Bee Partners closes $30 million fund to seed very early-stage startups

Bee Partners in San Francisco has raised a $30 million fund, its second, to lead investments in very early stage startups based in the U.S.

Founded in 2009, the firm is best-known as the first investor in TubeMogul, now a publicly traded adtech company. Bee was also an early backer of the crowdfunding platform Indiegogo, drone tech startup Skycatch, the second-hand fashion marketplace Tradesy and many others.

According to Bee Partners’ founder and Managing Partner Michael Berolzheimer, with Bee II, the firm intends to keep leading seed and pre-seed stage deals, doing about eight per year, with potential to participate in follow on rounds.

The average check Bee Partners writes these days is around $400,000 and typically the firm looks for 6-8% ownership in the startups it backs. By comparison, many accelerators which support startups at the same early stages invest $25,000 to $250,000 and take 6% to 10% stakes.

Berolzheimer said, “Rather than investing in particular industries, we look for companies with a founder who has a deep market insight from something they personally experienced or discovered through prior work.”

The firm has certainly backed some young guns, but the average age of a founder in Bee Partner’s portfolio is over 35. That is partly driven by Bee Partners’ work with alumni of the University of California at Berkeley and other campuses.

Berolzheimer, together with Bee Partners Principal Garrett Goldberg and Director of Partnerships Cynthia Maxey, manage an alumni- and founders-only community called CalFounders, which facilitates cross-generational networking, hiring, business partnerships and angel or venture deals among UC graduates, mostly, but also students.

CalFounders events have been held in San Francisco and Berkeley, Calif. so but Berolzheimer seeks to expand these to New York and cities overseas in the near future.

Besides fostering alumni connections, CalFounders increases the visibility of all the entrepreneurship and tech efforts around UC campuses in general, an ecosystem that is often overlooked by traditional investors.

VC’s traditionally obsess over the labs and dorm room businesses at Stanford, MIT and Harvard, rather than state schools, when scouting prospective hires or deals.

Bee’s approach seems to have drawn some followers. Earlier this year, a 24-year-old investor named Jeremy Fiance started The House Fund to back startups out of his alma mater, UC Berkeley.

Bee Partners' Michael Berolzheimer (center) with TubeMogul cofounders Brett Willson and John Hughes on July 18, 2104, the date of TubeMogul's IPO.

Bee Partners’ Michael Berolzheimer (center) with TubeMogul cofounders Brett Wilson and John Hughes on July 18, 2104, the date of TubeMogul’s IPO.

A good chunk of the capital in Bee Partners’ second fund comes from UC Berkeley alumni and Cal trustees, Berolzheimer said, declining to disclose a dollar amount. “They share our passion for venture creation,” he said.

Other limited partners in Bee Partners second fund include: family offices, fund of funds and asset managers, a typical mix for an early stage firm on its second fund. Bee Partners has backed 17 companies from its second fund already, which was originally targeting $25 million but closed at $30 million.

Bee II deals have included: StatMuse, an AI-powered search engine for sports data; BuildingConnected, a platform that connects commercial construction builders with subcontractors and simplifies the bidding process for them; and a drone tech company making collision avoidance systems still “in stealth.”


Editor’s note: This post has been updated with information about the range of investment terms and dollar amounts offered by accelerators to early-stage startups.