FICA Ventures is a five-year-old, LA-based badge stage fund that has been spraying business start-ups as well as spraying art tech companies and healthcare IT startups. Or FDA approval
The firm’s investors seem to think it’s doing a good job. After raising 41 41 million for its first fund, followed by the 77 77 million fund that FICA closed in 2019, the organization is today announcing the third flagship fund with an investment of 160 160 million. Will be done, along with a موا 35 million investment opportunities fund.
This is a great endorsement for such a young firm. Still, on top of 10 promising portfolio companies – including Formative, Santa Monica, California. Pipe is a Miami-based startup that allows companies to sell their recurring revenue streams on its platform and raised 250 250 million in May, valued at 2 billion. And Papaya Global, an Israeli startup that sells payroll, hiring, onboarding and compliance services and raised $ 100 million earlier this year – firm co-founders Eva Ho and TX Zhou say they are now It’s getting harder to do what you want to do. “It’s definitely a crazy time,” Ho offers.
We had a clear conversation with this couple yesterday, lightly editing for the length below.
TC: It is now one of the largest seed stage firms in LA. What percentage of your investment is local?
EH: We think we have a home court advantage, so 40% of our deals are here, then the rest are in markets like Seattle, New York, Boston, Austin, Chicago. We recently signed a deal in Toronto because they have a good AI community there. But we still have a strong belief in the need for boots on the ground so go after geographies where we can fly to board meetings and be there to help physically. [our founders] When they need us.
TC: Your new flagship fund is more than double your last fund. How much will this affect your investment?
TZ: Our check size will grow a bit together with the market. As you know, seed cycles are now quite large. I think the initial checks will be in the range of $ 1 million to $ 3 million. With the last fund, we saved up to $ 6 million per company and now we will save up to $ 10 million.
TC: Tell us a little bit about investing in a market where everyone is a founder, and everyone is an investor.
EH: It’s definitely a crazy time. Looks like we’re running a marathon. And Trying to stay in a sprint requires a long look and bets with that horizon in mind, but at the same time, early and follow-on decisions are made very quickly.
TC: How do you keep making good decisions when things are moving so fast?
EH: The work we are doing includes increasing the size of the team and working harder on an industry than ever before so that we have more preparation in mind.
TZ: I think in the past, seed funds could end up in the fields as well as being pure generalists. But for the last 12 months we have been forced to understand more subdivisions in each of our vertical sections. Within Fantic, for example, we’ve taken a deep dive into real estate and insurance in a way that helps us get into deals. [prepared] Explaining how fast they are moving these days.
TC: What is the fastest deal you have made?
TZ: In the past, the deals we were seeing were happening in two to three weeks. Now the average time to make a final decision is probably a week to a week and a half. I would say the fastest we’ve moved is in five days, in a situation where we’ve known the business for years, so there was strong personal endorsement. He was also a good founder-market fit in terms of what he wanted to do.
EH: We just pull ourselves out of some of the cycles that are going on. [super fast] And / or expecting a pre-diagnosis is just crazy. You now see many rounds of pre-badges that are pre-product, pre-traction, pre-revenue at prices of 15 15 million or 20 20 million or after 30 30 million. We will definitely focus on the right things, but there is a lot of sweep in the market right now.
TC: If the conditions are right, are you funding pre-badge, pre-product, pre-traction teams?
EH: Quite frankly, we’ve moved on a bit earlier in some cases. In the first fund, we. [invested about] 15% in pre-badge startups, which means very fast products and very fast traction for us and sometimes no traction. At Fund Two, we’ve invested maybe 25% in pre-seed deals because really good founders who have been shown to be able to execute and have a vision وہ they snap fast, so you Adopt and prepare a little and go a little further down. That said, I think almost all of the companies we fund have something in common. [minimum viable product] And some early design partners, even if they don’t have a significant income yet.
TC: What percentage of your investment in your current fund has gone back to the founders?
TZ: I would say 15 to 20. Of course, we cannot and will not limit ourselves. [serial entrepreneurs], But with repeated founders, deals move faster than ever.
TC: What’s the funniest thing you’ve seen in this go-go market?
TZ: I think the funniest thing we’ve heard is the funds are making decisions after a 30 minute call with the founder.
TC: Would you ever pass a company because you’re not so passionate about the rest of the cape table?
TZ: The pace of deals has forced us to rapidly increase what we care about. In the past, we had the luxury of having a long laundry list of things we wanted to check out and in a positive way, we were forced to focus on three to five things that we really care about every deal. Do
The big challenge is that investors who make decisions in 30 minutes create unrealistic expectations of the founders. Sometimes they expect everyone to process the information quickly, and I think what they’re missing is that these funds aren’t processing the information.
TC: What is one way to slow down and distract the founders?
TZ: We actually tell each founder that we’re close to deciding on a complete list of each founder we’ve supported in the past with their contact information.
Initially, we did this to help us win deals, but I think the founders soon realize what it’s like to work with us.