now 🙂

        • It is now an even better day!

  • Felix Dashevsky

    Congratulations, Brad.

  • congratulations brad. foundry is an inspiration for me as a new VC.

    • Thanks and I’m glad. Holler anytime.

  • It is hard to stay small and focused on what you know and what works for you. Foundry does this as well as any firm in the VC business. Joanne and I are proud and happy to be one of the lucky 20

    • And we literally wouldn’t be here without your help.

      • Thanks to you and @fredwilson:disqus both for sharing your fund data — a lot of vcs don’t. You mentioned there’s 30 investments per fund investments by fund/date? Similar to

        MVP: http://www.milestonevp.com/portfolio/notable-exits/

        Scout: http://www.scoutventures.com/#portfolio

        • If it’s similar, it’s by accident. We simply backed into the number of companies per fund by the math based on the size of the fund. Our typical investment – over the life of a company is $5m – $15m. We knew our pace for the four partners is around 10 investments a year. We wanted time diversity in the funds and a three year horizon felt about right. None of it was precise, but it all fit into around 30 investments per fund.

    • Matt Kruza

      This is a little like lebron and his super all-star team stacking for basketball (which as a clevelander i am currently enjoying). Isn’t there a limit on number of successful investors that can be in the same investments / funds? 🙂 all teasing of course. Congrats to both of you. I have only really followed your two blogs in depth last 12 -18 months, so curious, did either of you heavily influence the other’s blogging approach / outlook? Any of it related to you investing together (whether in brad’s fund, or in portfolio companies). If you have detailed this earlier in a previous post i apologize, just curious !

      • I’ve been an investor in USV from the beginning and was an investor in Fred’s previous firm Flatiron Partners. Fred is the ONLY individual investor in our fund – see http://feld.com/archives/2014/07/vcs-dont-bullshit.html

        We’ve only actually had two investments in common since we started Foundry in 2007 – Zynga and Return Path.

        We’ve made several investments in companies Joanne seeded. The most visible one is littleBits.

        I’m sure we’ve impacted each other’s blogging. Fred started before me (I don’t know how long – months, not years probably – he might remember) and we were both investors in FeedBurner (for me from Mobius, him from USV.)

        All that said, I’ve learned an enormous amount from Fred over the years. I treasure his and Joanne’s friendship.

        • Matt Kruza

          Very awesome. And thanks for the detailed response.

  • Congrats Brad and the Foundry team. Looking forward to see your new investments from this fund, and the new video for this year 🙂

    • Thanks Darius. Hope to see you in Boulder again at some point.

  • Congrats!

    • Thanks. We timed it to come out around the same time at your third book about Mara.

  • Jordan Fliegel

    Congrats Brad!

  • bwertz

    Congrats on the new fund! Love your consistency in an ever-accelerating / changing VC world.

  • Ed Roberto

    Congratulations all around!

    • It’s awesome to see you across the hall at Techstars on a regular basis. I’m getting geared up for my next trip halfway around the world with you.

  • Congrats guys, does this mean more FG Angels activities are in the offing?

    • FG Angels is not connected to this fund. We have been funding FG Angels investments from our 2013 fund.

  • Brent Traidman

    Congrats Brad and Team!

  • Grats!

  • Rick

    Any chance you would tell us the return investors got from you other funds. Was it 10x or 50x or 100x? Just wondering.

    • We don’t disclose the numbers but one of our investors (UTIMCO) publicly discloses all of the data (they are required to) so a little Google-foo will get you some data.

      • Rick

        Are you gonna’ do any idea stage investing with this new fund?

        • What is idea stage investing?

          • Rick

            That’s when you invest, instead of friends and family, to get the product built. Very early stage when all the entrepreneurs have is a company entity and a plan.

          • We do plenty of investments like that.

  • Kurt Dalton

    Glad you unearthed that video. It’s got a Bell Biv Devoe vibe to it.

    You should break out the suits again for The Annual Meeting.

