Solo VC fund managers have existed in the US for many years, but this trend is just beginning to take off in Europe. One of the newest is Underline Ventures, founded this year by Bogdan Iordache in Romania. His career path to Solo GP fits the profile: a former entrepreneur, a major player in the Eastern European tech scene, a founder of the How to Web conference and a former VC in a multi-partner team.
Above all, what Europe needs more are these “funds of funds” that specialize in working with this new wave of European solo doctors.
Hypernova, a $25 million fund that launched softly in June, was founded by veteran investor Tugce Ergul. She plans to invest not only in other funds, but also directly in startups. Ergul was formerly at Angel Labs, an investor accelerator that spanned 44 countries.
Speaking to TechCrunch, Ergel said, “There’s a new wave of funds coming. We are talking about successful founders who are now launching their own funds to invest in new entrepreneurs. There are partners who leave their former funds and create their own funds, because now it is easier and cheaper than ever to create a fund. And there is more support for solo capitalists.”
How does it work? Hypernova invests 40% of its fund in solo GP funds and the rest directly in startups, 50% in the US and 50% in Europe.
Ticket sizes for these solo GPs raising their first fund range from $500,000 to $750,000, and Hypernova is not just targeting financiers, but potentially journalists, angel investors, former entrepreneurs, or associates/partners who are dating be spun off from their previous VC fund.
Hypernova provides new GPs with fund management support, technology, LP launches, branding support and co-investment opportunities
Ergel added that historically no LP would have given money to solo VCs: “Now there’s a new world out there where you can find LP money if you’re just one person and a solo GP. Entry fees have become cheaper. You can set up a fund for $10,000 and your fund management costs are really low. So it just makes access a lot easier for those fund managers. So we want to support these fund managers. That’s where the hybrid game comes in, 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 will invest in the winners of these fund managers in subsequent rounds.”
For its direct investments, Hypernova plans to focus on automation, retail, finance, logistics, transportation and shipping, with ticket sizes ranging from $250,000 to $500,000, and it won’t take board seats.
Hypernova claims 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:
– Invests in an early-stage infrastructure fund based in San Francisco
– A London-based fund that manages 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 in San Francisco
– DevOps for CO2 removal company based in Berlin
– London-based cohort-based learning and talent platform called Neol
– a micro-fulfillment platform to optimize the last mile
It now plans to open a London office from January 2023 and hire a London-based partner.
And it’s launching an LP diversity and inclusion program to get new investors into the fund investing game, where they can co-invest 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 had so many difficulties and problems myself as a solo GP. If I had started this in the US as a purely US-focused American fund, I would have closed it in six months. But because I wanted to do something that would connect the US and Europe, it took a lot longer.”