Introducing our $100M fund
By Collin West, Conrad Shang, and Gopi Sundaramurthy
TechCrunch wrote about our new fund today. "Ensemble raises $100M debut fund to bet on startup teams — but not in the way you think". It's a great recap of how we focus on backing top teams. So we wanted to follow that up and share more about our mission at Ensemble.
Venture capital is in the midst of a tectonic shift. Fundraising and valuations are recalibrating, and there’s a new-found focus on profitability over growth at all costs. While many headlines paint a picture of doom and gloom, it’s important to remember that 95% of all the net new jobs created in the US are from companies less than five years of age. Funding job creation means supporting young companies and founders, which, if they break out, can impact and improve the lives of billions of users and customers.
Unfortunately, funding innovation hasn’t historically been very efficient. For any one startup that gets funded, we believe there are at least ten others that could’ve been successful but were overlooked. This hinders innovation, technological breakthroughs, and job creation.
Our team at Ensemble takes a fundamentally different approach. Ensemble improves the odds of selecting the right startups using data and software. With over a decade of learnings in data-driven investing, we’ve built and refined a platform that continuously ingests billions of data points on startup teams. Across our team’s investments in the last 4 years alone, we’ve had 5 IPOs and 6 acquisitions. For example, our team has been involved with investments in companies like Zoom Video, Udemy, Rover, Carta, ICON, Salsify, Aqua, and Groww.
Early stage investing is all about the early startup teams’ ability to execute a big mission. Our focus at Ensemble is to find and build relationships with outstanding teams, often well before there is obvious traction in the business. We proactively build relationships well in advance of when they’re thinking about fundraising.
Following these early successes and big wins, today we’re introducing a $100M fund. The data model we’ve built to discover successful teams is perfectly suited for today’s market trends. For one thing, there are simply too many companies to meet. Last year, tens of thousands of startup rounds were announced in the US alone. Compounding the issue, over the last few years in particular, startups have been experiencing unsustainable growth fueled by venture capital, making it harder to identify truly strong, durable teams and businesses.
Over 50% of our management fee goes to investing in our data platform to find and support founders. We proactively target specific teams and companies we believe have early break-out potential. We then spend significantly more time truly getting to know the founders and understanding the business. We have set an incredibly high bar and only make a handful of investments per year. Building such a concentrated portfolio signifies every investment made is both more serious and meaningful. If you are a founder, and you receive a message from the Ensemble Team asking for a meeting, you are a priority.
Our superpower is helping our founders move from a founder-led company to a leadership team-led company ready for hyperscale. The hardest thing in startups is finding product-market fit; the next most challenging thing is scaling a team to execute and fulfill the needs of your growing customer list. That’s where we come in to help, both with human capital and our unique data approach. Our team of functional advisors – spanning operations, finance, product/engineering, and HR – support this transition.
We don’t just provide high-level, general advice - we provide an in-depth, independent report with a 360 review of the senior leadership team. It helps identify gaps, opportunities, role adjustments, and areas that are working so that companies can reach their next level of growth. Our founders find this essential to their success.
This is just the beginning for Ensemble. As our platform grows, we’ll only get better at identifying and supporting the next great startup. We couldn’t be more grateful for the opportunity we’ve been given with this new fund to support even more founders as they build their vision of the future.