Yesterday I was reading about a new $100 million venture fund in Boston called Pillar in an article titled With Pillar and Other Newcomers, Boston’s Venture Scene Shifting. The pitch: an experienced VC is building a new, modern fund that’s much more entrepreneur friendly.
Here are a few of the new ideas in the fund:
- Only buys common stock in startups so that they’re always aligned with entrepreneurs (no preferences, no anti-dilution, etc.).
- Cash out opportunity for the founders to sell some of their equity (up to $1M) after three years and certain milestones so that they don’t feel pressure to sell the entire company too soon.
- Limited partners that are local entrepreneurs with a range of expertise and are willing to help the investments
The big idea is that venture funds make their money on the investments that go well, not by getting some of their money back from ones that go poorly. Thus, be as desirable as possible to the entrepreneurs so that the fund gets the best investment opportunities.
I’m looking forward to seeing how it plays out and if the model works.
What else? What are some more thoughts on Boston’s new Pillar fund?