Cleo Capital, a enterprise capital agency based in 2018 by Sarah Kunst, is elevating as much as $20 million for its second fund, in line with a supply accustomed to the matter. A recent SEC filing reveals that Cleo Capital has already raised $6.7 million of that purpose, bringing complete belongings below administration to round $10 million. Kunst was unable to touch upon her fundraising efforts.
That new AUM quantity is near what Cleo Capital initially got down to do. When Kunst first launched her agency, she targeted a $10 million close. She ended up closing $3.14 million of that purpose, and now, she’s again to double down.
Fund II’s $20 million goal, if closed, would enable Cleo Capital, which invests in primarily pre-seed corporations, to begin main rounds. The agency has already been writing $1 million checks and targets a couple of 15-20% possession in its rounds.
“One of many the reason why we’re a pre-seed fund is as a result of in seed, particularly late-seed, you could have everybody from household workplaces to TikTok stars and rolling funds competing for decent rounds,” she mentioned. “Nobody is competing in pre-seed.”
There are corporations akin to Precursor and Hustle Fund that again pre-seed corporations, and lower checks round $100,000 and $25,000 to begin, respectively. Kunst sees the power to write down a $1 million pre-seed verify as a “large benefit.” Often early-stage founders with out household cash or deep networks should spend a giant chunk of time elevating their first spherical. It’s a variety of time to spend fundraising and never constructing an organization. If a agency can lower a giant pre-seed verify, she thinks that Cleo is “shopping for again six months of an organization‘s runway,” she mentioned.
Like many firms, Cleo Capital has turned to inventive measures to diversify deal circulate within the period of Zoom investing and pandemic enterprise. For instance, Cleo Capital launched a fellowship program for laid off staff throughout COVID-19 to advertise entrepreneurship.
Matt Pauker, a repeat founder who has offered corporations to Coinbase and HP Enterprise, was one of many advisors of that program. Pauker has joined Cleo Capital as a basic accomplice presumably to line up with the timing of Fund II.
Whereas the agency has no racial or gender funding focus, about 92% of its present investments are corporations began by underrepresented founders.
The agency’s portfolio consists of Planet FWD, mmhmm, Lunch Membership, and StyleSeat. As for brand new alternatives, Kunst says that Cleo Capital is something that helps the person flip right into a collective. With the expansion of the creator financial system and solo-entrepreneurs, folks want to determine the way forward for revenue, well being care, and profit, Kunst defined.
“All of these items are laborious for folks to do as a person,” she mentioned. The vast majority of Cleo Capital’s portfolio is predicated outdoors of Silicon Valley.