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Mr. Solo Dolo
Last month, Harry Stebbings of 20VC raised a $400M fund to invest in startups across Europe
The feat was nothing short of historic:
At just 28 years old, Stebbings managed to raise $125M to invest in seed rounds and $275M to invest in Series A rounds
$400M is 2.5X the last fund, $140M in 2021, and 50X the first fund, $8M in 2020
20VC’s latest fund took Stebbings near the top of the European VC food chain
In today’s memo, we will revisit 20VC’s humble beginnings + explore the landscape for solo / micro-GPs
mega
I’m really fed up of everyone s******g on Europe. We have unbelievable companies, and we have incredible people. We need to make Europe great again. MEGA!
Stabbings was just 13 years old when The Social Network hit movie theaters.
After watching Jesse Eisenberg play Mark Zuckerberg, Stebbings fell in love with startups and venture capital.
Five years later, the spark lit at 13 turned to a raging fire. Stebbings directed his energy towards launching the Twenty Minute VC, a podcast where he would interview a famous venture capitalist for 20 minutes.
His first interview was in January 2015 with Guy Kawasaki, a well known venture capitalist in Silicon Valley. After a few months of interviewing, Twenty Minute VC reached 100,000 listens on an episode with Mark Suster. The podcast’s quick success began to interfere with Stebbings’ academic career. He was an undergraduate at King’s College studying law, and balancing course work with his entrepreneurial endeavors wasn’t realistic
don’t let your boy’s schooling interfere with his education
At the end of that year - December 6th to be exact - Stebbings was in a lecture at King’s College when his phone started buzzing.
On the other end of the line was Arielle Zuckerberg, Mark Zuckerberg’s younger sister
Arielle was an investor at Kleiner Perkins Caufield & Byers
Joined Coatue in 2018 to launch an early stage investing fund
Joined Long Journey Ventures as a General Partner in 2022 with Cyan Banister and Lee Jacobs
it all comes full circle
From that call came clarity, an epiphany even. This is what Harry wanted to do, not law.
He called his parents after the lecture and told them he was dropping out.
So what is it exactly that Harry wanted to do?
He wanted to be more than a podcaster; a desire to invest capital into early stage startups consumed him. The podcast was simply a means to that end, albeit, a means that he enjoyed dearly.
The strategy was to interview founders, limited partners, and fund managers - the three primary stakeholders in venture capital - and build a powerful network that he could leverage to launch a fund.
trifecta
After two years of grinding, he was averaging 300,000 downloads per episodes… and received 32 job offers to join venture capital firms.
Stebbings chose Atomico, a European VC with around $5B AUM. Atomico offered him a role as an Entrepreneur in Residence on their investment team. The collaboration lasted less than seven months before Harry left abruptly
In 2018, Harry founded Strive VC alongside Fred Destin
StrideVC was a $50M seed fund focused on startups in the UK
Fred was a veteran venture capitalist in the UK, his last role was as a partner at Accel
Harry met Fred after interviewing him for 20VC. Fred became a mentor over time and a year later, the two saw an opportunity to partner on a fund
However, 20VC Fund in its current form can be traced back to 2020.
This was when Harry launched the first 20VC Fund, a $8.3M vehicle to invest in U.S. startups across different stages alongside top-tier VC funds. The fund had 64 LPs, implying an average check size of ~$130,000. His backers came from all nodes of the ecosystem he had built: from Josh Kushner to Chamath Palihapitiya, from David Sacks to Beezer Clarkson, from executives at Calm and Airtable to investors at Coatue and Atomic.
Barely a year went by until the next fund was announced.
Stebbings closed on $140M across two vehicles to invest in (a) early stage startups and (b) Series B onwards.
A material proportion of capital came from MIT’s endowment and RIT Capital Partners, two institutional investors.
MIT's endowment is run by Seth Alexander, an investor that learned from the late legendary David Swensen. We wrote about Swensen’s influence on endowment investing earlier this year.
MIT’s funds total $24.6B AUM, good for sixth place domestically among college endowments. The most interesting aspect of their operation, however, is their emerging manager program where MIT allocates capital to first and second time fund managers in search of the next elite investment firm. Similar to how early stage investors play in the pre-seed market to find the next elite founder, institutional LPs who back first time fund managers often evaluate investors based on their expertise and qualitative factors, since track records are sparse at this stage.
In the spirit of transparency, I initially assumed RIT Capital Partners was an endowment. Rochester Institute of Technology perhaps
RIT Capital Partners is actually the Rothschild Investment Trust, founded by Jacob Rothschild in 1961. Its original purpose was to house investments and financial interests outside of the bank (Rothschild & Co.) for the family.
i don’t ramble, i weave
In the meantime, Jacob Rothschild worked at the family bank for 17 years before leaving in 1980 after a dispute took place. Jacob’s dad, a scientist by training, lost control of majority voting shares to Jacob’s cousin, Sir Evelyn de Rothschild. Jacob abandoned his post at the bank and took control of RIT Capital Partners, executing several strategic deals during his reign. In 2012, he led a deal for RIT to buy 37% of Rockefeller Financial Services.
→ Fun Fact: Sir Evelyn de Rothschild was the personal financial advisor to Queen Elizabeth II
Today, RIT has ~$5B AUM and is listed on the London Stock Exchange FTSE 250.
They allocate capital to public equities, private credit, and twenty something year old podcasters with a track record.
Stebbings’ most recent raise saw the two institutional backers (MIT + RIT) return, as well as 40 founders from Datadog, Atlassian, Eventbrite, Spotify, Capital One, and more.
The fund closed after four months of raising in a historically tough market. Harry’s strategy was to meet two new LPs each week, and then ask them for 3 more referrals. Safe to say it worked out
the future of funding
The majority of solo GPs start out as micro GPs, raising anywhere from $1 - $10M for a proof of concept fund. 2020 - 2021 was a period of high growth in the number of solo VCs - and VCs in general.
The minority of solo GPs that can afford to raise a standard venture fund on the first go are investors that have built long track records at known VC firms. These GPs represent less risk from an LP’s perspective.
EX: Rex Salisbury left a16z to found Cambrian and raised $20M in Fund I
Focusing on the nontraditional route - micro GPs without professional VC experience - the future of funding will see more and more early stage investors come from new media platforms. New media = newsletters, Twitter, podcasts, etc.
A couple of thoughts here:
Good content opens the door to dealflow. New media personalities are able to use relevant content to appear more visible to brilliant founders, winning access to rounds as a smaller check. Writing, speaking, etc. also forces said investors to become better at articulating ideas and arguments, making them better investors in the process
Network effects. Fundraising is a nearly impossible process without a sufficiently deep network. A Twitter account on seed investing in AI with 10,000 followers is an incredible advantage for a solo GP trying to find LPs for a $5M fund. A podcast on consumer businesses with thousands of listeners is an incredible advantage for an angel investor looking to add the leverage of outside capital to previously personal deals.
Convergence. Although we’re discussing solo GPs without formal venture experience, even new managers from incumbent funds benefit from an audience. Rex Salisbury actually started a16z’s newsletter while working as a FinTech investor there. He simultaneously grew his own newsletter to 15,000 readers in four years before realizing it made sense to layer a venture fund on top of the community. Read more about how Rex started Cambrian here
The future is bright as ever 🔥
last week’s poll on freelancing
Quotes from Readers
“Impact of AI agents and related resources on proliferation of nimble agencies”
“Big opportunity ahead”
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