How We Secure Follow-On Investments In High-Growth Seed Startups

Our network-powered approach helps us secure multiple allocations in rapidly scaling companies

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Venture capital is a high-risk, high-reward asset class, which is especially true of pre-seed and seed investments. While failure rates are higher, valuations are lower, creating a greater opportunity for outsized returns. Our network-powered investing model allows us to access high-momentum seed opportunities and secure follow-on investments as companies continue to scale. See below for examples of seed startups from our portfolio who invited us to participate in additional financing rounds.¹

What They Do: BlockFi provides diversified financial services for cryptoasset investors. 

How We’re Involved: Purple Arch Ventures (for the Northwestern community) sourced AV’s initial investment in BlockFi’s $1.5 million seed round raised at a $3.5 million pre-money valuation. As the company scaled its business significantly, the Purple Arch team leveraged their relationship with BlockFi to secure multiple follow-on investments. AV most recently participated in a $500 million Series E raised in June 2021 at a $4.8 billion valuation.

Invested Funds: Blockchain Fund, Castor Ventures, Congress Avenue Ventures, Nassau Street Ventures, Purple Arch Ventures, Syndication, Total Access Fund

What They Do: Burrow is a D2C home furnishings brand specializing in custom, modular couches.

How We’re Involved: Chestnut Street Ventures (for the Penn community) sourced AV’s initial investment in Burrow’s $4.3 million seed round raised at a $12 million valuation cap. The Chestnut Street team secured an initial investment and follow-ons through a personal relationship with Co-Founders Stephen Kuhl and Kabeer Chopra, who launched Burrow while they were MBA students at Wharton. AV most recently participated in a $25 million Series C raised at a $150 million pre-money valuation.

Invested Funds: Blue Ivy Ventures, Chestnut Street Ventures, Syndication, Total Access Fund

What They Do: MainStreet helps small businesses and startups apply for government stimulus funds, hiring incentives, and tax credits.

How We’re Involved: AV’s Seed Fund sourced our initial investment in MainStreet’s $2.3 million seed round raised at a $10 million valuation cap. MainStreet grew quickly, and less than a year later, the company announced a $60 million Series A raised at a $350 million pre-money valuation. Our Seed Fund team was able to secure an allocation for AV alongside other established investors, including SignalFire (Stripe, Venmo) and Gradient Ventures (Google’s AI-focused venture fund).

Invested Funds: Blue Ivy Ventures, Seed Fund, Syndication, Total Access Fund

MainStreet: Fintech SaaS Company with Significant Growth

MainStreet offers a fintech software platform that helps small businesses and startups discover, apply for, and receive government money. Matt Scott, a Managing Partner at AV’s Seed Fund, explains why we identified the company as a high-potential seed opportunity.

See video policy below.

What They Do: SonderMind is a behavioral health network for consumers, practitioners, and partners.

How We’re Involved: Purple Arch sourced AV’s initial investment in SonderMind’s $2.5 million seed round raised at an $5.5 million pre-money valuation. SonderMind was a natural fit for Purple Arch’s portfolio, as CEO and Co-Founder Mark Frank earned multiple graduate degrees from Northwestern. AV most recently participated in a $150 million Series C raised at a more than $1.1 billion valuation.

Invested Funds: Castor Ventures, Congress Avenue Ventures, Purple Arch Ventures, Syndication, Total Access Fund

What They Do: Tilled provides payment facilitation services for marketplaces, SaaS companies, and integrated software vendors.

How We’re Involved: AV’s Seed Fund sourced our initial investment in Tilled’s $2.2 million seed round raised at a $4.6 million pre-money valuation. Tilled grew quickly, and less than a year later, the company announced an $11 million Series A raised at a $70 million pre-money valuation. Our Seed Fund team was able to secure an allocation for AV alongside established investors focused on early-stage companies. AV has previously co-invested with some of these firms, including Abstract Ventures (Flickplay, Lunchclub), Canvas Ventures (Offerfit), and Clocktower Technology Group (Divibank, Glean Analytics).

Invested Funds: Seed Fund, Total Access Fund

What They Do: Wasabi provides cloud storage that is compatible with Amazon’s S3 API at a fraction of the coast.

How We’re Involved: Blue Ivy Ventures (for the Yale community) has secured multiple investments in Wasabi since the company’s $2 million seed round, leveraging a long-standing relationship with Co-Founder and CEO Dave Friend (a Yale alum). He previously launched six companies and has significant operational experience and domain expertise. AV most recently participated in a $112 million Series C raised at a $700 million valuation — roughly 3X the valuation of the company’s $30 million equity round raised the previous year. 

Invested Funds: Blue Ivy Ventures, Purple Arch Ventures, Syndication, Total Access Fund, Triphammer Ventures

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¹While a change in paper gains can be a proxy for things to come, the actual return won’t be known until the company has an exit event. Moreover, these paper returns are unusually large, and many companies won’t make it. Having a large diversified fund can help mitigate risks and provide more opportunities for success. To see the performance of each exited investment for all Alumni Ventures funds over the last twelve months and our historical performance since 2014, click here.

Contact [email protected] for additional information. To see additional risk factors and investment considerations, visit av-funds.com/disclosures.