Attention entrepreneurs: K9 Ventures, an early-stage VC fund that has backed some of the more exciting startups to hit the world in the last few years, is raising another fund. K9 Ventures II is a $40 million tech fund that will, once again, be dedicated to seed stage investments. The key difference this time around investments will be between $250,000 – $750,000. “This will allow us to potentially lead the seed round,” writes Manu Kumar in a blog post.
The previous, eponymous fund was for early-stage investments in the range of $100,000-$250,000. As with the last fund, Kumar notes that K9 Ventures II will still be “syndicating most investments with other seed and angel investors.” The fund is backed, he says, by ”several high quality institutional limited partners including university endowments, foundations, family offices and fund of funds and key individuals.” None are named specifically.
K9′s last fund was worth $6.25 million and focused on companies in Silicon Valley. It invested in only a small number of companies — between four and six a year — and remained “actively engaged” during the seed stage. The startups that have had funding from K9 include some of the more successful startups out there: CrowdFlower, Twilio, DNAnexus, HighlightCam, CardMunch, Lytro, Zimride, IndexTank, BackType, EasyESI, card.io, Baydin, LucidChart, Torbit, Occipital, TapCanvas, and 3Gear Systems.
Four of the companies that K9 has backed have had exits: CardMunch and IndexTank both went to LinkedIn, BackType was acquired by Twitter, and most recently card.io was acquired by eBay’s PayPal.
Kumar notes that the criteria for the next rush of seed funding will stay the same, and probably is not unlike the criteria that most VCs would list. They are looking for technical founders; those working on new technologies or going after new markets; a source of direct revenue (“No three-way business models and no content, media, advertising-based companies,” he writes.); be capital-appropriate (“Companies whose capital needs over the life of the business make sense given the potential size of the opportunity/exit”); and be hyper-local: the entire team needs to be in the Bay Area. (“No distributed teams, no overseas teams, and definitely no companies that rely on “outsourcing” to build their core technology.”)
Of course there will also be subjective criteria, a “gut call.”
We’ve reached out to Kuma to see if he could give a little more color to what kind of technologies are exciting him right now, and whether there have been any investments made yet out of this fund, and we’ll update as we learn more.