    • We considered wearing tuxes this year but went with our normal uniforms of jeans and funky shirts.

  • Rick

    Anyone know how to find out who sits on the board of directors for a company?

  • Den

    Congratulations Brad (and the rest of the team of course), you have such an interesting approach (1/3rd based on geography), other VC firms should start looking at this kind of local and global approach

    • When we started Foundry Group, even though we were based in Boulder, we knew we didn’t want to be regional investors. Ryan and Jason were both from California and I’d been investing all over the US since I started in 1994 when I was living in Boston. So – we made it part of our core strategy.

      We originally thought it would be 50% in Colorado and 50% everywhere else but we quickly changed this to 33% Colorado, 33% Bay Area, and 34% everywhere else.

  • David Cohen

    congrats gang! i must have missed my LP package. 🙂

    • Oopsie.

    • Rick

      Hey you only get one magic ticket. There are others waiting. :0)

  • How in hell did you get Chilly Gonzales on your video 😉 He’s huge! WOW – you guys really do rank! 🙂

  • Tom N

    This group is always a refreshing change from the seriousness and formula followers of this industry. Very original.

  • Absolutely love the discipline and the clarity.

    • Thanks. You’ve been a great partner to work with.

  • Congrats on yet raising another fund — a new batch of founders who will get the privilege to have Foundry work with them.

    And some might get to stay at your house in Keystone when comes board meeting time — friggin lucky (and well-deserving) bastards, ha, ha!

    My wife and I always get a kick out of watching the video. Incidentally this morning I was singing to her “Hey, you’ve been on my mind. It’s been a few hours since I’ve seen your slides…”

    I’m planning to watch it again with her soon, it’s just a lot of fun.

    • The Mendelson earworms are pretty devious.

      • Well said, ha ha! Yeah, he’s very talented actually, from the composing, the arrangements, the production to the actual singing.

        Our respective guitar collections would rival one another — the small difference is I’m missing the multi-million dollar mansion to house them in! Oops…

  • This embodies discipline, consistency. Impressive.

    • Thanks. Looking forward to seeing you in a month or two.

  • Awesome! you rock. looking forward to the next chapter. I am not sure people understand how difficult it is to do what you all do. Congratulations! to you, Jason, Ryan and Seth and everyone at Foundry and all the Founders and Entrepreneurs you tirelessly work with. “Give first” philosophy paying rich dividends…

    • Thanks Bala. I’ll say the same for you and your efforts in Iceland. It’s amazing to see what you’ve accomplished / led in the last five years.

      • Thanks Brad, I really appreciate your comment and thought.

  • Congrats! That song/video is still completely hilarious as well.

    • We made it a number of years ago. It was our first video. The second one is even better.

  • jheltzer

    big congrats Brad. It’s tempting to raise bigger funds, but I deeply respect your fund’s discipline to stay the same size to continue to make the same type of investments that have produced such success in the past. Onward!

    • Thanks Jason. I look forward to seeing you soon.

  • Was there a typo – you said we raised a fund, or it should be we raised our hand…(and they sent checks?) LOL 🙂

    Congratulations for your continuous success in raising, funding, mentoring, growing and re-investing. I’m learning a lot from you, and thanks a lot for that too.

    • Thanks. It’s always harder than just raising your hand, but we are fortunate to have 20 very supportive investors.

  • David C. Youngentob

    How much of what you outlined has been static and from the beginning or emerged as a comfort zone as you’ve raised subsequent funds ? (i.e. geographic, syndication, or stage preference, etc)

    • It’s all been consistent from the beginning. We set a strategy in 2007 when we started Foundry Group and have been very consistent since.

      • David C. Youngentob

        What events could come to pass that would prompt breaking from the thesis ?

  • robertcpease

    Congrats Brad. Fortunate to have worked with you in the past in a Foundry company and always love to see what you all are funding.

  • Pointsandfigures

    Congrats on building sustainable VC!

  • VR Vadoothker

    Wishing all best, a fantastic job
    VR Vadoothker