It’s a hard time to be building in public. Which means that it’s a hard time to tell your story as an entrepreneur. Which means that for a new venture firm like VSC, which offers public relations support and storytelling advice in exchange for equity in startups, a volatile startup environment presents an opportunity for disruption.
VSC Ventures launched in October 2021, at the height of the startup boom, with a $7 million investment vehicle to back startups. The public relations firm’s venture debut came after it helped more than 600 venture-backed startups through 53 exits, 20 unicorns and four IPOs; and now, it’s back with more money as it hoped.
The firm tells TechCrunch that it has closed the remainder of its debut fund, adding $14 million more to its balance sheet. The firm’s total debut fund is now $21 million, about $1 million more than its original goal according to SEC filings. VSC Ventures is led by VSC CEO Vijay Chattha and General Partner Jay Kapoor, with partners including Anne Sophie Hurst, Eric Gonzalez, Maggie Philbin, Gwyn Stahlhut, Archie Chattha and Marta Bulaich.
As with its prior tranche, VSC Ventures says it will invest the money in startups working on solutions that help the future of work, future of wellness and future of climate. So far it has invested in 11 companies. The current portfolio includes Neuralight, a platform that uses artificial intelligence to improve drug development; The.com, a web development play; and Propel, a software tool for public relations teams to better understand impact and find influential people to tell stories.
While the firm may have debuted in a wildly different landscape, Chattha says that the team is sticking to a similar investment strategy: VSC doesn’t aim to be the biggest check in or lead check in, both so it can build an honest relationship with founders and have aligned incentives so it doesn’t guide them into what’s wrong for the business, it says.
“You don’t see a lot of VCs [who] come from that perspective of having worked with companies understanding the diligence checklist, the founder market fit, but then have the level of depth of expertise on storytelling on narrative building on helping generate awareness,” said Kapoor. “It’s not a world traditional VCs have come from obviously, with rare exceptions.” There are a few examples of who fit this mold: Harry Stebbings, the well-known podcaster behind “20 minute VC,” recently raised $140 million for his venture capital fund launched off of his show’s success; Josh Constine, a former editor-at-large for TechCrunch, is a partner at Signalfire; Danny Crichton is head of editorial at Lux; and of course Alexia Bonatsos, former co-editor in chief of TechCrunch, began venture firm Dream Machine.
VSC didn’t disclose all the investors in its latest fund but did mention involvement from Poshmark, Discord, Coinbase, Tinder, Krux, Osmo, Group Nine, JioSaavn, Liftoff, Lyft, as well as GPs at early-stage funds. “The majority of our LPS were former founders and clients of VSC over the last five years … basically, like, if we helped them make a lot of money, they generally came in as LP.”
The duo is hoping that the current reality check happening across startups causes founders to optimize for strong, present investors instead of party rounds. “Party rounds became really popular, the problem with those party rounds was when it came time for somebody to step up and really support the company, they weren’t there,” Kapoor said.
He adds, “It’s finding, at least for a founder, a lead investor that continues to be a challenge and finding a good qualified lead who is really going to be aligned with you for the long haul. Those are the folks that we like to come invest with. And those are the folks that I think founders really should optimize for as their leads on cap table.” Chattha, meanwhile, says that founders should prioritize a team of employees, investors, angels and advisers that has already operated amid a downturn.
“It’s a nice time to have gray hairs,” he added.