Cleo Capital, a venture capital firm founded in 2018 by Sarah kunst, is raising up to $ 20 million for its second fund, according to a source familiar with the matter. A recent SEC filing shows that Cleo Capital has already raised $ 6.7 million from this goal, bringing total assets under management to around $ 10 million. Kunst was unable to comment on its fundraising efforts.
This new AUM number is close to what Cleo Capital had originally planned to do. When Kunst first launched her business, she targeted a $ 10 million close. She ended up closing $ 3.14 million from that goal, and now she’s back to double.
Fund II’s $ 20 million target, if closed, would allow Cleo Capital, which invests primarily in pre-seed companies, to begin leading rounds. The firm has written checks for $ 1 million in the past and is aiming for an estimated 15-20% stake in its towers.
“One of the reasons we’re a pre-seed fund is because in seed money, especially late seed, everyone from family offices to TikTok stars to rolling funds , is competing for hot tours, ”she said. “Nobody competes in pre-seed.”
There are companies like Precursor and Hustle Fund that support pre-seed companies and cut checks around $ 100,000 and $ 25,000 to start with, respectively. Kunst sees the possibility of writing a million dollar pre-seed check as a “huge benefit.” Usually, newbie founders without family money or deep networks have to spend a lot of time raising their first round. That’s a lot of time to spend on fundraising, not building a business. If a business can cut a big pre-seed check, it thinks Cleo is “buying out six months of a business’s lead,” she says.
Like many companies, Cleo Capital has turned to creative measures to diversify the flow of transactions in the age of Zoom investments and pandemic business. For example, Cleo Capital launched a scholarship program for workers made redundant during COVID-19 to promote entrepreneurship.
Matt Pauker, a recurring founder who sold companies to Coinbase and HP Enterprise, was one of the advisors on this program. Pauker joined Cleo Capital as a general partner presumably to align with the Fund II schedule.
While the company doesn’t focus on racial or gender-based investments, around 92% of its current investments are in companies started by under-represented founders.
The company’s portfolio includes Planet FWD, mmhmm, Lunch Club and StyleSeat. As for new opportunities, Kunst says Cleo Capital looks at anything that helps the individual transform into a collective. As the economy of creators and solo entrepreneurs grows, people need to understand the future of income, health care and benefits, Kunst explained.
“All of these things are difficult to do as an individual,” she said. The majority of Cleo Capital’s portfolio is based outside of Silicon Valley.
Cleo Capital’s raise comes just over a week after two venture capital firms founded by black venture capitalists announced new funds, Harlem Capital and MaC Venture Capital.