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Joshua Posamentier and Abe Yokell have spend the last seven years on the LP racing circuit , inexhaustibly pitch L-P on the fiscal and ESG ( environmental , social , and governance ) welfare of investing in clime technical school .
“ We ’ve had C — I do n’t even want to fess to how many — but 100 of conversation over the year , ” Yokell , a managing partner atCongruent Ventures , told TechCrunch+ . Some of those conversations ended with the special partner investing in one of Congruent ’s funds , but for the most part , they did n’t . “ We ’re used to getting reject . That ’s part of our life . ”
Well , the shoe is on the other substructure now . When raising Congruent ’s third monetary fund , the hard part was n’t finding circumscribed partners but figuring out who to plough down . The firm had originally hop to raise $ 200 million , a minor gradation up from its second $ 175 million investment firm . Investors call up that was far too modest , and alternatively offered $ 600 million , a threefold oversubscription .
Congruent turn down $ 325 million of that , ultimately raise $ 275 million . ( TechCrunch+first report on the fund in November . ) “ This is really the first clock time we have seen this complete abundance of interest , ” Yokell said .
The determination was n’t easy , but the team feel that they did n’t need to blow up too quickly .
“ store size of it is your strategy , ” Yokell said . “ The right thing is n’t to do more deal when you bloat the fund size ; it ’s to do bigger deals . And you ca n’t do bigger batch at seeded player that make sense , in our thought , from a proceeds linear perspective . ”
“ There ’s a natural list that ’s like , ‘ Oh , we can raise more money . We should raise more money , ’ ” said Posamentier , who is also a manage partner at Congruent . “ The job is , if you require to publish a $ 500,000 halt for a pre - ejaculate startup that has nothing , is a $ 500 million or $ 1 billion monetary fund proceed to do that and then locomote to pay any attending to it at all ? We want to keep it minuscule . ”
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For Posamentier , it ’s more about actually being useful to the companies the strong invests in .
“ We like affecting the upshot of our companies , ” Posamentier said , “ which sounds a little leery , like , ‘ We ’re here to help you ’ or ‘ We ’re adding value , ’ — just blame your cliché . The by and by the stage you get to , the more build out these teams are , the less aid they need , the less you matter . Then you ’re just another check . ”
Neither Posamentier nor Yokell see the house changing its strategy or approach to early - stage investment . Congruent will be look for out companies in the same verticals it has invest in before , with the same business models , and firms that are focus on North America . “ Anything that has a positive mood impact is just plot , ” Yokell read .
“ We ’ve been on roughly the same eight - to - ten - Modern - company - per - twelvemonth cadence since we pop , ” Posamentier pronounce . “ That ’s a trivial bit of a coincidence . It ’s a piffling moment of ‘ This is what the squad is design to do . ’ ”
He believe the house ’s size of it and service it can offer give them an “ boundary in the grocery store ” where they can get better pricing and better access to deals .
Congruent ’s LPs seem to jibe . The new fund admit some return investor , include the California State Teachers ’ Retirement System , the Grantham Foundation , the University of California , Sobrato Capital , Strategic Investment Group , and client advise by Cambridge Associates . The lean also append some new names , including Northwestern University and Vintage Investment Partners , as well as other foundation represent other talent , pensions , foot and sovereign wealthiness investment company .
“ One of our innovation purpose was to endeavor to play institutional capital back into climate , ” Yokell said . The fruit of that labor appear to be give off .
Congruent ’s experience fundraising this year runs counter to extensive industry drift . Venture capital firm are on track to recruit just $ 57 billion this year , according toPitchBook - NVCA Venture Monitor . That would make 2023 the first year since 2017 that the full space has raised less than $ 70 billion .
sooner this year , Congruent announce that it hadclosed a freestanding $ 300 million fundthat would concenter on Series B and C companies mostly already within the business firm ’s portfolio . Together with this newfangled fund , the house has heighten over $ 550 million this twelvemonth alone , nearly double all of its previous funds combined .
Why the sudden surge in interest ? There are a few drivers , Yokell speculate .
For one , there are comparatively few investing coach with path phonograph recording in climate technical school , go away LPs interested in the sphere with only a fistful of option . secondly , as of April , the firm had close three funds , which imply that Congruent is “ issue from director jail ” — the house can now provide LPs with enough evidence that they ’ll be honorable steward of the money .
Lastly , Yokell and Posamentier have been leading Congruent for the good part of a decade , and neither have shown any interest in splitting up or radically changing the direction of the firm .
Despite headwind due to rising sake rate and a generally bearish speculation cap market , both partner stay bullish on clime technical school . Recent insurance changes , like the Inflation Reduction Act and Europe ’s Green Deal , have certainly given startups in the infinite a boost , but what the two partners are keeping their eye on is the pile of cash institutional investors require to invest in climate .
“ Those floodgate have n’t really , really opened , ” Posamentier said .
take down : The story has been update to reflect the fact that Congruent enkindle $ 275 million , not $ 250 million as initially filed with the SEC .
