645 Raises $347M Fund IV and Select Fund I: Doubles Down on Seed and Series A Investments
We are excited to announce the closing of two new funds totaling $347M: our $194M Fund IV and $153M Select Fund I. These new funds allow 645 to continue partnering with early-stage founders building iconic businesses that transform industries and shape our future. They also allow us to commit to founders early in their startup journey, by leading investments at Seed and Series A and supporting founders through follow-on investments as their companies scale to the growth stage and beyond.
We’re also excited to welcome our returning LPs and several new institutional LPs as investors in Fund IV and Select I. We are proud that over 90% of this capital is from traditional, institutional LPs including endowments, fund-of-funds, foundations, and consultants.
We’re also pleased to continue to be supported by our Connected Network of LPs, which includes exceptional founders, operators, business leaders, and financiers. Members of our Connected Network have built, run, and invested in multi-billion dollar corporations. They are actively involved with our portfolio companies as advisors, board members, and mentors to help them reach large-scale.
Since 645’s inception in 2014, we’ve been laser-focused on not only being an investor, but we also strive to be a thought partner who supports founders through their company-building journey. While we don’t shy away from encouraging hard decisions and sharing critique, we have empathy and patience as we partner with founders through the always challenging process of scaling from the early stage to the growth stage. We’ve been privileged to back multiple companies that have reached $1B+ valuations, including Iterable, FiscalNote, and Panther Labs, and many companies that have exceeded $100M of annualized revenues, including Goldbelly, Resident, Bespoke Post, Iterable, and FiscalNote. We backed these companies at their earliest stages, partnering closely with their founding teams. And despite the current market downturn, over the last couple months we’ve seen 3 exits: the IPO of FiscalNote, and the acquisitions of Rosie by Instacart, and SpikeTrap by Reddit.
With the close of Fund IV and Select I, we now manage over $550M in AUM across five funds, with more than $400M to deploy over the next few years to exceptional early-stage founders building new infrastructure software, SaaS, and consumer startups that are built on new technology inflections. Just like the scrappy founders who we back at the seed stage, we’ve learned a lot along the way since we began as a small $7.6M fund in 2014. These new funds mark a new phase of growth for 645 as a firm which we’ve detailed below.
Developing a Prepared Mind to Imagine the Future with Bold Founders
We’ve designed these funds to provide the most compelling menu of capital and company building resources for early-stage founders. Fund IV is a continuation of our core investment thesis, and will allow us to both lead and participate in Seed and Series A rounds, with $1-$5M investments at Seed and $5-$10M investments at Series A. With Select Fund I, we will continue to back our highest-performing companies in their growth rounds, with larger investments of $10-$15M in a non-lead capacity.
We invest primarily in enterprise SaaS, infrastructure software/developer tools, and consumer technologies, and we focus on 4 investment themes in those areas. We also target emerging technologies that are impacting these four categories and shaping new ones, specifically Artificial Intelligence and Blockchain/Web3.
We prioritize emerging market and technology opportunities based on a framework called the Venture Investment Triangle, which allows our team to gain an equal amount of conviction in what we know (i.e. being a prepared mind to build with founders) and in what we think we know about the future. We are voracious in our desire to understand more deeply than how it’s presented on the surface and what it means in the context of the future founders' businesses.
While investors in other asset classes focus on “What They Know”, which Warren Buffet defines as the Circle of Competence, venture investors regularly have to journey outside of that area to capture the highest-potential companies. That is because there are many unknown dimensions of startups growth, especially in new technology areas that are changing rapidly where founders are trying bold new things. We diagram both areas in the image below.
At 645, we begin our relationships with founders at the earliest stages, allowing us to collaborate with founders in known to speculative markets, who are building radical to disruptive technologies based on technology inflections. By applying this company building and investing approach at our core, we venture into the early product stage of company discovery and company building processes with our founders. This helps us invest and build in the area of greatest returns for founders and investors, the Venture Investment Triangle.
These are all individuals who were unafraid to imagine a new way of doing things that dramatically improves quality of life and business. We are looking forward to partnering with founders who are looking to build in unknown markets on top of innovative software influenced by new technology waves. These are individuals who are unafraid to imagine a new way of doing things that dramatically improves quality of life and business.
How We Help Founders Build Startup Experiments into Enduring Companies
Our organization is now 15 people strong, segmented into 4 teams: Investment and Research; Founder Success; Engineering; and Finance & Operations. We are founder-first, and we aim to forge strong bonds with our founders, with the goal of operating as an extension of your team.
