The fund took Connors two quarters and “25,000 miles of planes, trains, and automobiles” to raise, Connors wrote in a blog post.
Connors told VCJ in an interview that the micro model reminds him of the venture business 20 or so years ago, when Sequoia Capital and Kleiner Perkins Caufield & Byers were smaller shops with fewer partners and staff.
“I’m kind of going back to the tried and true business model,” he said. “There’s more than one way to be successful” in venture.
PivotNorth expects to make Series A and seed investments with first checks of $100,000 to $3 million and will look to do four to six deals a year. It will have a software focus, both consumer facing and enterprise companies.
The fund already has investments in the search engine Blekko, the political platform Votizen, cloud security vendor CloudPassage and several other startups in stealth.
I’m kind of going back to the tried and true business model. There’s more than one way to be successful in venture.
Tim ConnorsFounderPivotNorth Capital
Connors said he raised the fund from two university endowments, a foundation, three funds-of-funds, two family offices and several entrepreneurs.
“While it could have been much bigger, we set and kept the hard cap of $35M for fund one,” he wrote in his blog. “In the late 80s and early 90s, the typical top-tier VC firm was investing around $35M per GP per fund, with a small number of GPs.”
He added: “Thirty five million dollars of capital per GP was sufficient to fund a portfolio of companies at the early stage with check sizes driven by the needs of the business and the market opportunity… if the VC owned 20% of a winner that generated a $250M exit, the LPs were making money and the GPs were making carried interest.”
That said, Connors told VCJ that PivotNorth’s second fund could be larger than its first, and he may add GPs to invest it. Still, the firm is unlikely to ever have more than three GPs, he said.
Connors previously worked for U.S. Venture Partners and Sequoia Capital. He left USVP last year after about nine years with the firm. At that time, according to the bio on USVP’s website, Connors was focused on business and consumer internet services companies and he was a director of 4info.net, Blekko, Guidewire Software, Media6Degrees.com, M-Factor.com and Right90.com.