137 Ventures walks and talks like your run-of-the-mill venture capital fund, but a quick look under the hood exposes a different style of investing.
The San Francisco-based growth-stage firm, which is today announcing its fourth fund with $210 million in committed capital, provides liquidity to founders and early employees of “sustainable, fast-growing, private companies.” In essence, 137 Ventures buys shares directly from employees at unicorn tech companies, like Palantir, Flexport and Airbnb.
Founded by Kathy Chan, a former Khosla Ventures operating partner; Justin Fishner-Wolfson and S. Alexander Jacobson, a pair of former investors at Peter Thiel’s Founders Fund, 137 Ventures also owns a significant stake in Elon Musk’s SpaceX.
Fishner-Wolfson tells TechCrunch he decided to pursue raising his own fund in 2011 after observing the extending startup timeline. Companies were going public later and later, and employees were crying out for opportunities to liquify their stock. He was unsure the experiment would succeed; fast-forward eight years and his limited partners are satisfied enough to increase their bets. 137 Ventures’ third fund closed on $200 million in 2016. The latest vehicle is the firm’s largest yet.
“We are riding a trend that sees high-growth technology companies stay private longer and longer,” Fishner-Wolfson said in a statement. “As such, founders are looking for innovative ways to realize liquidity that offer more benefits than traditional secondary sales. We help early employees get the liquidity they need to buy a home or pay for their kid’s college tuition while retaining more equity upside, keeping their voting rights, deferring tax payments, and abiding by all their company compliance and transfer restrictions.”
137 Ventures invests between $10 million to $20 million in five to 10 businesses per year, typically at the post-Series C stage.
In addition to today’s funding news, 137 Ventures has hired Ching Wu from Canvas Ventures as an operating partner and head of investor relations, and promoted Andrew Hansen to operating partner, chief operating officer and chief financial officer. Hansen is also a Founders Fund alum.