We’ve designed our firm with the focused mission of providing hands-on value for Seed and Series A founders seeking to build companies that reach a very large scale. We believe that every choice you make as a VC firm entails trade-offs, including fund size, organizational design, and resources available for founders. All of our trade-offs have been focused on optimizing the value we can deliver to early-stage founders.
Like a startup who is laser focused on customer feedback, we’ve built our Founder Success Team with a focused mission of responding to the needs of early-stage founders that we’ve repeatedly heard over the last 8 years. We provided targeted help in the following areas: Recruiting; Go-To-Market Execution; PR; and Fundraising. In recruiting, our Talent Team on a weekly basis delivers over 150 curated candidates to our portfolio companies. With our network of Sales advisors we host multiple GTM workshops with our founders a year and mine our network to assist with product discovery calls. When it comes to PR and Media, our PR team has gotten our Portfolio companies placed in TechCrunch, Crunchbase News, Business Insider, Forbes, Axios and more. In 2021, we helped our companies raise over $1.1B in follow-on capital, and we’ve actively helped our companies in the challenging fundraising market of 2022.
Early-stage founders have been presented with a myriad of funding options over the past few years, ranging from crossover funds to multi-stage funds writing large checks in early-stage rounds. The most savvy founders, however, understand the downsides of accepting capital that isn’t focused at the early-stage. These downsides include poor signaling if a multi-stage firm doesn’t lead your next round, not being prioritized by the lead firm because the check is small in comparison to their growth deals, and raising at too high a valuation, leading to a future down round. The best founders know the value of targeted, focused capital with aligned incentives, which is what we provide to founders. Our fund has been designed to lead early-stage rounds combined with an ability to be a committed investor in our founders’ growth rounds through our Select Fund.
Deep Roots in New York, with Coast-to-Coast Presence to Collaborate with Founders
We founded our firm in New York in 2014, with the belief that New York was becoming the next great technology ecosystem. We have deep roots in the NYC early-stage ecosystem and have been proud contributors to the growth of that ecosystem over the last decade. In addition to being a founding partner at 645, Aaron is also the first Managing Entrepreneurial Officer at Cornell Tech and helped to create the Cornell Tech Studio, nurturing that program from its infancy to the powerhouse of entrepreneurial talent that it is today. In addition to founding 645, Nnamdi has been an investor in New York technology companies for almost 20 years, having been one of the earliest hires at Insight Partners and investing in many successful NYC companies that have contributed to the continued growth and traction of NYC startup talent.
Our belief in New York has been borne out over the past eight years, and we’ve watched the ecosystem grow, persevering through COVID-19 and emerging even stronger. Many of our most successful portfolio companies are located in New York, including Goldbelly, Overtime, Squire, Nanit, Eden Health, and BespokePost. We’re growing our team and presence in New York, with the belief that there will be many more large exit events in the city that spark the creation of new startups.
In 2021, we expanded to the West Coast, launching our office in SF. We did this because the west coast comprised almost 40% of our portfolio, including some of our most successful companies like Iterable, Panther Labs, and Resident. We believe that the Bay Area will remain a dominant technology ecosystem that produces industry-shaping companies. While we will invest in startup companies that are located anywhere, having a dedicated presence in these two major US tech hubs allows 645 to ensure that we are able to plug our founders into the robust resources, domain and company scaling expertise, and acceleration networks of these powerful tech hubs.
We also believe that exceptional companies that reach massive scale can be built anywhere, and we’ve also invested in companies in cities around the country and the world. We love to collaborate with founders wherever they are located.
Come Partner with Us!
We are scaling our team, with open roles across our Investment and Research, Founder Success and Finance & Operations teams. We are hiring in both offices and remotely, with a focus on bringing on A players who can help us scale our firm and better meet the needs of exceptional founders.
We are in a moment in time of major shifts, which is inspiring us to be more optimistic than ever to build with founders. We are in the early days of AI, infrastructure software, and blockchain technology innovations being commercialized together with massive changes in the economy, society, regulation, and the natural environment. At the intersection of these technology innovations and market charges are founders looking to architect the future and we would love to partner with you. We are so grateful for the community we’ve built within 645, our portfolio, our LP base, and the peers we invest alongside.
Happy Holidays,
The 645 Team
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