We continue to see more pre-seed funds, which is great for ideas that need a boost to fruition. Today, pre-seed startups have another new source of capital — but there’s a catch. Suzanne Fletcher has to have invested in you before.
“I started Zelda Ventures at the end of last year with a pretty basic thesis — invest in the next companies of founders I backed before,” Fletcher, general partner at Zelda Ventures, told TechCrunch. “When I was investing on behalf of Stanford University, essentially into their alum companies, I estimated about 10% of them were going to start a new company in a given year.”
During her two-decade career as an investor, she was the Stanford StartX fund manager and general partner at Prime Movers Lab. Fletcher has made over 350 investments, most notably in Sourcegraph, Hive, Alation, Turing, Dexterity and Orca Bio. Thirty of those portfolio companies exited, including Nearpod, Osmo and Sweep.
Named after the iconic video game character that hunts for treasure, Bay Area-based Zelda makes its debut with $33 million of capital commitments.
Fletcher aims to be the first check into those new ideas. She watched angel money, which would have been that initial capital, leave the startup ecosystem over the past few years. At the same time, bigger funds that were investing in the early stages pulled back as well to refocus on larger investments.
“That creates a wonderful opportunity for smaller pre-seed funds to play a very pivotal role,” Fletcher said.
As a generalist fund in pre-seed companies, Zelda is looking for passion and commitment on the part of founders. Fletcher’s list includes founders with the ability to put together a dynamic team and execute on their ideas. She also wants to know why a founder is doing this next company.
“The idea has to be really focused around how large the market is,” she said. “That’s a generalist approach, but with a very specific lens, and one where I think when you overlay how you’re looking at serial entrepreneurs, all of whose prior companies you invested in, it really favors that prior knowledge of why. I want someone for the long haul and who wants to create a generationally changing, impactful and large business.”
It took a year of fundraising for the new fund. During that time, Fletcher said she went to 446 meetings with limited partners and ended up with 80 who signed on, including Randy Eisenman, co-founder and managing partner of Satori Capital.
Meanwhile, Fletcher invested in 10 companies from the new fund so far, including Andromeda Surgical, Pointable and Redcoat AI. She plans to invest in 40 companies in total.
“What I build is a boutique, early-stage and experienced entrepreneur product,” Fletcher said. “I’m very clear on what it is. I’m there to help you for the first 18 months to get you to Series A.”