Version One Launches $70M Fund IV & $30M Opportunities Fund II

Version One Closes New Funds for Early-Stage Investment

Early-stage venture capital firm Version One, comprised of partners Boris Wertz and Angela Tran, has successfully secured funding for its fourth fund, alongside a second opportunity fund designed for follow-on investments. Fund IV has amassed $70 million in commitments from Limited Partners (LPs), while Opportunities Fund II totals $30 million. These figures represent an increase from the $45 million raised by Fund III and the approximately $20 million of the initial Opportunity Fund.

A Year of Significant Achievements

The unveiling of these new capital pools follows a particularly prosperous year for the Vancouver and San Francisco-based firm. 2021 marked Version One’s first major exit through Coinbase’s initial public offering (IPO). Furthermore, several portfolio companies experienced substantial valuation increases, including Ada (reaching a $1.2 billion valuation in May), Dapper Labs (valued at $7.5 billion amidst the NFT boom), and Jobber (which secured a $60 million funding round in January, with valuation undisclosed).

Insights from Wertz and Tran

Discussions with both Wertz and Tran revealed insights into their success, the firm’s investment philosophy, and future strategies for Fund IV.

Focus on Mission-Driven Founders

“Our core focus centers on identifying mission-driven founders,” explained Wertz. “We aren’t solely focused on SaaS, marketplaces, or cryptocurrency. We prioritize investing at the pre-seed and seed stages, valuing individuals over established traction. We actively seek to be contrarian, both in the sectors we explore and the entrepreneurs we support, readily backing first-time founders often overlooked by others.”

Building Lasting Relationships

Founders who have received backing from Version One consistently highlight the strong connection they feel with the firm and its partners. Tran emphasized the importance of supporting entrepreneurs throughout their entire journey, through both successes and challenges.

“We continually learn by observing the evolution of these companies,” she stated. “Witnessing their growth is incredibly rewarding, and we remain committed to assisting them, even as our influence on their core business may diminish.”

Anticipating Market Trends

Wertz highlighted Version One’s ability to identify emerging investment opportunities before they gain widespread attention.

“We entered the cryptocurrency space in 2016, when it was largely dismissed by many,” he noted. “Similarly, we began investing heavily in climate technology last year, before it became a mainstream focus. This conviction, coupled with our willingness to back unconventional entrepreneurs, is key to our returns.”

The Potential of Climate Tech

Given climate tech’s recent emergence as a key investment area for Version One, I inquired about their rationale and whether it represented another potential bubble, similar to the clean tech boom of the early 2000s.

“Firstly, we are genuinely passionate about addressing this issue,” Wertz responded. “Secondly, there’s an undeniable urgency for technological solutions to tackle what is arguably humanity’s greatest challenge. Thirdly, the previous clean tech wave laid crucial infrastructure, significantly reducing the cost of technologies like electric vehicles, batteries, and renewable energy sources. This creates a foundation for developing more sophisticated applications.”

Tran added that Version One’s investment in climate tech occurred at a pivotal moment – during the peak of the pandemic, when attention was largely diverted to healthcare concerns.

The Role of the Opportunity Fund

I also questioned Tran about the purpose of the new Opportunity Fund and its alignment with the firm’s early-stage focus.

“It requires minimal adjustments to our operational approach, as we aren’t making any new initial investments,” Tran clarified. “We aren’t growth investors focused on Series A or B rounds. Our goal is simply to increase our stake in companies we believe in. Our close relationships provide us with unique insights, creating a form of information arbitrage.”

This approach benefits LPs by allowing them to increase their investment in successful companies without the complexities of establishing new relationships or creating special purpose vehicles (SPVs).

Expanding International Reach

Looking ahead, Wertz indicated that Fund IV will likely involve increased international investment, facilitated by the growing globalization of the tech industry and the rise of remote work.

“The pandemic has significantly broadened our pipeline, opening up opportunities for investment beyond traditional geographic boundaries,” he explained.

“We’ve gained valuable insights over the past year and a half,” Tran added. “Our distributed structure has always been an advantage, and the shift to remote work has only amplified that benefit. We’re eager to discover our next competitive edge.”