Samarth Chandola started his entrepreneurial journey in Canada with a $35,000 cheque from an angel investor to launch his first startup. Eight years later he’s had three exits, primarily within the gaming tech house. Now, he’s able to put money into as many as 25 to 30 new startups over the following 12 months because of a not too long ago closed spherical of $6 million.
Chandola launched his fund, Vancouver-based First Fund, final 12 months, targeted on backing pre-seed stage tech corporations throughout Canada. With a rolling fund mannequin that enables the agency to safe small quantities of capital on an annual foundation, First Fund raised $4 million final 12 months along with the latest $6 million. The most up-to-date tranche closed September 13.
Chandola’s fund could also be small however his ambitions are massive. The investor spoke to BetaKit about his hopes to put money into 100 Canadian startups by 2022 and 1,000 by 2023.
“We’re prepared to take a guess on the jockey, not the horse, and actually be a supply of early, preliminary capital for entrepreneurs.”
To get to 1,000 the agency might want to ramp up its investments and the dimensions of its funds. To date, First Fund has invested in 22 startups, totally deploying the $4 million.
But numbers usually are not the agency’s sole focus. Chandola expressed ardour for serving to early-stage entrepreneurs get their concepts off the bottom and entry their first cheques – therefore the identify First Fund. Chandola’s agency positions itself as an institutional various to the friends-and-family spherical.
“When I first heard the phrase household and mates spherical I used to be fairly stunned,” stated Chandola. “I don’t come from a background the place my household or mates had been wealthy sufficient to place in cash … and, so, the thought is that not all people has entry to that degree of wealth of household and mates, however they’ll nonetheless be wonderful entrepreneurs.”
“We are that supply of capital to interchange the household and mates spherical for most entrepreneurs,” he argued.
First Fund is backed by 32 particular person buyers that Chandola declined to reveal. He did word, nonetheless, that almost all of buyers within the fund are individuals with operational expertise relatively than skilled buyers.
Operational expertise is a notable a part of First Fund’s technique, as Chandola claims all of its five-person crew have expertise launching and constructing startups.
For his half, Chandola has been within the entrepreneurial sport for greater than a decade. He launched his first Canadian firm after immigrating to the nation as a scholar in 2012.
Launched in 2013 with that preliminary angel cheque, V2 Games was a cell sport improvement firm that launched the world’s first licensed Pac-Man cell sport. It was later purchased by publicly traded Victory Square Technologies.
Chandola later went on to create Openspot Technologies and Pepper Esports, the latter bought by TGS Esports Inc.
First Fund’s thesis is sector agnostic and its portfolio contains startups from a spread of verticals. Earlier this 12 months, the agency led a $285,000 pre-seed spherical of funding for Calgary-based Vetsie.
Cheque sizes vary from $100,000 to $400,000 per startup. With its give attention to serving to launch startups, First Fund doesn’t at the moment do follow-on funding, although Chandola famous the chance for the agency to lift a progress fund sooner or later.
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First Fund touts itself as Canada’s most lively pre-seed fund. The declare is notable for a younger agency with a small fund. While the Canadian market for solely pre-seed targeted corporations is small, First Fund comes up towards the likes of Panache Ventures, a pre-seed and seed stage fund that has made a reputation for itself as considered one of Canada’s most lively funds total.
According to CVCA knowledge, Panache made 17 investments within the first half of 2021. The agency additionally not too long ago introduced the launch of a brand new pre-seed fund by means of which it plans to again over 75 corporations throughout Canada with preliminary investments of as much as $1 million.
Chandola expressed plans to proceed to develop his agency’s fund sizes. He expects to lift additional funds annually, protecting with the rolling fund mannequin.
The mannequin is one which has seen curiosity over the previous 12 months after AngelList first launched rolling funds on its platform in early 2020. Rolling funds usually enable fund managers to lift new capital commitments on a quarterly foundation with buyers approaching for a minimal one-year dedication. They have been touted as a means for rising enterprise capitalists to launch funds faster.
When it involves First Fund, Chandola and his crew are targeted on transferring quick to put money into as many startups as attainable.
“Everyone needs to put money into you after you have traction,” stated Chandola, arguing that money is commonly what is required to get that traction.
“That’s the Catch-22 scenario we’ve got right here in Canada,” he stated. “We’re prepared to take a guess on the jockey, not the horse, and actually be a supply of early, preliminary capital for entrepreneurs.”
Image supply Unsplash
Vancouver-based First Fund closes additional $6 million for pre-seed investment fund
