The US has had solo VC fund managers for many years, but the trend is only starting to catch on in Europe. One of the newest Underline companiesstarted this year Bogdan Iordache in Romania. His career path to become a 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 on 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 GPs.
Hypernovaa $25 million fund that soft-launched in June was founded by an experienced investor Tugce Ergul. She plans to invest not only in other funds, but also directly in startups. Ergul previously worked at Angel Labs, an investor accelerator, which spans 44 countries.
Speaking to londonbusinessblog.com, Ergel said, “There is a new wave of funds coming. We are talking about successful founders who are now starting their own funds to invest in new entrepreneurs. There are partners who are leaving their former funds and starting their own because it is now easier and cheaper than ever to start a fund. And there is 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 $500,000-750,000 for these Solo GPs raising their first fund, and Hypernova will be targeting not only backers, but potential journalists, angel investors, former entrepreneurs, or Associates/Partners coming out of their previous VC fund.
Hypernova provides new GPs with fund management support, required technology, LP introductions, brand support and co-investment opportunities
Ergel added that in the past no LP would give Solo VCs money: “Now there is a new world where you can find LP money if you are only one person and a solo GP. Start-up funds have become cheaper. You can set up a fund for $10,000 and your fund management costs are very low. So it just makes access much easier for these fund managers. So we want to support those fund managers. Then the hybrid game comes into play, 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 the follow-up rounds.”
For its direct investments, Hypernova plans to focus on automation, retail, finance, logistics, transportation and shipping, with tickets ranging from $250,000 to $500,000, and it’s not taking any board seats.
Hypernova claims to be the first female-led solo GP fund in Europe and the first female-led solo GP fund in the US
Since its soft launch in June, Hypernova says it will:
– Invested 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 deep tech fund
– San Francisco-based fund that invests in LP secondaries (Fund II).
– Invested directly in a hydrogen marketplace in San Francisco
– DevOps for carbon removal companies based in Berlin
– Cohort based learning and talent platform, based in London 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 invest with very small amounts.
“I am a solo venture capitalist myself,” Ergel added. And that’s also one of the new things for the markets. I started this because I myself experienced so many difficulties and problems as a solo GP. If I had started this in the US as a purely US-focused US fund, I would have closed it in six months. But because I wanted to do something that bridges the US and Europe, it took much longer.”