Solo GP fund Better Capital closes $15.8M maiden fund

Silicon Valley entrepreneur Vaibhav Domkundwar-operated venture capital firm Better Capital has announced the final close of its debut fund of $15.8 million.

Better Capital Ventures I fund will be utilised to ramp up pre-seed and seed investments in Indian companies across sectors with a median cheque size of $300,000, with flexibility to write cheques up to $1 million. The fund will be deployed over a period of 18-24 months across nearly 40 companies.

The Limited Partners (LPs) in the fund include executives, investors, and founders from Meta (formerly known as Facebook), Google, Uber, LinkedIn, Tiger Global, TPG, and other venture and hedge funds. 

Better Capital as has taken early bets in multiple sectors since 2018, including neobanks, fintech infra, product-led edtech companies, Small and Medium Enterprises (SME) digitisation, and learning communities.

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Under the Special Purpose Vehicle, structure, the fund has deployed close to $30 million over the last three years across companies such as Open, Teachmint, Slice, Jupiter, Rupeek, and KhataBook, Vaibhav told YourStory. The new fund will also be investing in existing portfolio companies on pro-rata basis, while the fund's LPs remain open to writing top-up cheques for follow-on rounds, said Vaibhav.

The maiden fund will evaluate startups in the space of crypto, creator economy, and climate for investment, in addition to the existing sectors.

“We have been fortunate to partner with several disruptive companies and have created a playbook to collaboratively co-build with founders from the idea stage and bring the right set of resources including access to top tier operators and global funds,” said Vaibhav Domkundwar in a statement.

Rise of Super Angels and Solo GP Funds in India

Better Capital will not move to add new General Partners (GP) immediately. "We have stayed a solo GP fund by design and it has worked to our advantage," said Vaibhav. He added that the fund had a long-term view of holding its shares in the company with a minimum of five years, in alignment with the investors in the fund.

Vaibhav said the fund was oversubscribed as he started with a lower limit of $10 million and had to put a hard stop at the current corpus.

AngelList India CEO Utsav Somani-run iSeed is another Indian solo GP fund, which raised $15 million for its second fund in April 2021. 

The last decade had seen the rise of ‘super angels’ in the Indian startup ecosystem, which includes angel investors who have managed to raise small venture capital funds which invest anywhere between $250,000 to $500,000. 

Mature markets have also seen a rise in solo GP-run venture capital funds, started typically by founders or investors who are brands in their own right. The solo GP funds benefit from faster decision making. These investors typically bet on seed to Series A rounds.

In the US, Josh Buckley, CEO of Product Hunt, had raised $50 million for his first fund followed by a $200 million second fund. Other solo GPs include early Stripe employee Lachy Groom and former Twitter executive and co-founder of Color Genomics, Elad Gil.