October 18-20 | Tucson, AZ

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New Fund for New York Startups Won’t Take VC Money

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October 18-20, 2023 / Tucson, AZ
The annual summit for research institution gap fund and accelerator programs, including proof of concept programs, startup accelerators, and university venture funds

The Story

New York has a new venture-capital fund run by people who disavow the term “venture capitalist.”

The Fund, as it is called, collected $3.2 million from some 75 startup founders and operators with the aim of investing in the next generation of New York entrepreneurs.

No professional venture capitalists were allowed into the Fund as investors, said Matthew Brimer, one of its co-founders.

“The best people to support early-stage startups are people who’ve been through this personally,” Mr. Brimer said.

Mr. Brimer is one such operator. He co-founded General Assembly, a New York startup that began as a coding boot camp and was recently acquired for $412.5 million by Adecco. Mr. Brimer created the Fund last year with three co-founders: Adam Carver, chief executive of Battlestar Capital and a former executive at AngelList; Jenny Fielding, managing director at Techstars; and Katie Hunt, an early employee of Warby Parker.

The Fund seeks to help its startups by leveraging the connections and expertise of its investors, Mr. Brimer said. Among the investors are Meetup co-founder Scott Heiferman, SoundCloud founder Alex Ljung, Casper co-founder Neil Parikh and Parsley Health founder Robin Berzin.

As an incentive to the first 40 of its investors, the Fund plans to share a cut of its carried interest with them. Sharing of the profit partners make from managing the fund isn’t unheard of. Both Data Collective and 8VC, for example, share a portion of their carry with some investors. But Mr. Brimer said that he hasn’t seen this model used in New York.

The Fund isn’t collecting management fees and has a limited budget. There is no office. Instead, all of the Fund’s investors are members of a Slack channel they use to propose and discuss deals.

The Fund’s co-founders decide on which startups to back. They also host in-person get-togethers, sometimes on the rooftop of Mr. Brimer’s apartment in Red Hook, Brooklyn, every few weeks, for the Fund’s investors and portfolio company founders.

Mr. Brimer said the Fund is writing checks starting at $50,000 for budding startups with a “high volume” strategy. It has already backed a dozen, including cryptocurrency startup Carbon, fitness studio CityRow, and freelancer marketplace Wethos. About 40% of the Fund’s startups have women founders, Mr. Brimer said.

Mr. Brimer started his first New York startup as an undergraduate at Yale University. That is when he began commuting into the city, eventually becoming a New York resident in 2009. The city’s tech scene has grown significantly in the decade that Mr. Brimer spent here.

“But the technology and startup community still has this underdog sensibility,” Mr. Brimer said.

It isn’t a dominant industry, he said, the way tech is in San Francisco. And that creates “a sense of camaraderie” that the Fund is counting on.


Source: New Fund for New York Startups Won’t Take VC Money – WSJ

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