As we kickoff of our second annual TechCrunch Disrupt conference, we’re clearly not the only ones who think there’s a substantive ecosystem brewing here beneath all the hype and the froth; Lerer Ventures is announcing the closing of its second seed-stage venture fund today. The total is $25 million, mostly from friends, families and small family investment groups.
The fund comes 18 months after Ken Lerer, Huffington Post co-founder, and his son Ben Lerer, Thrillist co-founder, decided to organize all the one-off angel investing they’d been doing around the New York scene into their first formal fund. They raised $8.5 million back then on the hunch that New York needed its own uber-tapped in “Ron Conway of the East.” Nearly two years later with a portfolio that includes GroupMe, Greplin, Hyperpublic, and last year’s Disrupt winner Qwiki, they think they’ve proven it. “There was absolutely a hole in the market,” Ben Lerer says.
Everyone knows that Valley investors have been spending more time and cash in New York in the last few years, but deal flow at those earliest stages is all about local networks. The same way New York investors can’t see every deal a Ron Conway sees; not even our biggest and baddest angels can hear about every New York idea. Nor do they have the all-important advertising and media connections to help juice those young companies revenues or pave the way for partnerships.
There’s another big announcement with the new fund: Eric Hippeau, formerly the CEO of the Huffington Post, is joining the firm full time to run it.
Not surprisingly the firm has a heavy focus on media. But it seeks more broadly to invest in areas where New York excels, like social commerce and ad platforms as well. While many of these companies are more Madison Avenue-friendly, there’s still some real tech underneath them as New York’s startup ecosystem continues to evolved, Hippeau said.
Ben Lerer noted how much has changed since LV1 was launched. A lot more money has piled into the New York scene, but he notes a lot of it is late stage or very momentum oriented– chasing the next Facebook or Twitter only. Lerer Ventures strategy is to chase not only those companies, but the next flips, doubles and triples they find along the way.