Eyeglass company Warby Parker co-founder Andy Hunt and Jeremiah Daly are trying to raise $125 million for a new venture capital firm called Elephant Partners, which would aim at monetizing startups willing to leapfrog Series A investments.
The duo, who were earlier partners at VC firm Highland Capital Partners, have set an enormous goal, which if achieved would be more than triple the $40 million median amount raised by first-time U.S. venture funds last year. It would also be more than the median total amount of $103 million raised by all U.S. firms last year, The Wall Street Journal reported.
With Elephant Partners, the two 30-something investors are trying to explore the uncharted terrain of taking business away from series A investors by funding startups in their early growth phase, often known as the “Valley of Death,” that is the stage between seed investments and late-stage investment rounds, which fan rapid growth.
An Elephant Partners’ presentation reviewed by WSJ showed charts that explained how the company’s investment in nascent startups could help them skip Series A investors like Andreessen Horowitz and Benchmark.
Elephant Partners, which is planning to invest in 12 to 15 companies, is looking to invest in companies that already have an annual run rate of $4 million and plans to charge a 2.5 percent management fee and a 20 percent carried interest, unless the investment gives a 4x return, which would calculate to a 25 percent carried interest charge, according to WSJ.
Daly and Hunt were promoted to partners at Highland, and Warby Parker was valued at $1.2 billion by its investors early this year.
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