Brian Singerman Raises $500M+ Fund with New VC Model

GPx: A New Venture Fund Targeting Emerging Managers

Brian Singerman, formerly a General Partner at Founders Fund, and Lee Linden, co-founder and managing partner of Quiet Capital, are reportedly aiming to secure over $500 million for their new venture, GPx. Sources familiar with their plans have indicated to TechCrunch that Peter Thiel, a co-founder of Founders Fund, is likely to contribute to this new fund.

GPx’s Dual Investment Approach

GPx is implementing a strategy comprised of two key components. Approximately 20% of the fund’s capital will be allocated to funds led by emerging Venture Capitalists focusing on pre-seed and seed-stage startups. The remaining 80% will be used to co-invest with these emerging managers in later-stage funding rounds, particularly at the Series B level, of their most promising companies.

A Hybrid Fund Model

This approach diverges from the conventional practices of most venture capital firms. Instead of solely investing directly into startups, GPx is incorporating aspects of a fund-of-funds model. This involves investing in a portfolio of other funds, rather than directly in the startups themselves.

While fund-of-funds provide limited partners with access to potentially overlooked or exclusive investment opportunities, they also introduce a dual layer of fees – those levied by the fund-of-funds and those charged by the underlying fund managers.

Navigating a Challenging Landscape

Despite a recent decline in capital raised by fund-of-funds firms – reaching a 16-year low last year, according to PitchBook – Singerman and Linden believe their established reputations, extensive networks, and partially fund-of-funds strategy will attract investment.

The Rise of Independent Venture Capitalists

There's a growing trend of experienced investors leaving larger venture firms to establish their own, more agile and specialized investment practices. These investors often seek greater autonomy and a more focused approach than is possible within a large organization.

Co-Leading Later-Stage Investments

GPx anticipates that a new generation of VC investors will successfully identify and support numerous strong early-stage companies. This will position GPx to participate as a co-leader in subsequent, later-stage investments in the most successful companies within those emerging managers’ portfolios.

Addressing Pro-Rata Rights Challenges

Early-stage VCs frequently seek to maintain their ownership stake through pro-rata rights in later funding rounds (Series A, B, and beyond). However, their fund size often limits their ability to fully exercise these rights when dealing with high-performing companies.

Typically, smaller VCs resort to creating special purpose vehicles (SPVs) to raise additional capital from their limited partners. This process can be lengthy, potentially allowing other investors to secure desirable equity positions.

Empowering Emerging Funds

With GPx’s backing, emerging funds will be empowered to not only exercise their pro-rata rights but also to actively lead later-stage investment rounds.

Previous Reporting and Lack of Comment

The Information had previously reported on the launch of GPx, but did not disclose details regarding the fund’s target size or specific strategic elements.

Neither Singerman nor Linden responded to requests for comment regarding this matter.

Note: This article has been updated to include information regarding Peter Thiel’s involvement with GPx.