The US has had solo VC fund managers for many years but the trend is only just starting to catch on in Europe. One of the newest is Underline Ventures, started this year by Bogdan Iordache in Romania. His career trajectory towards being a Solo GP fits the profile: a former entrepreneur, a key player in the Eastern European tech scene, a founder of the How to Web conference, and a former VC in a multiple Partner team.
Above all, what Europe needs more of is these ‘funds of funds’ which are specialised in working with this new wave of European Solo GPs.
Hypernova, a $25m fund which soft-launched in June has been founded by experienced investor Tugce Ergul. She plans to not only invest in other funds but also directly into startups. Ergul was formerly with Angel Labs, an “investor accelerator”, which spread across 44 countries.
Speaking to TechCrunch, Ergel said: “There's a new wave of funds coming up. We're talking about successful founders that are now starting their own funds to invest in new entrepreneurs. There are partners leaving their former funds starting their own funds, because now it's easier and cheaper than ever to start a fund. And there's more support for solo capitalists.”
So how does it work? Hypernova puts 40% of its fund into Solo GP funds, and the rest directly into startups, with 50% in the US and 50% in Europe.
Ticket sizes will be $500k-750k into these Solo GPs who are raising their first fund, and Hypernova will aim not just for financiers but potentially journalists, angel investors, former entrepreneurs, or Associates / Partners spinning out of their previous VC fund.
Hypernova offers new GPs support on the fund management side, the tech needed, LP introductions, branding support, and coinvestment opportunities
Ergel added that in the past no LP would give Solo VCs any money: “Now there's a there's a new world out there you can find LP money if you're just one person and a solo GP. Starting funds has become cheaper. You can set up a fund for $10,000 and your fund admin costs are really low. So it's just making the access which much more easy for these fund managers. So we want to back those fund managers. Then that's where the hybrid play comes into place because the other half of the fund is a direct investment vehicle. And we will either co invest with these funds that we invest in, or we're going to invest in the follow on rounds into the winners of these fund managers.”
For its direct investments, Hypernova plans to focus on automation, retail, finance, logistics, transportation and shipping, with $250k-500k ticket sizes, and it won’t take board seats.
Hypernova is claiming to be the first female-led solo GP fund in Europe and the first female-led solo GP fund-of-funds in the US
Since its soft launch in June Hypernova says it has:
- Invested in an early stage infrastructure fund based out of San Francisco
- A London based fund managing athletes' money
- A Berlin based, solo GP fund
- LA-based deeptech fund
- San Francisco based fund investing in LP secondaries (Fund II).
- Invested directly in a hydrogen marketplace based out of San Francisco
- DevOps for carbon removal companies based out of Berlin
- Cohort based learning and talent platform based out of London called Neol
- a Micro-fulfillment platform to optimize the last mile
It now plans to open an office in London and hire a London based partner as of January 2023.
And it’s launching an LP diversity and inclusion program to get new investors into the fund-investing game where they could co-invest with with very small amounts.
“I’m a solo venture capitalist myself,” Ergel added. And that's also one of the new things for the markets. I started this because I experienced so many difficulties and issues myself being a solo GP. If I had started this in the US as a pure US focused American fund, I would have closed it in six months. But because I wanted to do something that's bridging US and Europe it took a lot longer.”