Eniac Ventures, a seed firm with a focus on New York startups, is announcing its fifth fund totaling $125 million.
Eniac's four general partners — Hadley Harris, Nihal Mehta, Vic Singh and Tim Young — have been making investments together for more than a decade, and they've known each other for even longer, having first met at the University of Pennsylvania. Singh described the firm as "one of the OGs" in seed investing, while Mehta said, "Consistency has been our superpower."
The size of Eniac's funds has grown dramatically over the past decade, from its $1.6 million first fund in 2010 to its $100 million fourth fund in 2017. However, Mehta said the team approached the latest fund with $125 million as both a goal and a "hard cap."
The larger funds allow Eniac to make more investments, and to lead rounds even as the definition of a seed deal has expanded. (The firm says it can invest anywhere from $350,000 to $3 million in a single round.) At the same time, Harris emphasized that Eniac will stay focused on seed deals rather than Series As, and that it wants to remain "really collaborative, so that we never need to take more than half the round."
Eniac's general partners each make only two or three investments a year, which Harris said is "quite a bit less than your average seed fund."
"We always want to be the investor of record in the companies that we invest in, leading or co-leading these rounds," he continued. "And we want to have the bandwidth to be partners with them in the early stages of their journey. We think the only way to do that is concentration."
Eniac's portfolio now includes more than 120 companies, with 50-plus exits. Recent successes include mobile messaging company Attentive (which raised a $230 million Series D last fall), podcasting startup Anchor (acquired by Spotify) and online retailer Boxed (which recently partnered with one of Asia's largest brick-and-mortar companies, Aeon).
While Eniac initially billed itself as a mobile-focused firm, it now invests across software-as-a-service, developer platforms, consumer and deep tech. Harris said they're not pointing to any specific industries or trends that they might be focused on because, "We want to be balanced between thesis-driven and opportunistic ... The theses that we tend to focus on tend to be on a per-partner basis and change pretty quickly."
The firm is headquartered in New York, with an office in San Francisco. Hadley said New York-based startups remain a priority, while at the same time, "We also believe that great founders can be anywhere and we're more and more interested in distributed teams."
Singh added that despite the hype around other emerging startup hubs, "A lot of the founders we partner with in New York are staying in New York. They have not left."
Those founders might hire team members elsewhere, he said, but there's a higher bar for remote employees. And if a startup wants to be fully distributed, "You have to be fully remote and distributed first. You can’t go distributed later; you have to very intentionally build the organization in that way from the start."
As for the team's longevity, there's a potential downside from a diversity perspective, especially since all four of the founding GPs are men. However, Eniac has recently promoted two other team members — Vice President of Finance and Operations Anna Nitschke and Investor Kristin McDonald, who Singh noted "votes on deals with us" and "feels as if she has an equal say in how the firm is run." And the firm plans to hire six new team members this year.