Pre-seed and seed companies today have a new pool of capital to tap into. twelve downa New York-based venture capital firm, closed with $108 million in capital commitments.
Taylor Greene and Byron Ling founded Twelve Below in 2021 after previous careers at Collaborative Fund and Lerer Hippeau for Greene, and Canaan and Primary Venture Partners for Ling. However, the two know each other and have worked together on deals for a decade, including investments in Mirror, Papa and K Health.
Greene and Ling told TechCrunch that their philosophy is reminiscent of the “old ways of venture capital.” They say it’s all about confidence: keep your fund size small, high conviction, high ownership, and make a low amount of investments.
“Our mentors told us that this kind of old-school approach will pay big dividends,” Greene said. “We started with a blank sheet of paper, designing the company around that mindset based on relationships and trust with entrepreneurs.”
Twelve Below aims to lead or co-lead seed and pre-seed financings with the goal of obtaining a 10% to 15% ownership stake in the fund’s core investments. The firm invests in New York City-based startups in the financial technology, healthcare, energy, SMB, and consumer sectors.
Its first fund was $50 million and the portfolio includes Accrue Savings, Odyssey Energy, Croissant, Campus and Truehold. Greene and Ling say more than 60% of their portfolio has already raised follow-on capital.
Greene and Ling say their big differentiator is their focus on trust. They also don’t have a platform team, so the founders work directly with them.
“We believe that trust is what underpins the ability to really know what’s going on in business, but it also has a huge impact,” Ling said. “Their success and ours are very intertwined. We’ve been very deliberate in that model because we think founders really want personalized attention with a trusted individual partner, which is very different, and that’s why we’ve resisted the model of having a platform team and having all these different people that potentially they could fragment. that relationship over time.”
The new capital is spread across two new funds, $80 million for its second early-stage fund and a $28 million opportunity fund, giving the company total assets under management of $160 million. The firm is backed by entities including large university funds, institutional funds of funds and large family offices.
It was their large number of portfolio companies seeking follow-on capital that made Greene and Ling think about how they could further support their companies. Greene described the opportunity fund as “a little unique.”
“Just invest in our existing businesses,” Greene said. “We saw this disconnect in the market, where we are very excited about pricing, especially as we advance our existing businesses. The price, from a risk-reward perspective, seems excellent. “We are also very excited about the portfolio setup, which gives us the ability to invest more money in our existing businesses.”
The couple invested in 21 companies with their first fund and plan around 25 for the second fund and between five and eight companies for the opportunity fund. They haven’t made an investment from the second fund yet, but say it will arrive early next year.
