Downtown L.A. venture capital firm Greycroft Partners has closed a $200 million investment fund.
The venture fund is Greycroft’s fourth since its founding in 2006, bringing the firm’s total capital under management to $800 million. Greycroft said it will start making investments out of the new fund in Jan. 2016.
Greycroft focuses on investing in early stage tech companies. Typical investment sizes range from $100,000 to $20 million. Investments from this latest fund will most often be Series A rounds, and a few seed rounds, in the range of $100,000 to $5 million. The company makes about 15 investments per year and has 20 employees split between its dual headquarters in Los Angeles and New York.
Companies in Greycroft’s portfolio that have been sold include Huffington Post, Maker Studios, Trunk Club and Braintree. The company’s active portfolio includes advertising firm Extreme Reach Inc., mobile analytics company AppAnnie, business analytics firm DataScience Inc. and Santa Monica mobile video firm WhipClip.
Greycroft cofounder and managing director Alan Patricof said in a blog post that the venture firm has found success by not having minimum ownership or board seat requirements, and also by investing alongside syndicates and other institutional investors.
“This has been well received by other VCs and angel investors who frequently get cut out of their best seed investments by larger funds,” said Patricof, who’s based in New York.
That strategy has helped Greycroft get invited by other venture firms to invest in new companies, especially in lesser known markets, said Dana Settle, a founding partner at Greycroft who heads the L.A. office.
“We have pretty consciously been investing in markets that are off the grid,” she said. “We have investments in Cincinnati, Pittsburgh, Minneapolis and Seattle.”
Though tempted to raise larger investment funds, Patricof noted that the time required to vet and nurture early stage investments makes it difficult to manage more capital.
“The challenge of our model is that it only works with smaller fund sizes,” he wrote. “Greycroft IV is a $200 million fund, which we feel is the largest fund size that works with this particular strategy at this time.”
