Discover more from January Ventures' Substack
January Ventures Fund II
We launched our first fund at the end of 2018. Now we’re back with January Ventures Fund II: a $21 million fund to replace the friends & family round and re-write the network in venture capital. We invest at the earliest stage and open doors for emerging founders building the future.
We’re growing up: Fund II is our first institutional fund and a continuation of everything we’ve built. We’re thrilled to welcome new institutional LPs this time around, including Wellington, IDEAL Investments, The Kapor Foundation, and Bank of America.
We started January Ventures because we wanted to do things differently, and we’ve been raising eyebrows from the start. With our first fund, we grounded our approach in an ethos of radical transparency and access. We *gasp* invited founders to cold pitch us. We’re an all-female venture fund. We didn’t launch a rolling fund, build in public, or raise our fund overnight from our Twitter followings. We were a fully distributed team before that was a thing; in fact, we’re located on two continents and have always been comfortable investing over Zoom. Most importantly, we show up for founders, even when things aren’t up and to the right.
Here’s what we’ve learned over the past three wild years.
WHAT WE’VE LEARNED:
The “pipeline problem” is a myth — or even worse, an excuse for complacency. Female founders get 2% of venture dollars, yet we’ve met 11,000 of them since 2018. That’s right, 11,000 (!!). If we ever hope to achieve social equity in business, venture capital needs to stop treating female and underrepresented founders as mythical creatures … and instead just put the work into finding them. We can tell you from experience they exist, and in large numbers.
Founders need long-term residents, not “venture tourists.” It’s never been easier to start a fund, but is that a good thing for founders? Founders deserve investors who are in it for the long term, who take an institutional approach to the early stage and will be there through the ups and downs. Building a long-term firm is our mission at January.
Networks have gone virtual. Venture capital used to be a hyperlocal business, but not anymore. Virtual communities and distributed teams are here to stay, and networks are being built based on shared values, ambitions, and expertise rather than proximity. The network that founders need today, in 2022, is dramatically different from what they needed even a couple years ago.
People are what matter. Capital is a commodity, and founders are choosing the people they want to work with. Founders need a community more than ever, one where they can bring their whole selves and build genuine connections to support them through the good, the bad and the messy.
OUR COMMITMENT TO FOUNDERS:
Here’s what we’re doing as a result of what we’ve learned, and the commitments we’re making to you, the founders we serve:
1. We’re re-writing the network in venture. We’re eyes wide open about networks: they’ve been ingrained in venture from the early days. The network-driven nature of venture will never completely change, but the Sand Hill Road networks of yesterday feel stale and pale to modern founders. Startups are being built differently today, and founders want a next-generation network that mirrors the diversity, decentralization and global nature of startup building today.
The 50 companies in January’s portfolio embody this next-gen network. This doesn’t look like your typical venture portfolio, and that’s by design.
When founders arrive at January, they can take a deep breath, let their guard down, and finally feel like “this was built for me.” Do you not own a fleece vest or a pair of Allbirds? No problem. Do you have more questions than answers? No big deal. Do you have outsized ambition? That’s all that’s really needed to fit in here.
2. We’re replacing the friends & family round. The problem with the traditional friends & family round is that not everyone has access to one, and this has caused a lot of inequity in tech. When an extreme imbalance starts so early, it is hard to correct later. This might sound contrarian, but we believe there are talented, ambitious founders who have the potential to build the next decacorns, but who don’t have a rich uncle and an Ivy League degree.
3. We’re bringing radical transparency and access to VC. When we launched in 2018, we told founders, you don’t need a warm intro, pitch deck, or revenue to reach us. We publish the questions we ask and have a clear, concise diligence process. And we’ve put our money where our mouth is: 18% of our investments have come through cold pitches. We realize it is an unusual approach in an industry known for making founders pass “the test” with a warm intro, but it feels like common sense to us.
4. We’re building a future of tech that looks different. We’re in this for the long haul and are focused on what we can do today to increase the diversity in tech. Why? Because we think it benefits our portfolio and drives future returns. We’re not a charity; we’re a venture capital firm, and diversity is good for business.
We’ve built a 100-member Operator Network of senior execs at leading tech companies like Uber, Twitter, Compass, Toast, Google, Amazon, and Stripe. An operator network isn’t unique, but one where the majority identify as female is. This gives our portfolio a unique pipeline of talent, advisors, and expertise. Plus, some of our operators have become founders in our portfolio.
We launched a venture fellowship program to give women and people of color an on-ramp to venture capital and help create a broader set of check writers. To date, 60% of our past venture fellows have received full-time VC jobs at top firms like a16z, USV, The Chernin Group, and B Capital.
We’ve designed our LPs base to reflect the diversity of our portfolio. Our LPs include institutions, leaders in tech, and also many first-time LPs — unicorn founders making their first investments, new family offices building their venture portfolios, and operators looking to establish their track records. We were deliberate about building an LP base that is over 60% women, and we take seriously our responsibility to help grow the next generation of LPs.
We couldn’t be doing all of this without our incredible LPs, including IDEAL Investments, The Kapor Foundation, Bank of America, Wellington Management, Insight Partners, Atomico, Bonfire Ventures, First Close Partners, NEA, Bain Capital Ventures, Marc Andreessen, Arlan Hamilton, Chris Dixon, Howard Morgan, Janneke Niessen, IPQ Capital (Fiona Pathiraja & Søren Fryland Møller), Scott Mackin, Hilary Karls, Siobhan Nolan Mangini, Saamra Mekuria-Grillo, Julia Collins, Guy and Hannah Raz, Sandi Lin, Salle Yoo, and Andreata Muforo.
The irony of venture capital is that although the industry is paid to invest in innovation, there hasn’t been much innovation in the business model over the last 40 years. We’re here to break that mold. We believe the biggest opportunity in venture capital today is a much larger, more decentralized, geographically distributed, and diverse group of people building things that empower people, solving a much larger range of problems, and addressing the most pressing problems of our generation.
In order to find you — that talented, ambitious early-stage founder — we are breaking the outdated rules that have guarded access to capital. We are the new friends & family round. And the fresh, new network that finally was built for you.