High Alpha opens third venture studio: co-founder calls venture market ‘hot and crazy’

Venture studio High Alpha launched its third studio Wednesday, continuing to create, launch and scale enterprise cloud companies.

The Indianapolis firm typically begins a new studio every three years, and is a model of entrepreneurship that combines startup creation with venture funding. Co-founder and managing partner Scott Dorsey told TechCrunch this is coming at a busy time for venture capital.

“The venture market is so hot and crazy right now,” Dorsey said. “Venture firms are having to move earlier to be competitive to get deals they might miss. Given what we do, we are as early as it gets, so I think we are ahead of that curve with the venture studio model. We are also going through all the trials and tribulations of starting companies, so we have that empathy and operator background. Not many firms have that background.”

All of that wild and crazy activity is a positive shift and providing a bigger field for seed investors, he added. There are more firms now that can write big checks, so if High Alpha is able to get companies up-and-running in the first year, the startups will need that next level of capital for the next stage of growth.

High Alpha Studio III raised $18 million from repeat investors Emergence Capital and Foundry Group. It comes seven months after the venture studio announced a $110 million fund. As part of the investment, Foundry Group’s Jaclyn Freeman Hester and Emergence Capital’s Carlotta Siniscalco joined its board of directors.

Dorsey, along with Eric Tobias, Mike Fitzgerald and Kristian Andersen, founded High Alpha in 2015. Since then, it has raised over $260 million and founded and launched more than 30 companies, including Zylo, Lessonly, MetaCX, Mandolin, Casted and Bolster.

The first studio had 11 companies and the second had 17. This new studio is starting out with three, two that are in stealth mode, Dorsey said. Among all of the companies, there have been seven exits so far, most recently Seismic’s acquisition of Lessonly, a training, coaching and enablement company.

Over the years, High Alpha has examined different sectors, from the gig economy to the talent marketplace to technology knowledge. When the way people worked changed in 2020, High Alpha kicked into high gear and started a record number of companies, 10, compared to its typical three per year.

“We saw an opportunity to solve problems for the new way we are living,” Dorsey added. “We are in a brand new world now. Being more funded means we can make more meaningful investments and compete in the market.”