Pre-seed and seed companies have a new bucket of capital to go after now. Twelve Belowa New York-based venture capital firm, closed $108 million in capital commitments.
Taylor Greene and Byron Ling started Twelve Under in 2021 after previous careers with Collaborative Fund and Lerer Hippeau for Greene, and Canaan and Primary Venture Partners for Ling. However, the pair knew each other and worked together for a decade, including investing in Mirror, Papa and K Health.
Greene and Ling told TechCrunch that their philosophy is reminiscent of “the old way of venture capital.” They say it’s about confidence – keep your fund size small, high conviction, high ownership and make small number of investments.
“Our teachers tell us that this kind of old-school approach will bring big returns,” Greene said. “We started with a blank piece of paper, designing the company around that mindset based on relationships and trust with entrepreneurs.”
Twelve Below aims to lead or co-lead pre-seed and seed financings with the goal of acquiring a 10% to 15% ownership stake in core investments from the fund. The firm invests in New York City-based startups in the areas of fintech, healthcare, energy, SMB and consumer sectors.
Its first funding 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 continues to raise follow-on capital.
Greene and Ling said their biggest difference is their focus on trust. They also don’t have a platform team, so the founders work directly with them.
“We think that trust is what drives the ability to know what’s going on in the business but also has a big impact,” Ling said. “Their success and our success are very much intertwined. We are very intentional about that model because we think that founders really want personal attention from an individual trusted partner, which is very different and why we restrict the model with a platform group and have all the different individuals that can be divided. that relationship over time. “
The new capital is spread over two new funds, $80 million for a second early-stage fund and a $28 million opportunity fund, giving the firm total assets under management. for $160 million. The company is supported by entities, including large university endowments, institutional funds and large family offices.
It was the large number of portfolio companies that followed the capital that got Greene and Ling thinking about how they could support their companies. Greene described the opportunity fund as “a little unique.”
“It only invests in our existing companies,” Greene said. “We’re seeing this disconnect in the market where we’re excited about pricing, especially when we follow our current companies. The pricing, from a risk-reward perspective, looks good. We’re also very excited when how the portfolio is structured, so it gives us the ability to put more money into our existing companies.
The pair has invested in 21 companies with the first fund and plans around 25 for the second fund and between five and eight companies for the opportunity fund. They have not yet made an investment from the second fund, but say it will come early next year.