With its strategic LP base and value-add strategy, Avid Ventures brings a lot to the table for a target company. But it’s what the New York-based venture firm does before investing that stands out.
The firm debuted in February with $68 million in commitments to invest across early-stage consumer internet, fintech and software companies.
Founder and managing partner Addie Lerner decided to launch Avid after noticing the need for a disproportionately founder-friendly thesis at the early stages. She says one of the key differentiators of the firm’s strategy is that it aims to help start-ups before investing in them.
Avid aims to meet and work with companies at the seed stage to earn the right to invest at the Series A rounds. The firm then looks to put to work between $500,000 and $1 million either alongside a top-tier investor or through an extended round.
“We can act as an extension of their deal team and really help the founder optimize the round,” Lerner says. “We then try to be disproportionately helpful with our check size. We frequently spend more time with the founders than the lead investor.”
From there, the firm plans to continue working closely with these companies and participate in the follow-on Series B round, with checks ranging from $5 million to $8 million.
Family office LPs
Lerner says the firm’s LP base is anchored by two major family offices, Schusterman Family Investments and George Kaiser Family Foundations, in addition to a diverse base of 50 strategic investors, which includes Brynn Putnam, the founder of Mirror, and Theresia Gouw, founding partner of Acrew Capital.
She adds that many of their individual backers invest alongside the firm at the Series A round as angel investors and the larger more institutional investors are eager to enter alongside the firm at the Series B stage.
“We believe in having a long-term relationship with our founders and we feel the same way with LPs,” Lerner says. “It creates a lot of alignment. We really try to recreate the right alignment and interest among various stakeholders.”
Lerner adds that another layer of Avid’s strategy is that it looks to serve as an extension of the founding team by acting as an outsourced CFO. It can help with anything from growth modeling to unit economics analysis and other business development finance work before and after investing.
“Because we do that before investing, founders see that we are putting our money where our mouth is,” Lerner says.
The firm has already made five investments. It participated in the $40 million Series B round in fraud detection company Alloy.
The start-up also grabbed capital from Eniac Ventures, Canapi Ventures and Felicis Ventures, among others.
Tali Vogelstein, an investor at Avid, says that within the sectors it looks at the firm is particularly interested in vertical fintech software and tools that make entrepreneurship less costly: “Within consumer internet and SaaS, we are very excited about what we call the creator economy – software and tools that empower solopreneurs or businesses of all sizes to start or launch new products without all the headaches of being a small business owner.”
Vogelstein says that within vertical software, Avid will look into such areas as farming and freight.
Lerner adds that due to the depth of involvement in each start-up, the firm looks to make about 20 Series A investments to make sure they can fully execute their thesis.
“We are very excited to be done with the fundraise and back into working with founders, meeting founders and spending time with our portfolio full time,” Lerner says.